Our analysis of the demographics of low-income and very low income families in the region reveals the possibilities and limits of using income targetting to advance racial equity.
By Ángel Mendiola Ross and Sarah Treuhaft
Last month, we received a data request for the racial/ethnic composition of very low income and low-income families in the five-county Bay Area. These income classifications, as defined by the federal Department of Housing and Urban Development (HUD), are incredibly important in determining eligibility for affordable housing resources, such as housing vouchers, yet few outside of the housing field know what they represent. In this post, we explain these classifications and share insights from this data. To download and explore the raw data for the five-county region and each county within it, click here.
Nearly half of all five-county Bay Area residents are low income or very low income.
Income classifications are based on the Area Median Income (AMI), which is the income of the family in the exact middle of the income distribution (half above, and half below), with adjustments for family size. For the purposes of determining the AMI, the five-county Bay Area is divided into two different “Fair Market Rent” areas: Oakland-Fremont Metro (Alameda and Contra Costa Counties) and San Francisco Metro (Marin, San Francisco, and San Mateo Counties). In 2018, the median family income was roughly $108,000 in the Oakland-Fremont Metro and $121,000 in the San Francisco Metro for a family of four.
Very low-income families are defined as those with incomes that are less than 50 percent of the area median income, so for a family of four, that is less than $54,000 in Alameda and Contra Costa Counties and less than $60,600 in Marin, San Francisco, and San Mateo Counties. Using these thresholds, one in three Bay Area residents – 1,524,600 people – is very low income.
Low-income families are defined as those with incomes that are between 50 percent and 80 percent of the area median income. Again, using a family of four as our benchmark, this is between $54,000 and $86,300 in Alameda and Contra Costa Counties and between $60,600 and $97,000 in Marin, San Francisco, and San Mateo Counties. About 16 percent of Bay Area residents (716,800 people) are in this low-income category.
According to these income classifications, about half of all of residents in the region are very low income or low income. Most strikingly, 68 percent of Black residents and 72 percent of Latinos fall within these categories compared with just 35 percent of White residents.
Black and Latino residents are overrepresented among very low income and low-income families.
Due to discrimination, racism, and historic and current policies, racial gaps in income remain wide and persistent in the Bay Area despite the region's robust economic growth. Because of this income disparity, Black and Latino residents are overrepresented among the region’s very low income and low-income families. Black and Latino residents make up 46 percent of very-low income families but just 13 percent of high-income families. White residents, on the other hand, comprise just a quarter of very low-income families but 54 percent of high-income families, even though they make up 40 percent of the region’s overall population.
Looking at how residents of major racial/ethnic groups are spread across income categories, we find that the majority of the Black and Latino residents live in very low-income families, compared with just 21 percent of White residents. Forty-four percent of Native American and Alaska Native people are part of very low-income families.
The distribution of the Asian or Pacific Islander population underscores the socioeconomic heterogeneity that activists and scholars have documented for many years: while over a third (36 percent) of API residents in the Bay are in high-income families, nearly a third (31 percent) are part of families considered very low income.
Racial inequities in income are most pronounced at the lower and upper ends of the economic spectrum. Black, Latino, and Native people are more than twice as likely as Whites to be in very low-income families and half as likely to be in high-income families. More than two-thirds (68 percent) of Black residents are in families considered low or very low income as are nearly three-quarters (72 percent) of Latinos. Interestingly, the “low” and “mid” income categories show the greatest racial parity: The range across race/ethnic groups is just four percentage points for low-income families (14 percent of Whites and people of mixed/other races compared with 18 percent of Black and Latino residents) and seven percentage points among mid-income families.
The majority of Black and Latino residents are in very low-income families regionwide, but the share varies by up to 20 percentage points across counties.
Further exploring the data by county reveals how the racial/ethnic makeup of very low-income families fluctuate across each of the five counties. There is very little variation, for example, among the White population: 19 percent of White residents are in very low-income families in Marin and San Mateo Counties while 22 percent of Whites are in very low-income families in Alameda County. White people are also the least likely to be in very low-income families across all counties.
The share of Black residents in very low-income families, on the other hand, varies from 38 percent in San Mateo to 59 percent in San Francisco. Put differently, Black people in San Mateo County are 20 percentage points less likely to be in very low-income families compared with Black people just north in San Francisco. There are more Black families in San Francisco than in San Mateo, but the median Black family income is roughly $40,000 higher in San Mateo than in San Francisco.
San Francisco is also an outlier when it comes to the Asian or Pacific Islander population. If we exclude San Francisco, the share of API residents in very low-income families only ranges from 25 percent in Marin County to 28 percent in Alameda County. But in San Francisco, 42 percent of API residents live in very low-income families. Similar to the Black population, median API family incomes are roughly $40,000 higher in San Mateo than in San Francisco. Ancestry data from the Bay Area Equity Atlas show that Chinese Americans comprise the single largest API subgroup in San Francisco (though this is true across all counties except for Contra Costa, where Filipinos make up the largest API subgroup).
The majority of Latinos are in very low-income families across all of the five Bay Area counties. But in contrast to the Black and API populations, Latinos in San Francisco are the least likely to be in very low-income families: 53 percent of Latinos are in very low-income families in San Francisco compared with 60 percent of Latinos in Marin. The median Latino family income was actually lowest in Marin County compared to the four other counties, whereas the median Black and API family income was one of the highest in Marin.
Income-targetted policies can help advance racial equity in housing, but additional race-conscious and anti-discrimination policies are also necessary.
These data reveal the extent to which policies that are targeted based on income thresholds can – if well designed – serve to advance racial equity because families of color are disproportionately low income or very low income. It is important that racial equity is a consideration throughout an income-targeted policy, from the process to develop it to the outreach and implementation, to ensure that it effectively serves people of color. And it is also important to keep in mind that income-targeting is insufficient to address racial inequities in housing (and many other policy areas). Recent studies illustrate continued discrimination in the housing market, with Black renters shown fewer apartments and offered fewer concessions than their White counterparts and Black homebuyers shown half as many listings as White homebuyers as well as steered into racially-segregated neighborhoods.
 Note: These limits will not exactly match HUD's income limits, which are adjusted based on various factors (including national median income).
 It is important to note that the very low-income category we’ve examined here includes extremely low-income households, which are defined as having incomes at less than 30 percent of the area median income. These households have the greatest housing needs and have very few if any options in the private housing market.