In California’s spendy cities, living comfortably costs more than almost anywhere else.
From the Bay Area to Orange County, living well requires incomes north of $150,000 in the pricier places, according to a recent study. A family with two kids needs more than $400,000 per year in some spots.
The study, conducted by financial technology company SmartAsset, analyzed 100 of the largest cities in the country.
San José ranked as the second-most expensive city, where a single adult must make nearly $160,000 and a family of four needs over $400,000 to live comfortably, the study found. Orange County cities — Irvine, Anaheim and Santa Ana — followed closely behind.
New York City topped the list, with a salary for comfortable living at about $900 higher than in San José.
Los Angeles ranked 16th on the list, where a single adult must make $120,307 to live comfortably. A family of four should bring in just over $280,000 annually.
San Diego and Chula Vista tied for seventh place, with a $136,781 salary for a single adult. San Francisco came in ninth, followed by Fremont and Oakland, which tied for 10th.
Santa Clarita, Long Beach, Riverside and Sacramento also made the top 20 list.
The study measured comfortable living using the 50/30/20 rule, in which half of a household’s post-tax income should go to needs, 30% to wants and 20% to savings.
The company used the MIT living wage calculator to determine cost of living by region for single adults and families of four.
A family of four faces the toughest living costs in the Bay Area, taking up four of the top five cities with the highest salaries needed to live comfortably.
San Francisco topped that list, with income for two parents projected at $407,597. Projected income in San José was slightly lower at $402,771, followed by Fremont and Oakland.
The study’s findings are in line with existing research that paints a grim picture of the statewide housing crisis, said Carolina Reid, an associate professor of city and regional planning at UC Berkeley.
“California is one of the more expensive places to live, and that definitely is true when we’re talking about families who are juggling multiple competing demands on their incomes,” Reid said.
Housing costs, groceries and gas prices — all considered necessities in the study — have skyrocketed nationwide, while wages have largely remained stagnant.
California housing costs are about double the national average. The state has struggled to keep up with demand, largely due to the lingering impacts of decades-long missteps in housing policies, said Paavo Monkkonen, a professor in urban planning at UCLA.
“It’s a problem that we created very slowly over a long period of time,” Monkkonen said.
The expected salary needed to live comfortably was significantly higher than the median household income for some California cities.
The difference is especially stark in Santa Ana, where the median salary is $95,118 — over $56,000 less than the projected salary needed to live comfortably in the city for a single adult.
Los Angeles had a $38,000 gap between the city’s median household income of $82,263 and the projected salary.
Cost of living is often hard to measure given the variability in how households choose to spend their money, Reid said. Housing is also the primary driver for living costs, which Monkkonen said is difficult to measure given the market’s unpredictability.
“People are living here somehow, right?” he said. “If you just look at the incomes and rents separately, you don’t really get a picture of how people are doing it…they’re spending a lot of their incomes on rents, but they’re also doubling up.”
