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Is $84,000 Enough for a Family of Four in San Francisco?

| July 16, 2013
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Families find it expensive to live in San Francisco. Photo: GoGap/Flickr

Families find it increasingly expensive to live in San Francisco. Photo: GoGap/Flickr

Last week, we wrote about a new budget calculator released by the Economic Policy Institute (EPI) that attempts to offer a contrast to the Federal Poverty Guidelines, which say a family of four is “officially” poor only if it earns less than $23,550.

What EPI hoped to do was illustrate that in plenty of places (the San Francisco Bay Area certainly being one of them), $23,550 isn’t even close to enough for that four-person family.

But, as many readers noted, the numbers that EPI comes up with might not be enough either.

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According to the calculator, a family of four needs to earn $84,133 to attain a “secure yet modest living standard” in San Francisco. The numbers are similar, but slightly lower, for San Jose-Sunnyvale at $79,261 and the Oakland-Fremont area at $75,064.

EPI’s budget calculator simply uses an algorithm based on housing, food, transportation, child care, health care and other necessities, as well as adding in taxes. Those rough numbers are calculated in each geographic area in order to provide varying benchmarks for different locations, based on the cost of living in those places.

The housing costs, for example, came from the Department of Housing and Urban Development’s (HUD) fair market rents, which represents the 40th percentile of housing prices in that region. That means that 60 percent of two-bedroom apartments in the San Francisco metro area are more expensive than the $1,795/month the EPI budget calculator used. In the Oakland-Fremont area, the HUD 40th percentile projected that a two-bedroom apartment would cost $1,361. These numbers are not averages, which would be slightly higher.

While the other costs are calculated from different guidelines and methodology – transportation costs are based on the average number of miles driven in that region,  according to the National Household Travel Survey and child-care costs came from the annual Child Care Aware of America report — it was the housing prices that raised the most questions.

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The Bay Area has one of the least affordable housing markets in the country, and rents vary drastically by neighborhood and region.

Certainly plenty of neighborhoods in San Francisco have few (or no) options for $1,795. But, some argued for the benefits of their lesser-known and cheaper neighborhoods, and others advocated for hidden gems outside the city.

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EPI’s board chairman, Richard L. Trumka, is the former president of the AFL-CIO. The board also includes presidents of the United Steelworkers of America, SEIU and the United Auto Workers, as well as a former labor secretary, a current Democratic congressman and a number of professors. The organization’s mission is “to broaden discussions about economic policy to include the needs of low- and middle-income workers,” according to its website.

The goal of the budget calculator isn’t to prescribe a set amount that a family can live on. EPI’s family budgets — compared with the federal poverty guidelines — aims to “offer a higher degree of geographic customization and provide a more accurate measure of economic security,” says its website.

Is the calculator perfect? No. But, does it help make clear that the poverty line of $23,550 isn’t enough in San Francisco? Absolutely.

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Category: Housing

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About the Author ()

Kelly O'Mara is a writer and reporter in the San Francisco Bay Area. She writes about food, health, sports, travel, business and California news. Her work has appeared on KQED, online for Outside Magazine and in Competitor Magazine, among others. Reach Kelly O'Mara at kdomara@KQED.org.
  • msb

    It depends on how you got to that $84 K salary. If just one of you had to get student loans for a graduate degree, then hells no.

    The one program that helped our family of 4 with that income level, was the BMR program run by the Mayors Office of Housing. We were one of the lucky, lucky few that were able to get an affordable 2 bedroom apartment after jumping through hoops for 9 months. The program is currently stalled but it should be expanded.

    Even with a reasonable housing cost, we are still unable to afford some basics because of student loans, food costs, and child care. Thankfully we have family that can help us out in a pinch. But we by no means live comfortably.

  • SFlocal

    How about you don’t have kids in San Francisco if you can’t afford the expense that goes along with that responsibility? You can always have kids, but maybe you will need to move to another part of the bay area.

    • og_cheeky

      People have been doing this for ages. But what about the people who can’t afford to move? What about the benefits of living in the city? Cities lose a lot when young families leave en masse. Schools close, population drops. It’s not that simple.

    • pcello

      So that means that the only people who should have kids should be those whose incomes are high? Wow what a wondefully diverse city that will make.

  • LowerHaighter

    again… I dispute your claims NPR. I make $34K a year. My S.O. makes roughly the same working for the S.S.A. We pay $2100 a month in Rent. (our cottage has two bedrooms, one bath and a nice tiny backyard, and one parking spot off the street) We have THREE children, a cat and a dog. We have cable, all the amenities, and one car. We have been living here in San Francisco COMFORTABLY for six years. My S.O. and I are both college graduates. We have bills. We have loans. We have expenses, not only for ourselves but for our children. My children go to school with families that make less than we do… they are all getting by, providing well for their families, and living here IN San Francisco. Very few of them make anywhere near $75000 a year.

    I challenge that the young people complaining that they can’t get by on only $75000 a year may not be spending their money as wisely as they might otherwise. If all of us working families are getting by and not having to leave the City…it seems crazy to me that single people with HIGHER incomes are having problems.

    • LowerHaighter

      …nor are we on any sort of public assistance. We both work full time and have our children enrolled in public schools in our neighborhood.

      • oaklander

        Interesting. Since your kids are school age now, do you think you would be able to survive on that income if one, two or three of them were in daycare? Sounds like you lucked out with your rental situation. Are you able to save for your future or for emergencies or a down payment on a house on your budget? Do either of you have help from your families?

      • http://www.kqed.org/ KQED Moderator

        Thanks for pointing out an alternative view. It’s good to have examples are people who are able to live comfortably in the city on reasonable incomes. These are actually “our claims” or NPR’s, though. They’re from the EPI calculator, which I just wanted to clarify.

  • RP

    I was wondering about this $84K figure for a family of four figure too. It seems wayyy too low. I am a single person and I could barely scratch by with a salary of $84K. The average one bedroom is $2,800. I got a bargain with a small one bedroom in SOMA for $2,100. Throw in a larger apartment, child care, food, and transport and no family of four could live in SF on $84,000.

    • Eric

      Just think how the people who handle your child care are living.

  • bayview’s not so bad

    As a single mom with no outside support, I am able to do pretty well in San Francisco on $48k a year. This covers rent, car/health/renters insurance, retirement savings, a mostly organic diet, and a full range of entertainment and extracurricular activities. We live in a “cozy” 2br inlaw apartment in Bayview, where we’ve lived for the last 2.5 years. Rent is $1250 per month, and if you don’t mind walking through somebody’s garage to get into your apartment, and having your living room and kitchen all be the same tiny room, it really doesn’t seem hard to find a place to live in the same price range. My daughter is getting a fantastic education at SF public school. Sure, we could have a bigger place in the suburbs, but trading space for proximity is well worth it. San Francisco isn’t the easiest place to live, but if you take the entire city into account, it doesn’t have to be as difficult as it’s often made out to be.

  • Catherine

    I would really like some more detail on what they consider “secure”. I could see that $84k could maybe work if you live outside of the city proper but I don’t see it including a lot of savings for future security (i.e., retirement savings, emergency fund savings, etc.). Right now i am part of a 2 person family: we live in a studio, carry no debt, own one old and paid off car, and are generally frugal, and our annual expenses are a little over $30k (if you exclude some extravagant vacations). If we added kids into the mix I expect we would need an extra $36k/yr just to cover the rise in rent and then need to pay for childcare, so if that $84k is pre-tax income, we have blown it before we even start feeding the hypothetical kidlets! If your kids are school age I can see it being more doable (as the childcare cost would go down a LOT) but it is still going to be pretty tight with little/no room for savings. How does that qualify as “secure”?

  • supppp

    I’m a student at UCBerkeley, and after tuition paid off (with amounts from state and federal grants, university scholarships and other outside scholarships) I have a $12,000 budget that I extend out for 10 months (I find jobs through out those months to make up for the other two months expenses). I room in a loft with two others, my share of the rent is $640, afterwards leaving me $560 which I sort out for small expenditures and food (I use public transportation). I don’t use my entire monthly budget, I tend to save some for future situations. I live to what I can afford and adapt to that momentarily. I grew up in a house of 5 in a low income suburb in East L.A. (we made around 27,000 a year) which taught me to budget and work with what you have as a child. Now I’m studying and working with the university in anthropological analysis and research of public and consumption relations, and something very unfortunate and socially realistic is that individuals tend to want to live comforts and privileges that they can’t afford, they feel too entitled to do so. Take a business, macro-economics , or financial management class. If I myself was earning 84k, that would be more than enough, you just have to reanalyze your expenses and degree of socio-economic stance. The world isn’t here to cater to our delicacies.

  • Maple Falls

    This should settle everything everyone has to say….and if you have low rent – it’s probably because of rent control or you got really, really lucky!!

    http://priceonomics.com/the-san-francisco-rent-explosion/

    • Sainte Apple

      Why is it luck if someone rented a place and decided they liked it and lived there for 10, 20 or 30 years? That seems like common sense and a good understanding of their financial situation.

      It seems to be the very opposite of luck as they dictated their own future within the bounds of their control.

  • HeartINsf

    Let me tell you the honest truth as a person who moved back to San Francisco after being away for 10 years. 75K a year and although I am not struggling I have become extremely budget conscious. I am really not “saving” any money because after taxes I have approximately $4000 to spend on Rent/Food/Phone/Electric/Gas/Parking(tickets too..greedy bastards)/Insurance etc. $4000 might seem like a lot of cash, and I am grateful for having the opportunity to make a great living, but at the end of the day I save only about 500 a month. That is certainly not enough in case something happens to me or save up to buy a house in my beloved city LET ALONE being able to afford a child.

    Anyone that has a Rent Controlled Apt. is one lucky person/family.

  • sfmomsalot

    I agree with many of these posters here. It seems that the bombardment of views from one part of the city seemed to chime in quickly. Some of us, especially in the less-desirable parts of the city (i.e Southeast quadrant, or even the Outer Sunset, Outer Richmond) have been able to live modestly in our old neighborhoods. My husband and I made a little less than $84K last year, with two children (one preschool age). We live simply, my children share a room and go to public schools. We have one vacation a year and live on a budget. Maybe we are not eating out at every food-truck event or checking out the newest wine and cheese bar or sitting club-level at the Giants game, but we have fun in the city and around the Bay. And best of all we are surrounded by the friends and family that we grew up with and new friends we’ve me along the way.

    So, living here on a modest budget hasn’t forced us to take in any type of assistance (actually, with that income we don’t come near to qualifying), we don’t even qualify for San Francisco’s working family credit. It’s all about perspective and what you are willing to live with and without to live in this part of the world.

    • Sainte Apple

      Ssshhh… Don’t let them know about the “other” parts of the city…

      Some people still don’t believe that Mission and Valencia meet.. Surely they run parallel all the way to LA or somewhere in Daly City.

  • Outer Sunset

    Last year, we made a little over 100K. My husband works anywhere from 40-80 hrs a week, and I stay home with a 5-yr-old and 1.5-yr-old. Our older daughter was in preschool last year (a very affordable one at 15 hours a week for $450 a month). We are able to comfortably cover rent, food, utilities, student loan re-payment, car payment, church contributions, insurance, etc. but we have to be very conservative about what we spend on clothing, toys, recreation and extracurricular lessons for our children, not to mention savings. We rent a 3-bedroom house in the Outer Sunset for $2250, but we are paying over $1000 less than current market value for our home (it is not rent controlled…we just lucked out with good landlords 3 years ago). Rent control laws do not apply to single family homes in SF, only multi-unit dwellings. San Francisco is a wonderful place to live, but it comes with a heavy price tag! The nice thing is there are many affordable and free things to do around the city and nearby, without having to be too creative, although there is plenty of room for that too! I have seen people make it on much less in the city (including ourselves at one point), but eventually they tend to migrate out as their families grow larger. It would take us years to save enough to buy a house in our same neighborhood, and even if we did, our mortgage would probably be double what we are currently paying in rent.

    • menez

      “we”