Quick Take
For the second year in a row, Santa Cruz County has been named the country’s most expensive rental market. Further, the gap between the county and the second-most-expensive area, the San Francisco metro area, widened considerably. Housing advocates are not surprised.
Santa Cruz County remains atop the list we don’t want to head.
The Santa Cruz-Watsonville metro area, which is made up solely of Santa Cruz County, was again named the most expensive rental market in the U.S. in the latest edition of “Out of Reach,” an annual report by the National Low Income Housing Coalition. The county moved up to the No. 1 spot last year, overtaking the San Francisco metro area made up of San Francisco, San Mateo and Marin counties, which remained at No. 2.
The report states that the fair market rent of a two-bedroom rental in the county is $4,054, which is significantly higher than last year’s $3,293. Renters would have to earn an average “housing wage” of $77.96 per hour in order to afford that rent.
That housing wage is the hourly wage a full-time worker must earn to afford a standard rental home without spending more than 30% of their income on housing costs. That means in Santa Cruz County, someone making the state minimum wage of $16 would have to work nearly five jobs to meet that amount.
Santa Cruz not only retained its dishonorable ranking over the San Francisco metro area — but saw the gap between the two areas widen. The San Francisco metro area’s housing wage was $64.60 — more than $13 less than Santa Cruz. Last year, Santa Cruz County’s housing wage of $63.33 was only about $2 more than that of the San Francisco metro area’s, which stood at $61.31.
The gap between the areas’ fair market rents increased, too. Last year, the San Francisco metro area’s fair market rent was $3,188 compared to Santa Cruz County’s $3,293. This year, those number shifted to $3,359 and $4,054, respectively.
Santa Cruz, San Francisco and the San Jose-Sunnyvale-Santa Clara metro area have shuffled around the top three spots in each of the report’s past five years.
Former Santa Cruz mayor and Housing Matters governing board member Don Lane said that the ranking does not surprise him at all. Why? Santa Cruz remains an appealing place to live, he said, and UC Santa Cruz continues to grow, which, when paired with inflation, could explain why Santa Cruz’s housing wage increased so much more than other nearby high-priced communities.
“There may be a population factor here, where San Francisco has seen its population diminish a bit, and I don’t think that’s happened in Santa Cruz,” he said. “So you have fewer people fighting for the apartments in San Francisco compared to here.”
Lane also said that, despite the troublesome ranking, the county has made strides in attacking the problem. More affordable units are being built, and more projects are getting into and through the pipeline faster.
“These snapshots are useful to watch, but in a sense, they don’t reflect the present,” he said, adding that the work happening right now to increase the county’s affordable housing stock could take a number of years to reflect in the data. “In three or four years, when a whole bunch of this stuff is actually built and occupied, that’s when we’ll see the shift that I’m hoping we’ll see.”
Lane said that people need to be paid better, too. Even if the housing wage continues to go up, he said, better pay can bring those lofty prices within reach for more people.
Housing Santa Cruz County Executive Director Elaine Johnson agrees, and said she is constantly talking to people who are desperately looking for a place to live — and that keeping people in their homes is just as vital as getting unhoused people into homes.
“More and more people I talk to are living in fear, because they’re living paycheck to paycheck and making difficult decisions every day,” she said. “‘Do I eat? Or do I pay the landlord?'”
Johnson also said that many moving into the county from out of the area might not fully realize the reality of the situation. People living across the country can move to Santa Cruz and find themselves shocked at the cost of living.
“They end up realizing they’re making $4,000 or $5,000 a month and still not making ends meet,” she said, adding that it speaks to the urgent need of a better affordable housing stock. “We need to move off of this treadmill that we’re on and build an affordable inventory.
“It’s going to take us rolling up our sleeves, and building what we say we’re going to build one house at a time. That’s what’s going to move the needle. We can’t keep worrying about what we can’t do.”
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