Report on Housing Affordability and its Impact on Sustainable Development Goals in California

Introduction: The Housing Crisis as a Barrier to Sustainable Development

An analysis of poverty and housing data reveals that California’s severe poverty rate is almost exclusively a consequence of prohibitive housing costs. This situation directly impedes progress toward several key United Nations Sustainable Development Goals (SDGs). Research conducted by Zachary Parolin for the Niskanen Center, titled “Housing Policy and Poverty: The Case of California,” isolates housing costs as the primary driver of poverty, undermining efforts to achieve SDG 1 (No Poverty), SDG 10 (Reduced Inequalities), and SDG 11 (Sustainable Cities and Communities).

Key Findings: A Challenge to the 2030 Agenda

The report’s findings illustrate a critical disconnect between economic growth and social equity, with significant implications for sustainable development.

1. Direct Impact on SDG 1 (No Poverty): The state’s 17.7 percent poverty rate is artificially inflated by housing expenses. When housing cost adjustments are removed from the Supplemental Poverty Measure, California’s poverty rate falls to near the national average. This demonstrates that the lack of affordable housing, not a lack of income, is the principal factor pushing families below the poverty line.
2. Exacerbation of SDG 10 (Reduced Inequalities): A severe divergence exists between income growth and rental price increases. Between 1985 and 2023, rents rose by 75 percent, mirroring the income growth of the wealthiest 90th percentile households. In contrast, incomes for the 10th percentile increased by only 40 percent. This trend widens the inequality gap, as the housing market caters exclusively to high-income earners.
3. Undermining SDG 2 (Zero Hunger) and Social Safety Nets: Gains from vital social programs are being nullified by housing costs. The estimated $13.3 billion in additional poverty costs attributed to housing since 1980 has effectively canceled out the $11.4 billion in increased Supplemental Nutrition Assistance Program (SNAP) benefits, compromising food security for low-income families.

Analysis of Causal Factors and SDG Implications

The Centrality of SDG 11: Sustainable Cities and Communities

The core of California’s poverty crisis is a failure to meet Target 11.1 of the SDGs, which calls for “access for all to adequate, safe and affordable housing.” The analysis confirms this by showing that families with otherwise sufficient incomes are classified as poor solely due to the high cost of shelter in their geographic area. This not only creates unsustainable communities but also impacts SDG 8 (Decent Work and Economic Growth), as even workers with decent wages cannot afford basic living expenses, indicating that economic growth is not inclusive.

• Poverty Rankings Driven by Housing: California’s status as the state with the highest poverty rate is a direct function of its housing market. Without this factor, its performance is average.
• A Market Disconnected from Low-Income Realities: The housing market’s alignment with high-income growth, a phenomenon observed in only a handful of states, is a primary mechanism driving inequality (SDG 10).

Policy Recommendations for Achieving the SDGs

The research concludes that increasing the housing supply is a fundamental poverty alleviation strategy and a direct pathway to advancing the Sustainable Development Goals.

• Increasing Housing Supply to Combat Poverty: A 10 percent increase in the housing supply within a metropolitan area is projected to reduce poverty rates by 2.5 percentage points, directly advancing SDG 1.
• Financial Relief Through Affordability: A 15 percent reduction in relative housing costs would provide families with an additional $3,600 annually, an amount comparable to the 2021 Child Tax Credit expansion.
• An Integrated Approach: Addressing the housing shortage is presented as the most critical action for making substantive progress on poverty reduction (SDG 1), reducing inequality (SDG 10), and building sustainable, inclusive communities (SDG 11) in California.

Analysis of Sustainable Development Goals (SDGs) in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty
  
  The article’s central theme is the poverty crisis in California, directly linking it to the high cost of housing. It explicitly mentions California’s 17.7 percent poverty rate and discusses poverty alleviation measures.
• SDG 2: Zero Hunger
  
  The article connects housing costs to food security by explaining how the financial burden of rent negates the benefits of food assistance programs. It states that rising housing costs “completely offset $11.4 billion in additional SNAP benefits.”
• SDG 10: Reduced Inequalities
  
  The article highlights the growing gap between the wealthy and low-income families. It points out that rental price growth tracks the incomes of the 90th percentile, while the incomes of the 10th percentile have lagged significantly, exacerbating economic inequality.
• SDG 11: Sustainable Cities and Communities
  
  The core issue discussed is the lack of affordable housing in urban areas like San Jose. The article focuses on how housing costs make cities unsustainable for typical families and proposes increasing the housing supply as a solution.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. SDG 1: No Poverty
   • Target 1.2: By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions.
     
     The article directly addresses this target by analyzing California’s high poverty rate (17.7%) using the Supplemental Poverty Measure, a national definition that accounts for geographic cost differences. It suggests that building more housing is a key “poverty alleviation measure.”
2. SDG 2: Zero Hunger
   • Target 2.1: By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations… to safe, nutritious and sufficient food all year round.
     
     The article implies a threat to this target by demonstrating that high housing costs undermine food security. It notes that the financial gains from SNAP (food stamp) benefits, designed to ensure access to food, were “absorbed by rising housing costs,” leaving families unable to afford basic needs.
3. SDG 10: Reduced Inequalities
   • Target 10.1: By 2030, progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average.
     
     The article provides clear evidence of failure to meet this target in California. It states that since 1985, the incomes of families in the 10th percentile (bottom) grew by only 40 percent, while rents and the incomes of the 90th percentile (top) grew by 75 percent, widening the inequality gap.
4. SDG 11: Sustainable Cities and Communities
   • Target 11.1: By 2030, ensure access for all to adequate, safe and affordable housing and basic services.
     
     This target is the central focus of the article. The text describes a crisis of unaffordable housing, citing that “a family of four needs $57,673 just to meet basic needs” in San Jose. The entire analysis revolves around the premise that housing is unaffordable and that increasing the housing supply is critical to providing access.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. For Target 1.2 (Reduce Poverty):
   • Indicator: Proportion of the population living below the national poverty line.
     
     The article explicitly provides this data: “California’s 17.7 percent poverty rate” as measured by the Supplemental Poverty Measure. It also shows how this rate drops to the national average when housing costs are removed from the calculation.
   • Indicator: Impact of housing supply on poverty rates.
     
     The article suggests a direct metric for progress: “increasing the housing supply by 10 percent in a metropolitan area reduces poverty rates by 2.5 percentage points.”
2. For Target 2.1 (End Hunger):
   • Indicator: Net financial impact of food assistance programs after housing costs.
     
     The article implies this indicator by comparing the value of SNAP benefits to the increased cost of living due to housing: “$13.3 billion increase in poverty costs from housing completely offset $11.4 billion in additional SNAP benefits.” Measuring the gap between these two figures could track progress.
3. For Target 10.1 (Sustain Income Growth for the Bottom 40%):
   • Indicator: Growth rate of income for different income percentiles.
     
     The article provides specific data for this indicator: “From 1985 to 2023, California rents rose 75 percent, closely aligning with the growth of family incomes in the 90th percentile. However, the incomes of families in the 10th percentile increased by only 40 percent.”
4. For Target 11.1 (Affordable Housing for All):
   • Indicator: Cost of basic needs in a metropolitan area.
     
     The article uses this as a measure of affordability, stating, “In San Jose, a family of four needs $57,673 just to meet basic needs, compared to $39,674 for the same family in Minneapolis.”
   • Indicator: Rental price growth relative to income growth.
     
     The article uses the divergence between rent increases (75%) and income growth for low-income families (40%) as a key indicator of unaffordability.
   • Indicator: Increase in housing supply.
     
     The article proposes “increasing the housing supply by 10 percent” as a direct action and measurable indicator for improving housing affordability.

4. Summary Table of SDGs, Targets, and Indicators

Source: cayimby.org