Special Report

Cities Where the Middle Class Can No Longer Afford Housing

Source: Nicolas McComber / Getty Images

3. San Francisco-Oakland-Hayward, CA
> Cost-burdened middle-class households: 58.0%
> Median home value: $800,000
> Median household income: $101,714
> Homeownership rate: 54.6%

San Francisco is one of the most expensive real estate markets in the country. The typical metro area home is worth $800,000, four times the median home value nationwide of $200,000. Renters in and around the city are not spared. The average cost of renting in the metro area is nearly double the average across the U.S. as a whole.

The high housing costs in and around San Francisco put a considerable financial strain on many of the metro area’s middle-class residents. Of area households earning between $45,000 and $74,999 annually, 58.0% spend over 30% of their income on housing, and 19.9% spend over half of their income on housing.

Source: gnagel / Getty Images

2. Oxnard-Thousand Oaks-Ventura, CA
> Cost-burdened middle-class households: 60.8%
> Median home value: $550,000
> Median household income: $82,857
> Homeownership rate: 62.8%

Oxnard-Thousand Oaks-Ventura is one of only two major U.S. metro areas where more than 60% of middle-class households spend over 30% of their income on housing. The metro area’s housing market has become far less affordable in recent years. Currently, the typical home in the area is worth about 7.5 times the median household income, when as recently as 2013, the median home value was only 5.9 times greater than the median income.

Housing costs are so high in the area that even those in the highest income bracket are far more likely than typical to be burdened by housing costs. About 19% of households earning at least $75,000 a year in the area spend 30% or more of their income on housing, the second largest share of any major metro area and more than double the 7.4% share nationwide.

Source: NicolasMcComber / Getty Images

1. San Jose-Sunnyvale-Santa Clara, CA
> Cost-burdened middle-class households: 61.9%
> Median home value: $900,000
> Median household income: $117,474
> Homeownership rate: 57.2%

The San Jose-Sunnyvale-Santa Clara covers much of California’s Silicon Valley region, an area characterized by its high-paying tech industry. Living in one of the wealthiest parts of the country, the typical metro area household earns $117,474 a year, and over one-quarter of households earn at least $200,000 a year. The area’s high incomes have driven up property values, making it difficult for those like teachers, service workers, and firefighters, who earn incomes that fall in the middle-class range on a national scale, to afford housing. Of area households earning between $45,000 and $74,999 annually, 61.9% spend over 30% of their income on housing, making it more difficult to afford other necessities.

The area’s booming tech industry helped create the housing crisis, and now many of those same companies are taking measures to solve it. For example, Google recently pledged $1 billion for a housing initiative. The plan includes allocating $250 million in incentives for developers to build 5,000 affordable housing units and $50 million to nonprofits that help the homeless find shelter.

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