PPIC Logo Independent, objective, nonpartisan research
Blog Post · February 27, 2024

California’s Renters

photo - Woman at Apartment Door Activating Alarm as Leaving

Renters make up a much larger share of households in California (44%) than in the rest of the US (35%)—or in any state other than New York (46%), according to the US Census. This pattern predates the current surge in housing prices and has proved remarkably consistent over the last six decades. Still, recent increases in the cost of buying a home in California have put additional pressures on renters in the state. What do we know about California’s renters—and how they are faring in the midst of today’s housing crisis?

Within the state, renters are most common in the dense urban cores of San Francisco and Los Angeles Counties, where they make up a majority of all households. The share is lower in the rest of the state, but generally still higher than in the rest of the US. Compared to homeowners, renters are younger, more likely to be Black or Latino, and less likely to have a college degree.

The shortage of homes available to buy has kept a growing number of high-income Californians in the rental market. In 1980, the median California renter made 13% more than the median renter in the rest of the country. By 2022, that difference had ballooned to 40%, with no comparable increase among homeowners. Fully one third of California’s renters now make more than $100,000 a year, compared to just 18% in the rest of the country.

Ironically, these higher-income renters help drive up rental costs for lower-income renters, who are more likely to struggle with the higher costs. More California renters spend over half their income on rent than renters in all but two other states. According to the Census Bureau’s latest Pulse survey, a million California households are behind on rent, and 150,000 of them expect eviction is coming soon.

While California is a relatively high-income state with a lot of financially stressed renters, within the state the pattern is reversed. The highest-income areas—most notably San Francisco—have the lowest rates of renter stress. Within California, stressed renters pay about the same rent as others, but their incomes are lower.

Renter stress is really about options, and higher-income residents have more of them. A high-income person who spends too much on rent can usually move to a lower-cost unit.  Likewise, within California, middle-income people in an expensive place like the Bay Area can move out to the Central Valley–perhaps enduring a longer commute in exchange for lower rents. But lower-income people who lack the resources to move and are more likely to depend on transit to get to work, have fewer choices. They must pay the elevated rents or share housing to reduce their costs—sometimes living in overcrowded units to do so. Some may ultimately end up homeless.

California is making strides toward alleviating the situation by relaxing constraints on building new housing. In fact, these efforts have concentrated on encouraging multi-unit buildings in the urban core, and these buildings are overwhelmingly rentals. While research shows that any type of new construction brings down housing costs, the effects of new high-rent housing may take time to trickle down to lower-income renters. Units set aside for lower-income renters, combined with protections for those already living in an area, may be the fastest way to bring costs down and provide relief to the state’s beleaguered rental community.


eviction homelessness Housing income Population Poverty & Inequality renter