A source of poverty

The cost of housing is so high in California, it’s pushing millions of people into poverty.

This isn’t hyperbole. When the cost of living is weighed, California has had the highest poverty rate in the country for years — more than 20 percent of residents, or nearly 8 million people.

Now, there’s evidence that solving California’s housing crisis would dramatically reduce the number of people living in poverty here.

The official federal poverty measure doesn’t take regional variations in the cost of living into account, so many experts don’t consider it to be the most accurate metric. It’s under “supplemental” poverty measures, dating back to the late 1960s, that California looks considerably different from the rest of the U.S.

Now, researchers at the Public Policy Institute of California and Stanford University are bringing even greater scrutiny to an item that’s consuming more and more of lower-income Californians’ resources: housing.

Their results are startling. When the researchers ran a model of the state’s poverty rate with every Californian bearing costs similar to those in Fresno County, the overall poverty rate declined dramatically — from about 21 percent to 14 percent. That’s nearly 2.4 million Californians who would no longer be in poverty.

“Housing is the biggest factor,” said Sarah Bohn, a research fellow at Public Policy Institute of California. “When we compare our measure, which accounts for how living costs factor into poverty, with the official measure, it is the major challenge low-income families face.”

The quickest, easiest and most market-friendly way to lower the cost of housing in California would be to increase its supply. This is particularly true in California’s coastal cities, where local regulations and provincial attitudes have prevented too much construction for too many decades. The multifamily housing construction that can shelter the most people for the least expense has been particularly demonized in many of these cities.

There is a relationship between regional wages and the cost of living. Some critics of housing production have claimed that cheaper rents would depress wages, and therefore lower-income Californians would see no benefit. But this is a dangerous fallacy. If struggling Californians had lower rents

and lower wages, more would also qualify for federal antipoverty benefits. The bottom line is that more housing production would benefit Californians at every income level.