The unaffordability of trying to just make a living in the State of California has increasingly become an unpleasant fact of life for all but the richest Californians.

But the key drivers of this unaffordability appears to have eluded most public officials and public policy analysts, particularly those on the left.

Yet to the seasoned analyst, the evidence appears to be hiding in plain sight, to quote the words of one California Congressman who is rapidly becoming known for his penchant for investigating political opponents.

California’s highest in the nation tax burden is a significant part of this unaffordability, but not the only significant part of the story.

The real culprit is the high prices that Californians pay for goods and services (i.e. cost of living), particularly “rents,” of which the state’s high tax burden is a significant driver but not the only one.

Sacramento-based advocacy groups, such as the California Budget & Policy Center, have produced some good materials which shed some light on this “cost of living” issue, but stop short of providing a coherent theory on the causes or how to bring down the cost of living in California.

To illustrate, the California Budget and Policy Center has produced materials which advocate for using the “supplemental poverty measure” to assess the impoverishment of California families because this threshold is based on current spending on basic needs which, most notably, takes into account the “cost of living” in different areas of the country.

Based on U.S. Census Bureau data, the use of the supplemental poverty rate suggests that 19% of California households were living in poverty in 2017 (highest in the nation), compared to the official federal poverty rate of 13.4%, according to a California Budget and Policy Center report.

But these poverty rates are significantly higher in specific areas of the state such as Los Angeles (25%), San Francisco (21%), Santa Cruz (25%), and Santa Barbara (25%), according to budget center materials based on 2013-15 data.

The budget center illustrates the state’s high cost of living by outlining a basic monthly budget for a two-working parent family with two children.  For 2017 in San Francisco County, this hypothetical family’s cost of living is estimated to be $9,249 per month or $110,984 annually.

This estimated cost of living significantly exceeds both the official federal poverty threshold of $24,858, and $37,052 for the supplemental poverty threshold for a two-adult, two-child family that rents, according to 2017 U.S. Census data analyzed by the budget center.

Perhaps what is most instructive is the basket of goods and services that a hypothetical family needs to be able to pay for each month just to survive.

For this four-person family the monthly cost breakdown is estimated as follows: housing and utilities $3,018 (32.6% of monthly total), food $773 (8.3%), child care $1,874 (20.3%), employer-based health care $638 (7%), transportation $624 (6.7%), miscellaneous $787 (8.5%), and taxes $1,535 (16.6%).

It is understood that these costs vary by family and geographic location, but this example is very instructive because it shows the various cost categories, and their estimated magnitude, for a hypothetical four-person family in one of the high cost areas of the state.

What catches my eye is the amount paid for rent and utilities (32.6% of total) and taxes (16.6% of total) because these two categories alone compose almost 50% of the family’s total monthly costs.

But the other categories food (8.3%), child care (20.3%), health care (7%), and transportation (6.7%) all add up to be very significant as well—a total of 42% or virtually the entire other half of the family’s expenses.

I would argue that the fundamental ideological difference in California politics today is really about how to address this affordability crisis—most California Democrats largely believe that government is the solution, while most California Republicans believe that government is in fact the problem, not the solution.

In short, I do not see a workable path forward that utilizes only “progressive” policy solutions, on the contrary, the underlying causes of these high prices are primarily related to the previous enactment of a long-list of “progressive” government policies, many of which, go back decades.

Specifically, the state’s minimum wage, layers and layers of housing fees and regulations, highest in the nation gas taxes, the state’s pension crisis and escalating cost of government, the state’s “cap and trade” program and climate change decrees—these are just some of the notable “progressive” policies that have significantly driven up the cost of living in California beyond what many families can afford.

And that is why the state’s poverty rates continue to climb, homelessness is out of control, and people as well as businesses are leaving the state in droves in search of a more affordable cost of living and/or lower cost of doing business.

Government policies are not the only cause of this “affordability crisis,” but I would argue they are the primary cause and one of the few things in this equation that could be changed to reverse these startling trends that have now reached crisis proportions.

Recent figures released by the U.S. Bureau of Economic Analysis (BEA) confirm these price parities between California and the rest of nation, and also indicate that we are not the only state with a cost of living issue statewide or regionally.

For 2016, for a typical basket of goods, the prices paid by Californians were 14.4% higher than the national average, which ranked the state 4th highest in prices paid above the national average below only Hawaii (18.4% higher), the District of Columbia (15.6% higher), and New York (15.6% higher), according to the U.S. Bureau of Economic Analysis.  (Note: These “regional price parities” (RPP) are essentially price indexes that measure geographic price level differences for one period in time (i.e. 2016 in this case) in the United States.  For more information there is a full methodology and documentation on the BEA website.)

The real story is told at the local and regional level which places the prices of many California metro areas far above comparable metro areas in Nevada, Arizona, New Mexico, Texas, and Florida—the often cited destination for the migrations of California individuals and businesses.

For the “Los Angeles—Long Beach—Anaheim” metro area, the regional price disparity for all items is 17% higher than the national average, but 65% higher for “rents,” according to 2016 BEA data.

For the “San Francisco—Oakland—Hayward” metro area the regional price disparity for all items is 24.7% higher than the national average, and 91% higher for “rents.”

Even more rural areas, largely farming communities, are hugely overpriced.  For the “Santa Cruz—Watsonville” metro area, the regional price disparity for all items is 25%, and 77.6% higher for “rents.”

For the “Santa Maria—Santa Barbara” central coast metro area, the regional price disparity for all items is 9.5% higher, and 67.5% higher for “rents.”

What really stands out from this data is how much dramatically higher the “rents” are for most California regional economic areas, than the national average.  This even applies to places in the central valley and central coast where land is plentiful but not permitted to be developed: Stockton-Lodi (5% higher), Vallejo—Fairfield (38% higher), Salinas (52% higher), and Riverside—San Bernardino (17.6% higher).

When you compare these figures with similar figures for metro areas in Nevada, Texas, Arizona, New Mexico and Florida—it makes sense why many are fleeing California’s increasingly high-priced local economies.

From an economic perspective, the impact of these higher prices for rent, housing, and commercial services and production cannot be understated.

This federal data indicates that most Californians are paying dramatically higher prices than they should be for rent, housing, and the price of many essential products and services.

For the wealthy and established businesses, the state’s high prices many only be an inconvenience or simply a cost of doing business, but to the poor, middle-class, and small business—the state’s increasing unaffordability is catastrophic.

In the world of today’s politics, walls may not work, emergencies can be 100% manufactured, and evidence can hide in plain sight, but there is no denying that California has a deepening “affordability crisis” that is likely to get a lot worse before it gets any better.