California Renters Need Increased Access to Affordable Housing

All Californians — regardless of income, race, or zip code — deserve to feel secure in their ability to put food on the table and make their rent or mortgage payment. Yet high costs of living are straining the budgets of Californians with low incomes, who have long been struggling to make ends meet.

More than half of California households with incomes below $50,000 had difficulty paying for basic expenses such as food, housing, and medical costs in March and April. Black, Latinx, and other Californians of color were more likely to struggle with basic expenses, being more likely to have low incomes due to past racist policies and ongoing discrimination.

Californians with low incomes are hit hardest by the rising costs of necessities. Policymakers should make sure state efforts to give Californians relief prioritize meaningful assistance to these families and individuals, who have long been blocked from opportunities and have been hit hardest by the health and economic impacts of COVID-19.

The purpose of the CalEITC is to reduce poverty among working Californians, but most people get less than $200 from the credit – far too little to achieve this goal. The credit for workers without dependents – who comprise 74% of CalEITC beneficiaries – ranges from just $1 to $255 per year. Plus, the majority of these workers likely don’t qualify for the federal EITC.

This helps explain why 35% of CalEITC-eligible working-age adults without dependents live in poverty – based on the California Poverty Measure – even after accounting for the tax credits and public benefits they get.

Establishing a much larger minimum CalEITC for all eligible workers would help Californians
who are paid low wages better meet basic needs. It would also help make the tax code more
equitable by strengthening a credit that largely benefits Californians of color.