Endicott: Cost of living keeps going up in Sonoma County. Here is what’s ahead

It’s a familiar feeling, especially in California. Just when rent, utility bills and gas prices seem like they couldn’t climb any higher, they do.

Record Pacific Gas & Electric Co. rates kicked in at the start of the year, just as the utility giant requested regulators approve yet another increase. Customers of the state’s largest home insurer, State Farm, may see premiums rise by an average 20% as early as March.

Locally, many have felt the effects as they juggle dwindling affordable insurance options, never-before-seen energy bills and ever-spiking housing costs. Rents have skyrocketed in Sonoma and Napa counties since 2021, with the average rent for an apartment in Santa Rosa hovering well above $2,000 per month. Sonoma County food banks are struggling to meet continuous demand.

It’s pushed the most vulnerable to the edge and some out of town or out of state entirely, with costs in even previously more affordable California communities on the rise.

Since February 2020, we’ve seen a 19% increase in prices, according to Sarah Bohn, a labor economist with the Public Policy Institute of California. That’s almost triple the rate targeted by the Federal Reserve as sustainable.

“That's a huge increase, multiples of what we had experienced prior to the pandemic,” Bohn said. “That’s what’s adding stress on top of the already high cost of living in California.”

A long-term problem

According to a 2023 study by United Ways of California, a nonprofit that provides support resources through local chapters across the state, about one in three households, or 3.7 million Californians, don’t earn enough to meet basic needs. The group’s measure accounts for housing, food, child and health care, transportation and other necessary costs. Black and Latino communities, noncitizens, families with young children and single mothers in the state are particularly hard hit.

“Here we are in California, and if it was its own country, it would be the fifth largest economy in the world,” said Henry Gascon, director of program and policy development for United Ways of California. “What does it say about our society when one-third of our families are struggling in the state?”

By United Ways’ measure, residents in Sonoma, Napa, Lake, Mendocino and Marin counties fare a bit better than the state as a whole. But data from Sonoma County’s 2-1-1 service, a United Way of the Wine Country program that connects residents in need to support services, provides a window into the strains people are feeling.

In 2023, more than 15,273 callers sought help — with almost 30% looking for income assistance, 22% seeking housing aid, 10% searching for food and meals, and almost 7% asking for help with utilities. Fewer people, however, have reached out each year since the start of the pandemic.

Indeed, California has the highest functional poverty of any state, according to the U.S. Census Bureau data, a title the state has held for some time.

Looking at the long-term, it becomes apparent how Californians fall behind. Between 1984 and 2021, with adjustments for inflation, California’s gross domestic product, based on the value of goods and services, has increased by 173%, but median household earnings only grew by about 4%, according to an analysis by Gascon.

“One of the reasons why it's difficult to ask for families to keep saving is because they constantly can't,” Gascon said. It can be especially hard to stay ahead for those who work in seasonal industries where pay varies across the year, like agriculture, retail and tourism, common sectors in our region.

There has been a strong wage growth on average since the beginning of 2020 — about 15%, but with the 19% price increases in the same time frame, “that can actually feel like a pay cut,” said Bohn of the Public Policy Institute of California.

The burden has been increasingly unequal, too. In the past 40 years, top incomes have grown 60% while bottom incomes have only increased by about 10%. For earners on the lower end, there’s a compounding effect when costs spike like they have recently, since they already put a disproportionate amount toward the basic needs that are surging in price.

The path ahead

Weathering the lingering impacts of the pandemic and the ensuing economic turbulence requires a delicate balance between business and resident needs, Sonoma State University economics professor Robert Eyler said.

“The critical factor is keeping inflation tame enough to where wages are not so dramatically changing that it throws a lot of uncertainty for businesses,” he said, “but at the same time compensates people enough to stick around in the local area.”

The good news is inflation has been coming back to earth nationally and in California, and the cost of living climb is expected to keep slowing this year and next. The state’s uniquely high cost of living is driven primarily by housing prices, and those are forecast to drop by between 4 and 7%.

Any long-term solutions to provide relief, however, will hinge on cracking the housing supply and affordability problem and, locally, whether officials are matching housing choices to the needs of communities, experts told me.

“If you're trying to attack the cost of living by providing more housing, that's great,” Eyler said. “But what does it mean seven to 10 years from now in terms of the types of businesses and the types of workers who can afford to work and live in those spaces.”

“In Your Corner” is a column that puts watchdog reporting to work for the community. If you have a concern, a tip, or a hunch, you can reach “In Your Corner” Columnist Marisa Endicott at 707-521-5470 or marisa.endicott@pressdemocrat.com. On X (formerly Twitter) @InYourCornerTPD and Facebook @InYourCornerTPD.