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California renters are not in a good place, financially speaking.
That’s what the latest Public Policy Institute of California’s statewide poll found when it surveyed 1,576 adults in June.
Consider the economic backdrop. Yes, unemployment is low and pay raises are generous. But that extra cash has been gobbled up by the worst inflation in four decades – price increases that include steep rent hikes.
The PPIC poll offers rare insight into the thinking of California renters. The institute breaks out its poll results by renters vs. homeowners, and the gap between the two demographics can be eye-opening.
It’s no surprise that renters feel financially feeble. The poll found 69% of renters said their personal finances were “fair” or “poor” vs. 33% for owners.
It’s been a tough time to balance the household checkbook, as 40% of tenants polled who said their monetary situation is worse off than a year ago vs. 26% for owners.
Why? It’s the economy, stupid: 55% of renters say California’s business climate is now in a “serious” or “moderate” recession vs. 44% of owners.
And the future is even more bleak with 71% of renters saying the next 12 months in California will be “bad times” economically vs. 66% of owners. The outlook is even darker nationally where 79% of renters and 74% of owners see bad times ahead for the U.S. economy.
Housing strain
Let’s not forget that the price of putting a roof over one’s head is a challenge, especially in California.
The poll found the cost of housing strains a family’s finance “a lot” for 46% of tenants vs. 15% of owners. The cost of shelter is so ominous that loosening environmental protections to build more affordable housing is quite popular – supported by 71% of renters and even 56% of owners.
Housing costs are part of the inflation headache. Rising prices overall are a “serious hardship” for 34% of tenants vs. 14% of owners.
The cash crunch means poverty is troublesome — a “big problem” for their part of California for 46% of renters vs. 38% of owners.
In some ways, this is nothing new. It’s part of a long-running class divide with the renters on the losing end of this dollar gap.
One poll question’s results tell us 66% of tenants see themselves as “have-nots” vs. 33% of owners. Another query has 21% of tenants describing their financial plight as “low income” compared to only 3% of owners.
Yet noteworthy support exists for California to do something to close that gap — 78% of renters want government effort to narrow the rich-poor divides while 63% of owners do.
Renter’s burden
Some 2021 Census data gives dollars and cents insight into the sour mood of California renters, looking at folks “burdened” by paying 30% or more of incomes to housing.
California had 3.1 million out of its 5.9 million renting households deemed financial stressed by housing costs that year – or a 53% share. Note that California renters’ median housing costs are $21,000 vs. $60,769 incomes.
Compare those budget battles to owners, with only 2.3 million stressed households of 7.4 million – or a 31% share. The median housing expenses for all California owners – those with mortgages and debt-free homes – ‘ are $22,944 vs. $109,974 incomes.
So renters spent 9% less than owners – but had 45% smaller paychecks.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
Originally published at Jonathan Lansner