Closing the Gap: Making Ends Meet in the Bay Area

By Susannah Parsons, All Home

All Bay Area residents, regardless of income level, should be able to meet their basic needs and live in safety and dignity. Yet given the area’s high cost of living here, many people across the region (especially those with the lowest incomes) struggle to afford the basics. Food assistance, refundable tax credits, and cash are vital tools to help these households make ends meet. 

Closing the Gap report cover

Understanding the gap between the resources that different households have and the basic cost of living can point to policies that will better meet people’s needs. All Home asked Sara Kimberlin of the Stanford Center on Poverty & Inequality and the California Budget & Policy Center to analyze these cost-of-living gaps and the role of public benefits for extremely low-income households in the Bay Area.

The study found that because housing is the largest expense for most ELI households, housing vouchers, or other programs that reduce housing costs—like a renters’ tax credit or subsidized housing units—could single-handedly close the cost-of-living gap in most cases. The study also underscores the importance of public programs like CalWORKS and SSI and refundable tax credits, and how expansions of those supports could powerfully improve the circumstances of Californians struggling to get by.

Here are three takeaways from the research, and what we can do about these problems.

1. Cost-of-living gaps vary widely among households living with extremely low incomes

Figure 1

The variation we see in cost-of-living gaps reflects the fact that different types of households have somewhat different basic needs expenses. For example, families with children have specific basic needs, like larger homes and need for child care. Some public supports provide more benefits for families or are only available for families with children. Adults under 65 not living with children may have lower basic needs expenses in some cases – but are generally eligible for a narrower range of public supports and smaller benefit amounts. (See the full report for info on the California Poverty Measure, which the study used to represent the basic cost of living.)

2. Public benefits are essential to close the gap – but for nearly all ELI households, they aren’t enough. 

Public benefits programs play a critical role in helping households make ends meet, reducing the statewide poverty rate under the California Poverty Measure by at least 40 percent. These programs include Supplemental Security Income (SSI/SSP) cash benefits for seniors and people with disabilities, cash grants for families with children through CalWORKs, food assistance through CalFresh and WIC (Special Supplemental Nutrition Program for Women, Infants, and Children), and refundable federal and state tax credits, like the Earned Income Tax Credit and Child Tax Credit. Examining eligibility for assistance based on different household types with different incomes helps to show which programs can provide the deepest support and how all benefits combined can help households cover their basic needs. 

Figure 2
Figure 3

As Figure 2 shows, a hypothetical older adult who is receiving SSI and food assistance faces a significant gap in meeting their basic needs in a high-cost county like San Mateo. Those who aren’t eligible for SSI (for example, because they have a disability that isn’t deemed severe enough) and have no other means of income are living in even more extreme precarity.

Figure 3 shows that a hypothetical single parent with two children who is working part time can access additional cash assistance through CalWORKs, as well as federal and state tax credits and food assistance – bringing their family close, but still short of the CPM threshold. Importantly, moving to full-time hours makes the family only slightly better off (and still short of the CPM threshold) because they would lose access to essential benefits—what’s known as a benefits cliff.

3. Housing support can close the gap

Housing is the largest basic needs expense for most households. The analysis shows that public supports that make housing affordable—like housing vouchers or subsidized housing units—can be very effective in closing basic cost-of-living gaps.

The subsidy value of a federal Housing Choice Voucher single-handedly eliminates the cost of living gaps for all example households, even in the highest-cost county. 

Figure 4

A Safety Net that Californians Deserve

Too many Bay Area residents are struggling to meet their basic needs. Closing cost-of-living gaps is an essential starting point to enable our neighbors who are struggling the most to make ends meet. More must be done to achieve true economic security, but first things first.

Reducing barriers to programs like CalFresh and CalWORKs is critical, as is broadening eligibility for these programs so they serve more people. The report’s analysis assumes households are receiving all public benefits for which they are eligible, but that is far from the case. Lived experience and research consistently prove how challenging it is to access benefits and keep them. In Poverty, By America, Matthew Desmond explains that almost $142 billion in federal benefits go unclaimed every year. Outreach campaigns, simplifying forms and processes, and other common-sense improvements are often relatively cheap and easy to implement, and can have a substantial impact on uptake. The report also shows the impact of being denied even these benefits; undocumented Californians and formerly incarcerated people face even greater barriers to economic security. 

Strengthening our safety net to enable people to meet their needs would also help prevent homelessness: In the recent statewide survey of people experiencing homelessness conducted by the UCSF Benioff Homelessness and Housing Initiative, 70% of respondents said they could have avoided homelessness with as little as $300 extra each month. Targeted assistance changes lives, and is within reach for state, regional and even local governments to enact. 

But at the end of the day, California’s safety net has a gaping hole over the greatest household expense: housing. This and other research shows that robust rental assistance can be transformative for the stability of low-income Californians. Recent state legislative proposals have attempted to address this need, but greater political will is necessary to win. SB 569 (Glazer) was particularly promising: it would have expanded the state Renter’s Tax Credit, providing cash assistance to thousands of low-income Californians to make rent. Despite broad bipartisan support and significant momentum, the bill died earlier this summer. 

Californians have built the movements and political will that make our state a leader on social justice, climate change, and other issues—we need the same commitment to end poverty in our state. It will take a historic, cross-sector coalition to transform the housing and economic systems that have allowed homelessness and poverty to persist, and it’s already taking shape. When we focus on supporting those who are struggling the most to make ends meet, everyone in the state will benefit. Together, we can build a California that lives up to the dream.