The Government Now Considers You Low Income If You Make Less Than $70,000 In Los Angeles County

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It’s no secret that the cost of living is skyrocketing around the country. 

In a recent and startling revelation, the government has updated the threshold for being considered low-income in Los Angeles County to those earning less than $70,000 per year.

The data comes from the California Department of Housing and Community Development, which just released new income limits earlier this month

The California Department of Housing and Community Development found that the median income in Los Angeles County is $98,200 for a three person household. A moderate income in Los Angeles for a three person household is $117,850, according to the report. A single-person household earning less than $70,000 a year now qualifies as low income in the county – officially the most populous county in the United States with 9.8 million people.

This new figure, although seemingly hefty for most parts of the country, is an apt illustration of the escalating cost of living that has increasingly become the hallmark of residing in California, particularly its glitzy urban areas.

Another recent study by SmartAsset recently found that a $100,000 salary in Los Angeles only has the purchasing power of around $45,000.

Why is California so costly, one might ask? There are many factors that contribute to this reality. Chief among them is the undeniable allure of the Golden State. California boasts a diverse landscape with sparkling beaches, sprawling metropolises, and lush wine countries that attract millions from around the globe. The resultant demand surge for housing, in turn, pushes property prices sky-high, making home ownership a distant dream for many.

The 2023 Charles Schwab Modern Wealth Survey found that you need a net worth of $4.7 million in San Francisco to feel wealthy. In Southern California, including Los Angeles and Orange County, you need a net worth of $3.5 million. 

In Orange County, home of Disneyland, the median income is now $127,800, according to the new report. Individuals earning less than $80,400 are now considered low income.

The California Department of Housing and Community Development report found higher thresholds in other California metro areas. For example, single-person households in the Bay Area counties of San Francisco County, Marin County and San Mateo County who make less than $104,000 a year are now considered low-income.

Other popular California counties where $70,000 is considered low income include Monteray County and Sonoma County. Counties where low income threshold veers above $70,000 include Contra Costa County ($78,550), Napa County ($74,700), San Diego County ($77,200), Santa Barbara County ($82,950), Santa Clara County ($96,000), Santa Cruz Country ($92,500), and Ventura County ($74,400). 

Beyond real estate, California also faces distinct economic circumstances. Its status as the world’s fifth largest economy brings with it a high concentration of lucrative industries like tech, entertainment, and tourism. This, coupled with robust environmental and labor regulations, can cause a ripple effect that drives up the price of goods and services.

Additionally, the state’s extensive public services and infrastructure require hefty funding. Consequently, Californians often face higher taxes than residents of many other states, further inflating the cost of living. In this context, it becomes clearer why a $70,000 income in Los Angeles County might not stretch as far as one might think.

B. Carlisle

Contributing editor at Wealth Gang. An entrepreneur at heart, he's passionate about meaningful ways to leverage technology and social media for business opportunities and side hustles.