An “epidemic” of homelessness, low wages and the steadily increasing cost of living and housing makes Orange County one of the least affordable places to live in the nation, according to the annual Orange County Community Indicators Report.
The problems exist in spite of job growth and low unemployment rates, the 2018 report, released in July, said.
The 80-page annual report points out housing costs currently are 356 percent higher than the nation’s average, adding “the sentiment that ‘Orange County is an expensive place to be poor’ is more than just a sound bite; it is a reality.”
Median incomes of county residents simply cannot compete with the rising costs, it reported.
“On a national scale, Orange County is one of the costliest [housing] markets in the country,” Orange County United Way Chief Operating Officer Carla Vargas said.
The data breakdowns were compiled by the Children & Families Commission of Orange County, CalOptima, Orange County United Way, Hope through Housing, Orange County Community Foundation and Orange County Department of Education. The County of Orange and Orange County Business Council served as “contributing partners,” according to the report.
The median home sale price for an “existing single-family home,” it states, reached $785,500 in December, a 5.4 percent increase from the $745,000 recorded average in 2016.
“The percentage of first-time homebuyers able to afford an entry-level home fell to 40%, down from 43% in 2015 and 2016,” the report states. “A first-time buyer would need a minimum income of approximately $102,000 to qualify for an entry-level home in Orange County.”
Los Angeles is the only other county, within neighboring regions, to match this rate, according to a regional comparison from the California Association of Realtors.
The Orange County study notes “an entry-level home is defined as a home priced at 85% of median, which was approximately $671,000 in Orange County in December 2017.”
The median single family home sale price in Orange County jumped from $453,524 in 2008 to $785,500 in 2017, compared to the statewide average of $283,060 in 2008 and $549,560 in 2017.
United Way’s COO Vargas said “the cost of housing in this community is one of the most challenging [issues].”
While there has been job growth in certain fields, increases in median income and a decline in unemployment rates, it isn’t enough to combat the escalated cost of living, which the report states is 87 percent higher than the national average.
To afford a one-bedroom apartment at median price would require pay of $28.71 per hour, the “equivalent of just under $60,000 per year” according to the indicators report. It labels the county currently as the most expensive rental market in Southern California.
“Still, 64% of jobs in Orange County do not earn enough to afford median rent on a one-bedroom,” it states.
A minimum wage worker can afford to pay $572 monthly in rent, while the “median market rent” for a one-bedroom currently is $ 1,493, a two bedroom is $1,876 and a three bedroom is $2,626, according to an analysis from the U.S. Department of Housing and Urban Development of Fair Market Rent data shown in the report.
This leaves a typical “minimum wage earner” in 2018 having to work 104 hours per week to pay for a one bedroom apartment at median price.
“The declining value of the minimum wage in the face of inflation is also a potential factor, as is declining union membership,” the report adds.
The report cites The Costs to Our Community study drafted by United Way, Jamboree and the University of California, Irvine, which found difficulty securing jobs with high enough wages to afford living in Orange County to be the “number one contributor to homelessness.”
Of the homeless individuals surveyed in the study, 40 percent said this was a factor. The second most frequently reported component was trouble “finding or retaining” affordable housing, followed by “a significant life event” such as domestic violence, divorce, disability and drug and alcohol addiction.
“There is a big challenge and not as much support as there could be for not only affordable, but permanent supportive housing [for the homeless],” Vargas said.
The report adds that many have “opted out” of the labor force since the recession and are not included in current unemployment figures because they are not actively seeking jobs.
“The more workers out there, the less ability workers have to demand higher wages.”
Vargas said progress has been made in the sense that issues of low wages, homelessness and the rising costs of living and housing have gained more recent public attention.
“I think it’s in a better place than it has been as far as attention goes and more people are willing to do something about it beyond the day-to-day people you’d expect to do something,” she said.
Potential solutions cited in the report include “regional coordination” and Orange County United Way’s 2018 community-wide initiative that aims to use the county’s “collective private and public resources” which includes “partnering with local private and public leaders working to identify locations to develop new permanent supportive housing” and “engaging landlords and property managers in the Orange County private market apartment community who can help bring existing units online for permanent supportive housing.”
The report refers to the Orange County Board of Supervisors adoption of a resolution in March to support Orange County’s Declaration on Housing which aimed to “acknowledge a shared commitment to increase Orange County’s housing stock in order to accommodate the needs of workers and families of all income levels by committing to enable the market to build more housing, including options at or below a $500,000 price level.”
OC Public Works Assistant Director Vicki Quiram sent a letter to Board of Supervisors Chairman Andrew Do June 5 with “Follow-up information” regarding the declaration. The document addresses “strategies to encourage residential development” and to “assist with mitigating the housing crisis.”
The supervisors also approved a Housing Funding Strategy plan in June which focuses on the need for supportive housing for the county’s homeless.
“The urgent crisis of homelessness requires swift action to create pathways out of homelessness for the most vulnerable in our community and this HF Strategy outlines key next steps to maximize housing options for those who need it most,” the funding strategy report states.
Vargas said she agrees it is important for the county to work on “regional collaboration” and to “raise more awareness for coordination between “the private sector and the public sector.”
She said the report is “used in different ways for different constituents” and aims to reach a broad range of readers through its multiple “pivot points,” which she said adds to the goal of “collaboration.” The report, she said, is used by “business people who want to understand what the economy is like here” and for “nonprofits to understand the needs in order to solicit funding for organizations that work around these issues,” as well as others.
“We [United Way] definitely believe there are solutions that should and could be implemented in this community and we will continue to shine a light on them,” Vargas said.
Kassidy Dillon is a Voice of OC intern. You can contact her at kdillon@voiceofoc.org.