Why California’s poverty rate is second only to Louisiana

The rent, as we all know, is too damn high.

So is California’s poverty rate.

The two things are related.

That’s the not-so-surprising finding of a new analysis published by the Pew Charitable Trusts: If California’s rents dropped to the national average, the state would slash its poverty rate by 30%. The child poverty rate would decline by 36%.

The report is meant to highlight an important, if sometimes overlooked, aspect of poverty: It isn’t just about how much a person makes.

“Anti-poverty programs will be much more effective if we address people’s expenses, and rent is the number-one line item for most Americans,” said Pew researcher Alex Horowitz.

Case in point: CalFresh, the state’s food stamp program, saw an increase of $13.1 billion in benefits between 1989 and 2023. Over that same period, rising rents ate away 78% of that increase, according to the analysis.

California’s official poverty rate, which currently matches the national average of 10.7%, has always been a misleading stat. Using another official measure that takes into account each state’s housing costs, the percentage of Californians living in poverty rockets up to 17.8% — the second highest rate in the country after Louisiana.

That makes bringing down rents an especially effective anti-poverty program. If the state’s rents fell by 20%, child poverty would decline by roughly a quarter, the report found.

Twenty percent may seem impossibly ambitious in a state where rents often only seem to go in one direction (with some noteworthy exceptions), but that’s roughly how much typical rents declined in Austin and Minneapolis between 2021 and 2025. Pew researchers attribute that feat of affordability to local policy changes that have allowed for more housing construction.

Those policies — allowing for denser housing in cities, reducing parking requirements for new developments, encouraging the construction of ADUs — mirror many of the laws adopted at the state level in California. Those laws have yet to result in a major increasein new housing, but proponents are optimistic that a building boom is on the horizon.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.