Rents more affordable, but racial wealth gap widens

Between 1999 and 2020, SPUR found that the Bay Area lost 300,000 households making less than $100,000, while at the same time gaining 625,000 households making more than $100,000.

Bay Area apartment rents became more affordable between 2010 and 2021 relative to the region’s surging median income, but racial wealth disparities worsened at the same time, according to a new study.

The income difference between the highest earners, such as white collar professionals in tech and finance, and lower-earning jobs also widened, making it harder for many renters to find secure housing, according to the study released Tuesday by San Francisco think tank SPUR and economics firm Concord Group.

Occupations previously considered middle-income — such as teaching, postal delivery and construction — now make below 80 percent of the area median income or less, according to the report.

That disparity has led to major societal challenges: Many Bay Area teachers struggle to afford housing near schools, and there’s been a persistent shortage of staff in recent years. A shortage of construction workers has also exacerbated the region’s sky-high building costs, directly contributing to the housing shortage.

San Francisco saw a massive 71 percent increase in median income from 2010 to 2021, with the median-income family earning $121,826 per year. Across the nine-county Bay Area, median annual income grew 49 percent during that period, to $112,609.

That increase in earning power outpaced rental costs, which grew 36 percent between 2010 and 2020, a change from $1,662 to $2,286 per month.

“Housing has become more affordable to renters,” said Sarah Karlinsky, a senior advisor at SPUR and author of the report, which she said was the report’s biggest surprise and “counterintuitive.”

At the same time, Bay Area leaders “haven’t been able to grapple with the housing shortage” and make significant progress on expanding overall supply to match demand, which disproportionately hurts lower-income residents, she said.

The figures aren’t adjusted for inflation. Data for more recent years, which have seen a softening rental market due to the pandemic, wasn’t available.

Black, Latino and Hispanic households saw income gains last decade, but the groups continue to lag behind White and Asian residents.

Black households’ median income was 74 percent of the area median income as of 2019, while Latino and Hispanic households made 73 percent. White households made 110 percent of the area median income and Asian households made 121 percent, the highest figure of any racial group.

A population shift led to a major loss in lower-income earners before the pandemic. Between 1999 and 2020, SPUR found that the Bay Area lost 300,000 households making less than $100,000, while at the same time gaining 625,000 households making more than $100,000.

In contrast, census data during the first year of the pandemic showed a major outmigration of wealthy households as remote work became popularized.

The median household income of the average-size Bay Area household was around $108,000 per year. (That’s more than 50 percent higher than the national average of $67,521, according to census data.)

Becoming a homeowner remains far out of reach for middle-income and lowincome renters. A household making 100 percent of the median income is almost $360,000 short of affording the average-price home as of 2020. In 2000, the gap was $196,000.

SPUR, which has long advocated for more housing development, reiterated the continued need for more homes at all price points. It also said more financial aid was needed for lower-income households, particularly Black and Latino residents.

A SPUR study from 2019 estimated that the region was short around 700,000 homes over the previous two decades.

That means the region remains woefully short of homes, even after pandemic population losses across the region, Karlinsky said.

“There is still definitely a need,” she said.