In Bay Area, even six-figure salaries are considered ‘low income’

SAN JOSE — In the high-priced Bay Area, even some households that bring in six figures a year can now be considered “low income.”

That’s according to the U.S. Department of Housing and Urban Development, which recently released its 2017 income limits — a threshold that determines who can qualify for affordable and subsidized housing programs such as Section 8 vouchers.

San Francisco and San Mateo counties have the highest limits in the Bay Area — and among the highest such numbers in the country. A family of four with an income of $105,350 per year is considered “low income.” A $65,800 annual income is considered “very low” for a family the same size, and $39,500 is “extremely low.” The median income for those areas is $115,300.

Other Bay Area counties are not far behind. In Alameda and Contra Costa counties, $80,400 for a family of four is considered low income, while in Santa Clara County, $84,750 is the low-income threshold for a family of four.

The eye-popping numbers are harsh reality for Demetrio Gonzalez, a Richmond resident with multiple higher education degrees, including a master’s in education, who supports the work of approximately 1,700 educators in West Contra Costa Unified School District in his position as president of the United Teachers of Richmond. With an income of $48,000, it’s a challenge for him to live in the Bay Area. By the time he pays rent for a home he shares with four roommates, including teachers, along with student loans, food, travel, phone and car payments, he has about $300 left each month.

"With this income, I don’t think it is possible to create a future in the place I love and the place I work,” he said. “When I decide to buy a home — if possible — I’ll have to look elsewhere.”

The new federal income limits are higher than last year and previous years, a reflection of the rising incomes and cost of living in the Bay Area. The increases will allow people at the upper tiers of the “low-income” limits access to some affordable housing programs from which they were previously disqualified.

“We’ve significantly increased income limits at every income level — that means more housing opportunity (because it) broadens the pool of individuals and families (who are considered low income),” said Ed Cabrera, a regional public affairs officer for HUD. “I think it’s fair to say that these income limits are one way to gauge livability and affordability.”

Jeff Levin, policy director for East Bay Housing Organizations, said the market has shifted “dramatically” over the past two decades, forcing renters to spend significantly more on average than they have in previous years.

In Oakland, the median income for renter households is around $40,000, which means that more than half of all renter families qualify as very low income, Levin said. Most of those families are paying more than half their income for housing costs.

Moriah Larkins is one of them. Larkins makes $15.50 an hour working at Home Depot and spends at least 40 percent of that on her HUD-subsidized apartment in West Oakland, she said. Sometimes, it’s even more than that.

“It’s not even enough living in subsidized rent,” Larkins said of living in the costly Bay Area.

Michael Santero, director of asset management for San Jose-based First Community Housing, said it’s easy to see the increased need for affordable housing right now, as more people flock to affordable housing programs offered by First Community Housing and others in the face of rapidly rising housing costs. While the new HUD income limits broaden the group of people eligible for such programs, it doesn’t help alleviate the demand for such housing. It’s up to developers and cities to provide more supply.