Who is Low Income and Very Low Income in the Bay Area? (An Updated Look)

January 27, 2023

Analyzing income levels for family households across the nine-county region reveals that 3.5 million Bay Area residents — nearly one-half of the area’s total population — are either very low income or low income.

By Ryan Fukumori and Simone Robbennolt

In September 2020, we published a breakdown of low-income and very low-income residents in the five-county Bay Area by race and ethnicity, in which we examined differences in the racial/ethnic makeup of lower income and higher income brackets. This follow-up analysis updates our original research with income data from the 2016-2020 5-year American Community Survey, and it expands our scope to the full nine-county region (Napa, Santa Clara, Solano, and Sonoma Counties, in addition to Alameda, Contra Costa, Marin, San Francisco, and San Mateo Counties).

Our key findings include:

  • Nearly half (46 percent) of all Bay Area residents who live in families are low income or very low income. One in six (17 percent) of the region’s residents was low income, and nearly twice as many residents (29 percent) were very low income.

  • Compared to the other Bay Area counties, San Francisco has a markedly higher rate of low-income residents. More than half of the county’s residents who live in families were either low income (18 percent) or very low income (36 percent).

  • Black and Latinx residents make up a disproportionate amount of the very low-income residents in the nine-county Bay Area.

  • All racial groups have income distributions concentrated at the extremes. White and Asian American or Pacific Islander (AAPI) residents have larger proportions of very low-income and high-income residents compared to low- and moderate-income ones.

  • The rate of Black, Latinx, and AAPI residents with very low incomes varies widely across the nine Bay Area counties. The rate of very low-income white residents is relatively consistent across the region.

What do we mean by “low income”?

This analysis uses income bracket classifications as defined by the US Department of Housing and Urban Development (HUD). Municipalities across the country use HUD income definitions to determine residents’ eligibility for affordable housing resources, like housing vouchers. However, the federal definitions for “low income” and “very low income” are not common public knowledge.

HUD standards will measure a family’s income level by taking their income as a percentage of the area median income (AMI), or the median income for all households within a given metropolitan area. Low-income families have a household income between 50 percent and 80 percent of the AMI, and very low-income families have an income of less than 50 percent of the AMI.

As with federal poverty levels, AMI varies by household size. AMIs also vary by each metropolitan area, whereas federal poverty levels are uniform nationwide (except for Hawai’i and Alaska). Using area median income is important to capture the disparities in the cost of living between different parts of the country. Because the cost of living in the Bay Area is relatively high, a family could be well above the federal poverty level but still struggle financially. For instance, the income threshold for a four-person very low-income family in San Francisco was over three times the federal poverty threshold for a family of the same size in 2022. Thus, HUD income brackets help to capture financial disparities in a given region that federal poverty rates cannot demonstrate on their own.

This analysis focuses on residents of the nine-county Bay Area living in families — households with more than one person related by blood or partnership. In turn, the study omits one-person households, households with unrelated residents (e.g., roommates), and people living in group quarters (e.g., dormitories, nursing homes, military bases, or carceral facilities). Nonfamily residents are subject to a much wider variety of occupational situations, and their inclusion may skew our breakdown of the Bay Area population by income. Keeping our analysis to families, therefore, helps to standardize our findings across counties and racial groups.

In this report, when we refer to area median income or AMI, we specifically mean the area median income for family households alone, also known as the median family income (MFI). This report uses AMI and MFI interchangeably.

3.5 million — nearly half — of all residents in the nine-county Bay Area are either low income or very low income

The nine Bay Area counties fall into six different areas for which HUD determines area median income, as shown in the table below.

Area median incomes vary between counties. Across the region, there is nearly a $40,000 difference between the smallest and largest cutoff points for a low-income (80 percent of AMI), four-person household: $76,320 in Solano County versus $114,480 in Marin, San Francisco, and San Mateo Counties. The northernmost counties (Napa, Solano, and Sonoma) have the lowest area median incomes, whereas Marin County, San Francisco, and the South Bay (San Mateo and Santa Clara Counties) have low-income thresholds over $110,000. The East Bay (Alameda and Contra Costa Counties) sit in the middle of the range, with a low-income threshold of $95,360 for four-person families.

While the parameters for low- and very low-income status vary across counties, nearly 3.5 million people in 2020 were living in low- or very low-income families across the Bay Area, or 46 percent of all people in families. One in six (17 percent) of the region’s residents was low income, and nearly twice as many residents (29 percent) were very low income.

The proportion of low- and very low-income family members within each county is generally in line with the region-wide rate. Notably, the four counties with the highest area median incomes occupied the extremes. Marin, San Mateo, and Santa Clara Counties had the lowest overall rates, each with 44 percent of people in families who were either low-income or very low-income, slightly lower than the region-wide figure of 46 percent. The one outlier was San Francisco County, where over half of all residents in families were either low income (18 percent) or very low income (36 percent).

San Francisco’s outlier status is likely due to many factors. Still, it has been historically consistent: San Francisco has had the highest poverty rate among Bay Area counties since the Census Bureau began tracking poverty figures in 1970. Notably, San Francisco is also an outlier in terms of the proportion of residents who live in families. While 81 percent of all Bay Area residents lived in families in 2020, that figure was only 64 percent in San Francisco.1 The dot-com and tech booms have spurred an influx of nonfamily workers, leading to a decline in the rate of family households over decades amidst spiraling housing costs.

Black and Latinx residents made up a disproportionate amount of the region’s very low-income residents

While low-income and very low-income rates remain relatively consistent across all counties besides San Francisco, there are region-wide racial disparities in the proportion of low-income and very low-income family members. Looking at the racial makeup of each respective income bracket demonstrates the uneven distribution of incomes across racial groups. White and Asian American or Pacific Islander residents in families make up an increasingly larger fraction of people as incomes rise, and Black and Latinx residents comprise an increasingly smaller portion. Black and Latinx residents comprise one-third of all very low-income families, but only one-eight of high-income families. Black and Latinx residents make up about one-quarter of all families regardless of income, which indicates just how underrepresented they are amongst high-income families.

Breaking down the income levels with each racial/ethnic group reveals that very low-income residents made up a majority of Black and Latinx people living in families, at 57 percent and 53 percent respectively. These figures were substantially higher than the 34 percent of white and Asian American or Pacific Islander residents living in families who were very low-income, and the 40 percent of residents who were multiracial or a non-listed race/ethnicity (henceforth abbreviated as “mixed/other”).

All racial groups experienced polarizations of incomes at the extremes

As the graph above shows, the percent of low-income and medium-income (between 80 percent and 120 percent of AMI) residents remained relatively low across all racial groups. Roughly equal proportions of white and AAPI family household members in the region were classified as very low income or high income, with about one-third of each racial group occupying each end of the income spectrum. By contrast, Black and Latinx Bay Area residents experienced a pyramidal distribution of income, representing an even greater proportion of low-income residents and a low share of high-wage earners.

Breaking down family households into these income quadrants helps to illustrate why median income data alone is not sufficient in areas with such acute income polarization, because fewer people have incomes near the midpoint. Looking at data on very low-income rates reveals that while half of Bay Area residents have family incomes below the median, a very large proportion of that one-half lives substantially below the median.

The rate of Black, Latinx, and Asian American or Pacific Islander residents who are very low income varies widely across Bay Area counties

While region-wide trends indicate that Black and Latinx residents make up a larger share of very low-income residents compared to white and AAPI residents, these rates also vary across the nine-county region for people of color. In 2020 the percentage of white residents who were very low income remained both relatively low compared to other groups, and relatively consistent across all nine counties. Only six percentage points separate the county with the highest rate of white residents who are very low income (San Francisco, at 28 percent) and the lowest rate (Contra Costa, 22 percent).

By contrast, there is larger variation by county for people of color:

  • 19 percent of Black residents are very low income in Napa compared to 64 percent in San Francisco — a 45 percentage point difference;

  • 53 percent of Latinx residents are very low income in Marin County compared to 33 percent in Solano — a 20 percentage point difference; and 

  • 17 percent of AAPI residents are very low income in Napa County compared to 36 percent in San Francisco — a 19 percentage point gap.

There was not enough income data for Native American family households to produce data for all nine counties.

While San Francisco County had the highest overall proportion of very low-income residents in families, San Francisco did not have the highest rate of very low-income residents for Latinx families (Marin was the highest, at 53 percent) or multiracial and “other” residents (Sonoma, at 28 percent). However, across racial groups, the northern counties (Napa, Solano, and Sonoma) generally had lower rates of very low-income residents compared to the other five counties.

These variations remind us that the Bay Area is as economically and ecologically diverse as it is multiracial and multicultural. The region is home to the epicenter of the nation’s tech economy, as well as some of the most famous horticultural areas in the US. While trends like the overrepresentation of Black and Latinx residents among low-income families persist across counties, the local contexts and distinctions within each county should also shape our understanding of racial equity across the region.

Race-conscious, equitable policies are necessary to address the crisis of income polarization in the Bay Area

While the distribution of incomes for each racial group varies somewhat across the Bay Area, it is nonetheless clear that Black and Latinx residents throughout the nine-county region continue to bear an outsized part of the burden that very low-income families must carry. Moreover, the distribution of income is not uniform for any racial group in the Bay Area, with each group seeing the concentration of incomes at the high and/or low ends of the spectrum. This income polarization within 2020 data is all the more alarming given the so-called “K-shaped recovery” from the Covid-19 pandemic, in which high-wage earners have largely rebounded in their economic fortunes since 2020 while working-class households have not.

As these trends from 2020 show, mitigating the rising tide of income polarization requires a racial equity approach that addresses the needs of the specific communities — both ethnic and geographic — with the highest rates of low-income residents. For instance, it is likely that the polarization of Asian American or Pacific Islander family incomes reflects the class divides across AAPI communities in the Bay Area, with some ethnic groups significantly represented in high-earning professions and others (like Vietnamese Americans and Pacific Islanders) being more concentrated in working-class sectors. Disaggregated analyses are thus crucial to understanding the intricacies of income disparity in a region as racially heterogeneous as the Bay Area.

Ultimately, there is no understanding of income inequality in the Bay Area (or anywhere in the US) without accounting for the role of structural racism in the long-term formation of class divides across communities. As such, a targeted approach to income and housing justice requires explicit attention to these existing disparities across racial groups.

2016-2020 American Community Survey data via Social Explorer