Top 20 Most Expensive Cities To Live In California
In this article, we will be taking a look at the Top 20 Most Expensive Cities To Live In California. If You are not interested in the detailed analysis of the expensive cities, head straight to the Top 5 Most Expensive Cities To Live In California.
California is renowned for its stunning landscapes, diverse culture, and vibrant cities, but it's no secret that living in the Golden State often comes with a hefty price tag. As the epicenter of innovation and entertainment, California comprises some of the most expensive cities like San Fransisco, Los Altos, and Glendale, among others. From the sun-soaked streets of Los Angeles, one of the most expensive cities to live in the US to the tech-savvy enclaves of Silicon Valley, this West Coast paradise offers a unique blend of opportunities and challenges for those seeking to reside within its borders.
Navigating California's Costly Business Environment
Companies have been considering various strategies to address these challenges. These include cost-cutting measures to reduce expenses without compromising quality or efficiency, contemplating relocation to more business-friendly states (though not feasible for all), and implementing tax-saving strategies.
The cost of living exceeds the national average in Cali. The state has a corporate tax rate of 8.84%. Median home values in California are more than double the national median.
However, California's minimum wage is $15.50 per hour, significantly higher than the federal minimum wage of $7.25. It's adjusted annually for inflation but can't be lowered, with a maximum yearly increase of 3.5%.
Pressures on Silicon Valley
Many businesses in the Silicon Valley, renowned as the global hub of technology and innovation, face challenges related to high taxes and rising business costs. Some companies have relocated their headquarters or expanded operations to states with more favorable economic conditions. For instance, Hewlett Packard Enterprise Company (NYSE:HPE) moved its headquarters from San Jose, California, to Houston, Texas, in 2022 to reduce costs. Others are strategically expanding beyond Silicon Valley to access more affordable options.
High taxes are a significant concern for Cali businesses, leading some to lobby for tax breaks and incentives. Despite these challenges, California's tech industry remains dominant, leading the nation in tech enterprises and IPOs. The state boasts 56% of the nation's private companies valued at over $1 billion. Silicon Valley continues to attract significant investments. As reported by Washington Post, the region secured $74.9 billion in 2022 across 3,206 deals, outpacing New York by a substantial margin in funding and contracts.
Is Texas the New Favorite?
Owing to the high cost of living, expensive housing, high corporate taxes and business regulations, both individuals and corporations are on the move, out of California, to mainly Texas. According to the American Community Survey of 2021, the number of people moving from California to Texas rose by 36% from 2016 to 2021.
Prominent companies like Oracle Corporation (NYSE:ORCL), Hewlett-Packard Enterprise Company (NYSE:HPE), and The Charles Schwab Corporation (NYSE:SCHW) have garnered attention for their relocations from California to Texas. The common reasons cited include California's high taxes and stringent regulations. In 2020, Oracle Corporation (NYSE:ORCL) moved its corporate base from Redwood City, California, to Austin, Texas, with co-founder Larry Ellison emphasizing the lower cost of living and a business-friendly environment as key drivers.
Hewlett Packard Enterprise Company (NYSE:HPE) followed suit in 2019, shifting its headquarters from San Jose, California, to Spring, Texas, with CEO Antonio Neri citing Texas' advantages, such as a lower cost of living, reduced taxes, and a central location. Hewlett Packard Enterprise Company (NYSE:HPE)'s move to Texas is also symbolic in many ways since it was one of the first companies comprising Silicon Valley.
The story doesn't just end with tech companies. California has also lost a number of financial firms to Texas that managed close to $1 trillion in assets in the past three years.
However, California remains the global leader in the high-tech industry, boasting a tech workforce of 1.88 million, the largest in the U.S. Tech jobs make up 7.7% of the state's workforce, with a median tech wage of $119,568, significantly higher than the average wage, according to CompTIA. The tech sector contributes $536 billion to the state's economy, making up 16.7% of it, and California's tech output surpasses the combined total of $520 billion for the next four states, solidifying its status as the premier hub for high-tech, thanks to its highly skilled workforce.
Chintla/Shutterstock.com
Our Methodology
For our methodology, we have ranked the most expensive cities to live in California based on the weighted-average of the cost of living indexes, with a weight of 0.6 assigned to housing expenses and 0.4 to other expenses. For the Indexes, we relied on Best Places and Rent Cafe, among others. We then ranked the cities on scores on a scale of 1-20, with higher score corresponding to higher cost of living. With that, let's begin the list!
Here are the top 20 most expensive cities to live in California.
20. Salinas
IM Score: 1
Salinas, California, is relatively affordable than other cities on the list. However, housing affordability remains a challenge due to lower median incomes. The city supports businesses, including small ones, and moved closer to funding Smoky Hill River Renewal with a $22.1 million grant from the U.S. Department of Transportation in 2022., focusing on environmental impact and neighborhood revitalization.
19. Los Altos
IM Score: 2
Los Altos is an exceedingly expensive city, ranking among the top most expensive cities worldwide. The market is highly competitive, with homes often selling in 16 days. Rent averages $3,600 monthly, while the median household income is $250,000. The city has a population of over 30,000 residents and is renowned for its high-end homes, top-quality schools, and proximity to Silicon Valley.
18. Walnut Creek
IM Score: 5
Walnut Creek, in California's Contra Costa County, part of the San Francisco Bay Area, is known for its high cost of living. The city's median home value is $793,100, well above the national median of $505,000, driven by its strategic location as a commuter hub for Sacramento, San Jose, and San Francisco. The city has a median household income of $121,205, exceeding the national median of $75,235. The elevated cost of living is due to pricey housing and proximity to major Bay Area cities.
17. Oakland
IM Score: 10
Oakland's cost of living is significantly higher, making it one of the most expensive cities to live in California. Housing in Oakland is costly, the median home price is $840,000, and the housing market is fiercely competitive, often seeing homes sold within seven days after receiving multiple offers. With a population exceeding 400,000, Oakland is celebrated for its diverse culture, thriving arts scene, and proximity to San Francisco.
16. Los Angeles
IM Score: 12
Los Angeles is one of the most expensive U.S. cities, driven by high housing costs, with median home price at $916,727 and one-bedroom apartment renting at around $2,742 per month, significantly above the national average. The city's diverse economy, encompassing entertainment, shipping, manufacturing, and startups, contributes to its high living expenses. However, Los Angeles grapples with water shortages, traffic, earthquakes, homelessness, and elevated crime rates.
15. San Diego
IM Score: 3
San Diego, known as "America's Finest City," offers an exceptional quality of life but comes at a price. According to NBC, housing costs are a significant factor, with a median home price of nearly $1 million, and 1 in 3 San Diegans spending half their income on rent.
14. Glendale
IM Score: 4
Glendale, in southeastern Los Angeles County, California, is pricey due to costly housing, with a median house value of around $1.2 million. The overall cost of living, including transportation, healthcare, and daily expenses like groceries and utilities, surpasses national average by a significant margin. However, Glendale offers a high quality of life with its natural beauty and access to amenities such as shopping malls, dining, parks, and excellent schools.
13. Irvine
IM Score: 6
Irvine is one of the most expensive cities in California with the cost of living nearly 80% higher than the U.S. average, mainly due to high housing and utility costs. Affordability can only be challenging with a high-paying job. The city's robust economy offers diverse job opportunities and attracts top talent globally, with large employers like Taylor Morrison, Edwards Lifesciences, and Blizzard Entertainment. Additionally, Irvine is renowned for its academic excellence, hosting prestigious universities like the University of California, Irvine, and Concordia University, making it one of the most educated cities in America.
12. San Mateo
IM Score: 7
San Mateo, in California's San Mateo County on the San Francisco Peninsula, is known for its exorbitant cost of living. Median home price is around $1.4 million, make it one of the country's priciest housing markets, driven by its Bay Area location and the demand for lucrative tech jobs. The city's cost of living surpasses the national average, influenced by high housing costs and proximity to major Bay Area cities.
11. Sunnyvale
IM Score: 8
Sunnyvale, in Silicon Valley, California, boasts a pleasant climate, low crime rates, and ample job opportunities, but it's notorious for its high living costs. With a median house value of around $1.4 million, well above the national average, proximity to major tech firms drives this expense.
10. San Jose
IM Score: 9
San Jose, one of the most expensive U.S. cities, is significantly driven by its high housing costs. As of August 2023, the median home value was $1.4 million, a 12% increase from last year. Its prime location, the booming tech industry, and demand from wealthy residents and tech workers contribute to these costs. San Jose's thriving tech industry attracts tech workers with a median IT job salary of $148,607, nearly topping the list.
9. Mountain View
IM Score: 11
Mountain View, in the heart of Silicon Valley, is renowned for its steep living costs, with median home price reaching $2 million due to the influence of the tech industry, making it one of the most expensive cities to live in California. The city's cost of living surpasses the national average, fueled by high housing expenses and proximity to major Bay Area cities. Hosting tech giants like Google, LinkedIn, and Intuit, Mountain View's economy is tech-driven, further boosting living costs and offering support for businesses and small enterprises.
8. Santa Monica
IM Score: 13
Santa Monica's cost of living is exceptionally high, with the median home price at $1.6 million and steady market growth. Rent averages $3,500. Despite its beautiful beaches, vibrant nightlife, and proximity to Los Angeles, the exorbitant cost of living poses challenges for residents trying to afford housing and expenses.
7. Redwood City
IM Score: 14
Redwood City in Silicon Valley, California, is known for its tech companies, high housing costs (median value $2.2 million), and elevated living expenses (137% above the national average). Major tech employers like Oracle, Electronic Arts, Evernote, Box, and Informatica drive these costs up. Despite the expense, it's considered one of California's best places to live, boasting a lively downtown, scenic hiking trails in the nearby Santa Cruz Mountains, and exceptional countryside views.
6. Stinson Beach
IM Score: 15
Stinson Beach boasts a stunning coastal location, but it comes with a steep price tag. The median home price is $2.6 million. Households earn an average of $120,250 annually. Renters pay around $3,000 monthly. The high cost of living should factor into any decision to reside in this picturesque locale.
Click to see and continue reading the Top 5 Most Expensive Cities To Live In California.
Suggested Articles:
Disclosure, None: The Top 20 Most Expensive Cities To Live In California is originally published on Insider Monkey