California has the nation’s second-highest rate of housing-driven poverty, new study finds

California’s housing crisis is a major contributor to poverty across the state, new research shows.

High housing costs account for 30% of all poverty in California and 36% of childhood poverty, according to an analysis by the Pew Research Center.

That gives California the nation’s second-highest rate of housing-driven poverty, behind Hawaii, where housing costs account for 34% of overall poverty and 42% of childhood poverty.

Americans spend a significant share of their income on housing.

Half of all renters spend at least 30% of their income on rent, according to a 2025 Harvard study.

California’s median gross rent stands at $2,104, per to a July report from Investopedia, making it the third-most expensive state in the country.

The new analysis is based on research conducted by Zachary Parolin, a professor at the University of Oxford in England.

Along with Hawaii and California, Parolin looked at Washington, DC, New Jersey, Massachusetts, Colorado, Maryland, Connecticut, New York and New Hampshire — the 10 states and district where housing costs accounted for the largest share of poverty.

In his research, Parolin calculated how much poverty could be reduced if rents fell in the states he studied.

In California, he found that a 20% decline in rent would reduce the state’s overall poverty rate by 21% and child poverty by 26%.

That would effectively give residents an additional $5,061 in annual income, according to Parolin.

Across all 10 states examined, poverty rates would fall by at least 18% if rents declined.

Parolin found that the impact would be comparable to the 2021 expansion of the child tax credit, which increased the credit to $3,600 per child under age 6 and $3,000 for children ages 6 and older.

The study also found that policies such as restrictive land-use regulations, building codes and parking mandates can drive up housing costs by making it more difficult to build new homes and increasing prices for existing housing.

Policies that have updated zoning codes and permitting processes cities such as Austin, Minneapolis, Houston, Raleigh, North Carolina and New Rochelle, NY, have caused affordability to improve, according to Parolin.

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