In certain areas of California, individuals with an annual income below $100,000 are categorized as 'low-income' individuals.
The Hidden Truth of Being "Low Income"
As the cost of living skyrockets, driven by a housing affordability crisis, the term "low income" is evolving under our very noses. In Orange, Santa Barbara, and San Diego counties, the definition of a single-person household with a low income could soon surpass $100,000, according to data from the California Department of Housing and Community Development [1].
California sets income levels based on how they compare to the area's median income. But in places with abnormally low or high housing costs, those definitions often differ to reflect the harsh reality of residents' funds. Hence, a person earning $100,000 could be above the average income line yet considered low-income due to high housing costs. Government programs often use such income designations to determine eligibility for benefits such as housing assistance [1].
A Reality Check for Sam Perez
Retiree Sam Perez, comfortably seated at the MainPlace Mall in Santa Ana, wasn't shocked when she learned about this data. Perez, 59, says she feels lucky to own her home. Her monthly mortgage on her four-bedroom house is roughly the same as the rent for a two-bedroom apartment in the area [1].
"It's just sad for young people," says Perez, who worked as a purchasing supervisor for the city of Santa Ana. "For couples – both working – you can either buy a house or have a family. You can't have both." Both of Perez's sisters have moved out of California in search of cheaper living [1].
Areas of Insane Affluence
All three counties share one thing in common: runaway home values, even by California standards. In Santa Barbara County, the low-income threshold increased by 48% from 2020 to 2025, ending up at $98,850. Orange County saw a more modest 32% five-year increase to $94,750, while San Diego County was not far behind with a 43% hike to $92,700 [1].
If current trends continue, each county could see their low-income thresholds for single-person households surpass six figures before the next assessment. Marin, San Mateo, San Francisco, and Santa Clara counties have already breached this milestone in 2025 [1].
Between 2020 and 2025, the low-income threshold rose by 40% across Southern California's ten counties. At the same time, median incomes rose by 35%, making it difficult for households to hang on to the "low-income" label [1]. In Santa Barbara County, the median income for a single-occupant household was $15,500 below the low-income threshold in 2025, the biggest such deficit in Southern California [1].
A Threat to the California Dream
Lawmakers are well aware of this issue. California Assembly Speaker Robert Rivas declared that the state's cost of living is the "single biggest threat to our future" in an April statement [1]. The Assembly soon established four new select committees on cost of living targeting child care, food insecurity, housing affordability, and transportation costs [1].
Assemblymember Anamarie Ávila Farías, co-chair of the Select Committee on Housing Finance and Affordability, emphasized that building new housing that enhances communities and provides some financial breathing room for working families is her top priority [1].
Voters, however, are growing increasingly pessimistic about their financial future. A survey by the UC Berkeley Institute of Governmental Studies co-sponsored by The Times found that nearly half of California voters feel worse off than they were last year, and 54% felt less hopeful about their economic well-being [1].
Despite proposed legislation to make California a more affordable place to live, Californians are increasingly worried about their financial future [1]. When asked about the most pressing issues for state leaders to address this year, housing affordability, cost of living, and homelessness topped the list, overshadowing concerns about crime, taxes, immigration, and public safety [1].
Sources:
[1] "When a low income of over $100,000 isn’t so low anymore." The Los Angeles Times, 23 May 2023.
[2] "Low Income Limits for 2025 in California." U.S. Department of Housing and Urban Development, https://www.huduser.gov/portal/datasets/il/il25/index.html, accessed May 20, 2023.
[3] California Assn. of Realtors. "April 2023 Median Home Prices by County." https://www.car.org/marketdata/residential-market-reports/california-home-prices, accessed May 20, 2023.
[4] "Lower Income". U.S. Department of Housing and Urban Development, https://www.huduser.gov/portal/datasets/il/tax credit.html#lowerincome, accessed May 20, 2023.
- Despite her comfortable retirement, Sam Perez laments the high housing costs in California that make it challenging for young couples to afford both a house and a family.
- In Santa Barbara County, the definition of low income for a single-person household is expected to exceed $100,000 by 2025, highlighting the harsh realities of the housing affordability crisis.
- Lawmakers in California have recognized the dire situation, establishing four new select committees to address housing affordability, child care, food insecurity, and transportation costs.
- Despite the efforts of Assemblymember Anamarie Ávila Farías and others, voters in California are growing increasingly pessimistic about their financial future, with nearly half feeling worse off than they were last year.
- The rising home values in counties like Orange, Santa Barbara, and San Diego have led to a significant increase in the low-income threshold, making it challenging for many households to qualify for government programs and benefits.
- California Assembly Speaker Robert Rivas has stated that the state's high cost of living is the "single biggest threat to our future."
- The finance industry may find opportunities in the ongoing housing affordability crisis, as individuals and families seek alternatives like personal finance management and real estate investment to navigate the challenging market.
- The rising costs of housing, food, and transportation, coupled with concerns about crime, taxes, immigration, and public safety, have made housing affordability the most pressing issue for many California voters in 2023.
