California rent hikes often outpace pay raises
Perhaps the best that can be said for the plight of California renters is that it could be worse.
My trusty spreadsheet reviewed monthly rents and hourly wage data collected by United Way, comparing 2024 with 2019 for 96 U.S. metropolitan areas, including nine in California. Those statistics show that paychecks are not keeping up with monthly rent payments, both in California and nationwide.
In those nine California markets, using population-weighted data, tenants experienced 4.8% annualized rent growth over five years to $2,768 per month in 2024. Meanwhile, workers in those metropolitan areas saw wage increases of 5.4%. a year
By this benchmark, wages outpaced rents by 0.6 percentage points a year in 2019-24. That slim advantage is, at least, a positive gap.
In 87 U.S. markets tracked outside the Golden State, the same math shows rent hikes outpaced raises by 1.1 percentage points annually – 5.8% annual rent growth to $1,980 monthly vs. 4.7% yearly wage increases.
Limited renter wins
Please note that the California wage advantage was largely limited to the Bay Area.
San Jose wage growth outpaced rent hikes by 5.6 percentage points – that’s the No. 1 gap nationally – when contrasting 2% annual rent growth over five years to $3,319 monthly in 2024 vs. 7.6% yearly wage increases.
San Francisco wages outpaced rents by 4.4 percentage points – No. 2 nationally – 1.3% annual rent growth to $3,002 monthly vs. 5.7% yearly wage increases.
Renters in Los Angeles and Orange counties saw slight progress: Wages outpaced rents by 0.2 percentage points – No. 10 nationally – 4.8% annual rent growth to $2,882 monthly vs. 5% yearly wage increases.
By the way, wages outpaced rent hikes in only nine other metro areas: Boston, New Orleans, the District of Columbia, San Antonio, Austin, Minneapolis, Portland, Seattle, and Baton Rouge, Louisiana.
Elsewhere in California
The three metro areas where wages outpaced rents accounted for 60% of the California population tracked by this study.
Here’s how renters fell behind in the rest of the Golden State, ranked by the size of that financial burden…
Sacramento: Rents outpaced wages by 0.3 percentage points – No. 19 nationally – 5.8% annual rent growth to $2,308 monthly vs. 5.5% yearly wage increases.
San Diego: Rents outpaced wages by 1.6 percentage points – No. 43 nationally – 7.1% annual rent growth to $3,013 monthly vs. 5.5% yearly wage increases.
Stockton: Rents outpaced wages by 1.7 percentage points – No. 44 nationally – 6.7% annual rent growth to $2,391 monthly vs. 5.0% yearly wage increases.
Inland Empire: Rents outpaced wages by 3.1 percentage points – 21st-worst nationally – 7.9% annual rent growth to $2,490 monthly vs. 4.9% yearly wage increases.
Fresno: Rents outpaced wages by 3.3 percentage points – 13th-worst nationally – 8.2% annual rent growth to $1,942 monthly vs. 5.0% yearly wage increases.
Bakersfield: Rents outpaced wages by 3.8 percentage points – fourth-worst nationally – 8.6% annual rent growth to $1,794 monthly vs. 4.8% yearly wage increases.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com