California has a severe shortage of affordable and available rental homes for extremely low-income (ELI) renters —a deficit of nearly 1 million units. According to a recent report, the Gap, from the National Low Income Housing Coalition, only 24 affordable homes are available for every 100 ELI renter households in the state. And according to the City of San Jose report, in 2023, in San Jose, only 4 affordable homes are available for every 100 ELI renter households, with 57,400 ELI renters and just 2,300 units serving ELI families.
NLIHC, The Gap: A Shortage of Affordable Homes, March 2025, and City of San Jose Council Study Session, 2023.
The Gap, a report released March 2025 by the National Low Income Housing Coalition reveals a growing shortage of affordable housing across the United States. There are 10.9 million extremely low-income (ELI) renter households in the U.S, those with incomes at 30% of their area’s median income or lower. Only 3.8 million rental homes are affordable and available. This leaves a national shortage of 7.1 million homes for the lowest-income renters. The private market does not build or maintain enough deeply affordable homes (below 60% Area Median Income). As a result, ELI renters are forced to lease more expensive units than they can afford.
According to the national report, nearly half of all U.S. renters are cost-burdened, meaning they spend more than 30% of their income on rent. Among ELI renters, 87% are cost-burdened, and 75% are severely cost-burdened—paying over half their income on housing. In California, over three-quarters (78%) of ELI renters are severely cost-burdened. When most of their income is spent on rent, these renters often have to cut back on healthy food, health care, transportation, and childcare. The report identifies that ELI renters are more likely than other renters to have characteristics that limit their work hours: they are more likely than all other renters to be seniors, have a disability, be enrolled in school, or be single-adult caregivers of children or individuals with a disability.
Across the U.S, Black, Latino, and Native households are more likely to be ELI renters than white households. Historical housing discrimination and income disparities continue to shape these outcomes today. According to the Gap report, approximately 18% of Black households, 17% of Native households, and 13% of Latino households are ELI renters, compared to just 6% of white households.
These households also experience higher rates of severe rent burden. In San José, data presented during the 2023 City Council Study Session (based on 2019 figures) revealed that 32% of Black households, 23% of Native households, and 27% of Latino households are severely cost-burdened, spending more than half their income on rent.
The shortage of affordable rental housing options is a national crisis. California has a severe shortage of affordable homes available for ELI renters, with a deficit of nearly 1 million units. There are only 24 affordable and available homes for every 100 ELI renter households in the state. Locally, in San Jose, only 4 affordable homes are available for every 100 ELI renter households, with 57,400 ELI renters and just 2,300 units serving ELI households.
The extreme shortage of deeply affordable rental homes pushes renters into overcrowded or substandard housing or leaves them at risk of eviction and homelessness. In San Jose, 44% of households (143,160) fall under less than 80% of area median income in the housing income categories.
The affordable housing crisis is national in scope but especially severe in California and the Bay Area, where the shortage of deeply affordable rental homes is most acute. This crisis is compounded by structural inequities that continue to disproportionately impact Black, Latino, and Native households, leaving many families one emergency away from housing instability or homelessness.
With a shortfall of millions of affordable and available homes, especially for ELI renters, it is clear that the private market alone cannot close the gap. Addressing this crisis requires coordinated action and commitment across all levels of government. We need to make more homes available to California residents, especially those with incomes that are extremely low.
The Gap recommends that government lead the charge in expanding resources for building and investing in housing affordable to those with limited incomes, increasing funding for rental subsidies, preserving and rehabilitating existing affordable units, encouraging local zoning reform to allow more housing—particularly in high-cost areas—and investing in emergency rental assistance to prevent evictions and homelessness. Without bold, sustained investment and policy change, the housing gap will only widen, leaving millions of families without a stable place to call home.