The Housing Crisis in Santa Cruz: A Growing Challenge
Santa Cruz, California, has once again been named the most unaffordable rental market in the United States for the third consecutive year. To afford a modest two-bedroom apartment in the area, residents must earn over $168,000 annually, according to the National Low-Income Housing Coalition’s 2025 Out of Reach report. This staggering figure highlights the severe housing affordability crisis facing the region.
The cost of renting has increased significantly in recent years. In 2023, the hourly wage needed to afford a two-bedroom home was $63.33, but by 2025, it had risen to $81.21. That represents an almost 30% increase in just two years. For a full-time worker, this means that the average renter would need to work nearly four and a half full-time jobs to cover housing costs.
In California, where the minimum wage is $16.50 per hour, the challenge is even more daunting. The typical renter in Santa Cruz County earns $22.13 an hour, which still falls far short of what is needed to afford a two-bedroom apartment. At that rate, it would take approximately 3.7 full-time jobs to make ends meet.
Elaine Johnson, executive director of Housing Santa Cruz County, emphasized the urgency of the situation. “This is a No. 1 we don’t want to be,” she said. “This is an all-hands-on-deck kind of time for everyone involved.”
California continues to dominate the affordability rankings, with eight of the ten most expensive metro areas in the nation. These include San Jose, San Francisco, Salinas, and Santa Barbara. Statewide, the average housing wage for a two-bedroom apartment is nearly $50 per hour, the highest in the country.
For a full-time minimum-wage worker in California, affording a modest two-bedroom apartment is nearly impossible. According to the report, such a worker would need to work 120 hours a week to cover housing costs. This is not feasible, and the report states that no state, metropolitan area, or county in the U.S. can afford a modest two-bedroom rental home with a full-time minimum-wage job.
Causes of the Housing Shortage
The report attributes the crisis to a severe shortage of affordable rental homes. It estimates a national gap of 7.1 million affordable rental homes for extremely low-income households. In California, the problem is exacerbated by restrictive policies and regulations.
Critics argue that California’s housing market is hindered by overlapping layers of regulation. The California Environmental Quality Act (CEQA) and restrictive zoning laws are seen as major contributors to the housing shortage. Dr. Wayne Winegarden, senior fellow at the Pacific Research Institute, pointed to these factors as key issues. “Prevailing wage mandates coupled with expensive environmental mandates… further inflates housing costs,” he said.
Mike Lelieur, chair of the Santa Cruz County Republican Party, also criticized the housing policies in the region. He described the local planning department as making it too expensive to build new housing. “It’s just not profitable unless you’re backed by a big corporate developer,” he said. “Then you add CEQA, coastal commission reviews, endless permit delays, and greenbelt restrictions. It’s a bureaucratic blockade by design.”
Lelieur also criticized the University of California, Santa Cruz, for expanding its student population faster than it builds housing. “UCSC keeps expanding, but they’re not building dorms fast enough. So students flood the local market and landlords jack up rents — because mom and dad are paying the bill,” he said.
Looking Ahead
The housing crisis in Santa Cruz and across California is a complex issue with no easy solutions. As the cost of living continues to rise, policymakers, developers, and community leaders must work together to address the root causes of the problem. Without significant changes, the situation is likely to worsen, leaving many residents struggling to afford basic necessities like housing.
