High Rents & Low Incomes: An Unsustainable Recipe

Mammoth Lakes Housing, Inc. 

February 14, 2014

This month, the California Housing Partnership Corporation (CHPC) released a report detailing the failure of the State to address the lack of affordable homes.

“ONE MILLION low-income households in California
do not have access to an affordable home.

The California Housing Partnership Corporation (CHPC) was founded by the State in 1988 as a a private nonprofit organization to help “preserve and expand the supply of affordable homes for lower-income households throughout California.”

According to the report, called “HOW CALIFORNIA’S HOUSING MARKET IS FAILING TO MEET THE NEEDS OF LOW-INCOME FAMILIES: Recommendations to the leaders of the State of California,”

“The housing crash has put growing pressure
on rental prices
while failing to make homeownership attainable
for lower-income households.”

The report goes on the explain that the foreclosure crisis drove many homeowners into the rental market, which has driven up demand and rental prices. Additionally, incomes have not kept pace with increasing housing costs. California’s median rent rose more than 20% from 2000 to 2012, while median incomes fell 8%. The figure below illustrates the divergence between the growth in housing costs and the decrease in median incomes.

Rents versus Incomes

In an effort to works towards a sustainable solution to the seriousness and far-reaching effects of this issue, CHPC details what authorities can do to alleviate the issue.


1. Dedicate a long-term source of state funding for affordable housing and make an immediate general fund investment in the state’s existing rental housing production program.

2. Strengthen local jurisdictions’ tools for building and preserving affordable homes by taking three important steps:

a) Lower the threshold for voter approval of local infrastructure measures, including affordable homes, to 55 percent, as it is for education bonds;

b) Create a new tax increment financing mechanism that gives local governments the ability to fund the development of basic infrastructure including transportation, housing, and parks; and

c) Allow local jurisdictions to require the inclusion of a percentage of affordable homes in new developments.

3. Invest a significant portion of Cap-and-Trade revenues in affordable transit-oriented homes and energy efficiency retrofits to existing multifamily affordable housing.

You can read the full report on our website here.