Santa Cruz area trails only San Francisco for high rental costs

SANTA CRUZ — Coming in behind only the greater San Francisco area, a newly released housing report ranks the Santa Cruz-Watsonville metropolitan area as the second most expensive region in the nation for renters to reside.

The National Low Income Housing Coalition’s annual report, “Out of Reach,” documents the gap between wages and the price of housing across the United States. A copy of the latest report was posted Thursday to

Results of the latest study come as no surprise to Housing Santa Cruz County, according to a release Thursday from the countywide coalition advocacy group that launched in February 2021.

“This report just confirms the sobering reality in our community that many of us are actively trying to change,” Don Lane, Housing Santa Cruz County board chairperson, is quoted. “Santa Cruz County is experiencing a critical shortage of affordable housing. The work HSCC and other advocates are doing to support affordable housing projects and policies has never been more vital.”

In recent years, the Santa Cruz County area has popped up at the top of numerous national and local reports ranking poor housing affordability. Earlier this year, real estate investment analyst Stessa calculated that the greater Santa Cruz metro had experienced the 15th largest rent increase out of all small U.S. metros from 2019 to 2022. In 2019, the metro area was ranked in a USA Today analysis as the least affordable location for teachers to live in the nation and in 2017, researchers in New Zealand described the Santa Cruz County area as the fourth least affordable place for homeowners in the world, based on the gap between median household incomes and the median home price.

From 2016 to 2020, renters made up an average of 40% of Santa Cruz County residents — representing more than 38,000 households. The “2022 Out of Reach: The High Cost of Housing” report estimates renters’ mean hourly wage at $19.78 and calculates those workers would need to work the equivalent of more than four full-time jobs to afford a two-bedroom apartment at fair market rent.

This report’s methodology assesses jurisdictions through what it calls a “housing wage.” The metric is an estimate of the hourly wage full-time workers must earn to afford a rental home and utilities in that location, using the U.S. Department of Housing and Urban Development’s fair market rent rates and with a spending cap set at 30% of renter incomes.

Santa Cruz County’s housing wage is estimated at $60.35 for a two-bedroom rental, behind San Francisco’s $61.50 and ahead of San Jose-Sunnyvale-Santa Clara’s $55.15 wages. To afford an average $3,138-a-month two-bedroom rent in Santa Cruz County, renters would need to earn $125,520 a year, according to the report.

In the 2021 Out of Reach report, the county ranked third with a $58.10 housing wage, and first in 2019.

Meanwhile, the report puts the average national housing wage at $25.82 per hour needed for a two-bedroom rental home, or $21.25 per hour for a one-bedroom rental home.

To track affordable housing project progress across Santa Cruz County using Housing Santa Cruz County’s affordable housing project map and tracker, visit

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