A two-story apartment complex
A household in Santa Clara County needs an annual income of $125,280 to afford a two-bedroom apartment. But 32.1% of county households have an annual income of less than $100,000. File photo.

Santa Clara County’s ballooning cost of living has exploded.

Cost of living in the county is increasing at a faster rate than wages across all income levels. While its median income has gone up nearly 75% over the past 10 years, the price of a two-bedroom apartment has risen about 90% during the same period. A household needs an annual income of $125,280 to afford a two-bedroom apartment in Santa Clara County, based on the National Low Income Housing Coalition’s 2024 Out of Reach report. About 32.1% of county households have an annual income of less than $100,000 and wouldn’t be able to afford a fair market two-bedroom apartment.

Every year, the U.S. Department of Housing and Urban Development calculates income limits as part of its Section 8 housing voucher program, to determine program eligibility. Those same limits determine eligibility and set the rental cost of many affordable housing programs.

As part of the calculations, the government uses census data to determine the region’s median income for various household sizes. In Santa Clara County, the median income for a family of four in 2024 was $184,300. Low income is 80% of the median income, with some adjustments for the region’s cost of living. For a family of four, that’s $146,100.

Those income levels have been increasing over the past 10 years, but for the county’s lowest earners, it’s not enough.

Scott Myers-Lipton, San Jose State University sociology professor emeritus, said the San Jose City Council needs to increase the city’s minimum wage and change zoning laws to allow for more medium density affordable housing. Without policy changes, Myers-Lipton said the region’s steep wealth divide will continue to grow.

“It doesn’t have to be this way, we have solutions, and it just takes our city council to act and the people to be knowledgeable and to communicate that to our city council,” Myers-Lipton told San José Spotlight.

Myers-Lipton worked on San Jose State University’s Silicon Valley Pain Index for five years. The index has repeatedly found that wealth disparities in Silicon Valley are growing, with the region’s nine richest households holding 12 times more liquid wealth than the bottom 50% of households.

Eight cities in Santa Clara County set higher minimum wages than the state threshold. Out of those, San Jose is second from the lowest. Myers-Lipton said it’s “shameful” San Jose hasn’t continued to lead the county on minimum wage increases.

He said the city needs more affordable housing and proposed increasing business taxes to better fund affordable housing programs. He said the city should increase the amount of space zoned for multi-family housing — a plan that fellow SJSU professor of strategic management Robert Chapman Wood has pushed.

Wood, who chairs the housing committee of the SJSU Faculty Association, said the city should not only increase the amount of space zoned for multi-family housing, but should also allow for medium-density housing projects.

Projects that meet the city’s required higher density often need more concrete, steel and other expensive building materials, which drives up the cost of housing. Wood said apartment buildings or townhouses can be built more economically with lower density, making that housing affordable by design. He said San Jose doesn’t have any permissible zoning for mid-density housing, which is about 20 homes per acre.

“To make space for the million more people that we need to build housing for, I argue and generally my union argues that we need more land where it’s legal to build the kind of lower cost housing that teachers and other middle class people can afford, and to build it without subsidy,” Wood told San José Spotlight.

Without strong policy intervention, Myers-Lipton said the region’s cost of living crisis will continue.

“We tried to dramatize that in the pain index, because there’s this idea that it’s going to get better. No, it’s getting worse,” Myers-Lipton told San José Spotlight. “We’re the richest nation in the world in the richest area in the nation. We don’t need to accept this, we need to do better.”

Contact B. Sakura Cannestra at [email protected] or @SakuCannestra on X.

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