As rents in California metros continue to skyrocket, one smaller coastal city not only outpaces the rest of the state — but also leads the nation in rental costs.

And that place, for the fourth year in a row, is Santa Cruz.

Since 2023, the greater Santa Cruz-Watsonville metro area has held the dubious honor of being the most expensive rental market in the U.S., according to data compiled by the National Low Income Housing Coalition. 

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The Washington, D.C.-based nonprofit, tasked with coming up with housing solutions and housing equity, was founded in 1974, and one of its main directives is to track housing costs by ZIP code and compile those statistics annually. 

 A small family packs up and moves out of Santa Cruz, Calif., on Aug. 6, 2022. 

The resulting report is entitled “Out of Reach.” Visitors to the organization’s website can enter their state or ZIP code and find out via an interactive map exactly how much a person has to make per hour to afford housing in their area while spending no more than 30% of their income. Known as the 30% rule, it’s how much financial advisers recommend spending on rent monthly. 

The report announces itself with the simple message: “How Much Do You Need to Earn to Afford a Modest Apartment in Your State?” In Santa Cruz County, on average, a worker needs to make $81.04 an hour to access modest housing. In some oceanfront communities like Capitola, that amount runs up to $83.85 per hour — nearly double the average hourly wage in California, which the Bureau of Labor Statistics sets at $42.29. It’s also nearly five times the amount that someone making minimum wage, which is $16.90 an hour in Santa Cruz County, can afford. 

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And while the San Francisco metro area has had some jaw dropping recent rental market news at a required $69.31 per hour in wages on average, it still comes in at almost $12 less than what someone needs to make to live in Santa Cruz.

Only weeks after a major storm lopped off the end of the Santa Cruz Wharf in Santa Cruz, Calif., the wharf reopened and welcomed eager visitors, shown on Jan. 11, 2025. 

In an email to SFGATE, Jenny Panetta, the executive director of the Housing Authority of the County of Santa Cruz, called the news that Santa Cruz County topped the coalition’s list as the least affordable rental market........

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