If you earn minimum wage in San Jose, you either need a roommate or a second job to afford market-rate rent.
For the 44% of San Jose’s population that rents their homes, this is likely not a surprise. But a new report describes just how stratified the local rental market has become over the past year.
California is the most expensive rental market in the country, and renters in the San Jose region pay the second-highest rent in the country, with the fair market rent for a two-bedroom home floating around $3,051 a month, according to a report from the National Low Income Housing Coalition.
To afford this rate without spending more than one-third of their income, the average renter needs an hourly wage of $58.67. The mean wage in San Jose is shy of that at $52.05, which means someone making that much can afford to pay $2,707 per month in rent, the report said.
But many people in the South Bay don’t come close to earning the mean wage. People in the San Jose workforce earn more than minimum wage, but still fall far short of being able to pay market-rate rent, including childcare administrators, food service managers, human resources specialists, loan officers and others.
Shirley Stager, a mother of two children who works in human resources, said she’s moved around San Jose repeatedly in recent years and sometimes paid rent that took up 70% of her income.
“I always came up with the money somehow because I needed a place to live,” Stager told San José Spotlight.
In California, one-third of workers earned less than $14.35 in 2017, according to a UC Berkeley study. Since then, the state has pushed to raise the minimum wage to $15, and some cities pushed it higher, such as San Jose which raised it to $15.45.
But these wage boosts aren’t enough for workers living in metropolitan areas like San Jose who have seen a sustained rise in the cost-of-living.
To put this into perspective, a person earning minimum wage in California who pays one-third of their income to rent could theoretically afford to spend $728 on housing per month, according to the coalition’s report. A person earning the minimum wage in California would need to work the equivalent of two full-time jobs or have at least one roommate to support a one-bedroom rental at fair market rent.
In San Jose, a rental household needs to earn $122,040 each year to afford a two-bedroom home at fair market rent. The median household income for San Jose residents between 2015-19 was well below that threshold at approximately $109,000.
“I will say for the San Jose region specifically, with the proximity to Silicon Valley, there’s just tremendous inequality,” said Shanti Singh, communications and legislative director for Tenants Together. She noted that tech companies generate low-income jobs, but there’s little effort by lawmakers to ensure those people have housing.
“We need to be building low-income housing for the jobs we’re creating, and we haven’t done that a lot in the Bay Area, and certainly not in San Jose,” Singh added.
Minimum wage renters in expensive markets like San Jose have so far been spared mass evictions thanks to eviction moratoriums imposed by federal, state and local governments. The San Jose City Council recently extended the city’s eviction moratorium through August.
The federal American Rescue Plan also allocated more than $46 billion for struggling renters, according to a statement in the report from Marcia Fudge, secretary of U.S. Housing and Urban Development. But she acknowledged that renters have been in a crisis for years.
“Even before the pandemic, our nation had a shortage of 7 million affordable and available homes for renters with the lowest income,” Fudge said in her statement, noting that 70% of these households spend more than half of their income on rent.
Lack of affordable housing also disproportionately affects people of color. The report noted that Black and Latino workers are more likely than their white counterparts to be employed in jobs with low wages, and as a result face a larger gap between what they make and housing costs.
State lawmakers have tried to address various inequities in the short-term, but plans for the long-term are lacking, said Calvin Abbasi, political communications and digital organizing manager at PICO California.
“The polices in effect right now are band aid solutions,” Abbasi said in a statement. “The eviction moratorium will eventually end, rent debt relief will run out, and people will still be living under poverty conditions.”
The National Low Income Housing Coalition’s findings do not come as a surprise to housing advocates in San Jose.
“This has been going on for a long time,” said Sandy Perry, president of the Affordable Housing Network of Santa Clara County. “It’s a trend, it’s getting worse, but it’s a trend.”
Perry said the affordable housing crisis is made worse by the expansion of tech developments, such as the Google campus known as Downtown West, without sufficient concern for the effect it’s having on vulnerable residents.
“If you have a serious problem which is causing thousands of people to end up in the streets,” Perry said, “a responsible person would try to figure out why.”