California’s California poverty rate ranks as the second highest in the United States when factoring in the cost of living and housing expenses, according to recent data. High rent costs are analyzed as the primary factor driving up poverty rates in the state.
According to data released last month by the U.S. Census Bureau, California’s poverty rate based on the Supplemental Poverty Measure (SPM)βwhich accounts for housing, taxes, and medical expensesβstood at 17.8%, trailing only Louisiana at 19.0%. Mississippi (16.8%) and Florida (16.4%) followed in third and fourth places, respectively.
Analysis indicates that rent burdens heavily influence this ranking. A report published last month by The Pew Charitable Trusts estimated that if California’s rent costs dropped to the national average, the overall poverty rate would decrease by 30%, and child poverty would drop by 36%. Even a 20% reduction in rent would cut child poverty by about 25%.
The soaring rent prices also largely offset the effectiveness of low-income support programs. Between 1989 and 2023, CalFreshβCalifornia’s food stamp programβsaw an increase of $13.1 billion in funding, but rising rent costs offset 78% of that support increase during the same period.
Researchers noted that relying solely on income support has limitations in solving poverty issues, emphasizing the need to alleviate housing cost burdens through expanded housing supply.
