Affordability today describes the widening gap between what households earn and what they must pay for basics like housing, food, health care, and transportation, and it has become a central voter lens for judging every major policy choice.¹ The same forces driving the modern wealth gap are making this “cost of everyday life” problem both more politically explosive and more consequential for apartment owners in California and nationwide.²

Affordability today describes the widening gap between what households earn and what they must pay for basics like housing, food, health care, and transportation, and it has become a central voter lens for judging every major policy choice.¹ The same forces driving the modern wealth gap are making this “cost of everyday life” problem both more politically explosive and more consequential for apartment owners in California and nationwide.²

What “affordability” means now

In current political debates, affordability is less about abstract inflation numbers and more about whether a median working household can maintain a middle-class standard of living without chronic debt or sacrifice of essentials.³ Surveys show large majorities of Americans report serious difficulty keeping up with rent or mortgage, groceries, and medical bills, and over 80 percent expect the cost of living to rise further.⁴ National commentary now treats affordability as a broad “cost of living crisis,” linking wages that lag productivity to higher prices for housing, health care, education, and basic goods.¹ Politically, this turns every policy—taxes, tariffs, zoning, wage rules, environmental regulation—into a referendum on whether it makes life more or less affordable for the working and middle class.¹

Affordability and the wealth gap

The affordability debate is inseparable from the wealth gap, because who owns assets largely determines who benefits from price and policy changes.² Federal Reserve data show the richest 10 percent of U.S. households now own more than two-thirds of all wealth, while the top 1 percent alone holds about 31 percent—roughly as much as the entire bottom 90 percent combined.² Visualizations of wealth distribution find the top 10 percent own more than the bottom 90 percent together, with the top 0.1 percent alone holding around 14 percent of household wealth.²

In California, the wealth and income structure translates directly into an acute housing-affordability squeeze: statewide, only about 18 percent of Californians earned enough in 2024 to afford the median-priced detached home of roughly 865,000 dollars, down from 19 percent the year before.⁵ In late 2023, just 15 percent of households could afford a median-priced California home at about 833,000 dollars, and only 22 percent could afford a median condo or townhome, reflecting extremely high entry barriers to ownership.⁶ This dual reality—concentrated asset wealth and thin access to ownership—feeds resentment and makes tenants and younger voters extremely sensitive to rent levels, fees, and perceived landlord “windfalls.”⁵

Impacts on rental housing owners

For apartment owners, the affordability issue is already reshaping both operating conditions and political risk, and that impact is likely to intensify.⁵ Policy pressure: As homeownership drifts further out of reach, political energy flows toward stronger rent control, “good cause” eviction rules, rent registries, and new tenant protections framed as affordability measures, especially in high-cost states like California.⁵ Operating stress: Tenants with stagnant real incomes relative to rent face greater payment stress, meaning higher delinquency risk, more payment plans, and more political sympathy for moratoriums, rent caps, and fee limits in the next downturn.⁴

Looking forward, California’s structurally low homeownership affordability and high demand for rental housing suggest continued political targeting of “mom and pop” owners as visible, local embodiments of broader affordability frustrations, even though systemic drivers lie in wages, supply constraints, and macro policy.⁵ Growing emphasis on “socialized” housing solutions—public housing expansion, social housing entities, and heavy regulation of private stock—as standard political planks in blue jurisdictions is also likely.¹

Will these pressures grow?

Current data support the view that affordability and wealth-gap effects will grow rather than fade in the near- to medium-term.² Over multiple decades, the wealth share of the top decile and especially the top 1 percent has risen steadily, while the bottom 50 percent holds only a small single-digit share of wealth, and there is no sign of a spontaneous reversal.² In California, the share of households able to afford median-priced homes has been trending down, not up, and 2024 data show a further erosion of affordability statewide and across most ethnic groups.⁵ Absent a major shift in tax policy, wage policy, housing production, or significant wealth-redistribution measures, the political salience of affordability is very likely to increase, not diminish, and rental property owners will remain at the center of that debate in coastal states.¹

Historical lessons from large wealth gaps

History offers several warnings about prolonged, extreme wealth gaps combined with perceived unfairness in access to basic necessities like housing.² Late-19th and early-20th century America: The Gilded Age concentration of wealth contributed to intense labor conflict, populist and progressive movements, antitrust laws, and eventually the New Deal, which imposed new taxes, regulation, and social insurance programs that restructured capital–labor relations for generations.² More broadly, economic history research finds that societies with large, persistent wealth gaps often experience higher political polarization and populist movements on both left and right, as well as stronger demands for redistributive taxation, regulation of property and capital, and expansion of state roles in housing, health care, and pensions.² In housing specifically, high rent burdens and visible landlord-tenant inequality have historically fueled rent strikes, strong rent control regimes, and experiments in public or cooperative housing in cities from New York to European capitals.²

Protective steps for apartment owners

In this environment, apartment owners cannot eliminate political risk, but can take practical steps to safeguard both income streams and asset value.⁵

Strengthen financial resilience

Maintain higher operating reserves and conservative leverage, assuming periods of rent caps, slower rent growth, and possible eviction constraints or payment disruptions in future downturns.⁵ Stress-test cash flows under scenarios with modest rent increases, higher delinquencies, and longer vacancy/turnover times to ensure debt service and essential capital improvements remain covered.⁵

Emphasize compliance and documentation

Stay current on state and local rent-control, just-cause, and tenant-protection ordinances, and document notices, communications, and unit conditions meticulously to reduce litigation risk in a more tenant-friendly legal climate.⁵ Use compliant, transparent fee structures and application processes, anticipating heightened scrutiny of “junk fees” and tenant-screening practices under the banner of affordability.⁴

Invest in property condition and tenant stability

Prioritize maintenance and habitability to limit code-enforcement vulnerability and political targeting, which tends to fall first on owners seen as neglectful.⁵ Where feasible, cultivate longer-term tenancies through modest, predictable rent increases and strong communication; stable tenants reduce turnover costs and are often allies if extreme measures are proposed against “bad landlords.”⁴

Diversify risk exposure

Consider geographic diversification across regions with different regulatory and political profiles, so exposure is not concentrated solely in the most aggressive jurisdictions.² Evaluate asset-class diversification—mixing rent-controlled and market-rate units or combining multifamily with other property types—to spread policy and market risk.²

Engage in policy and narrative shaping

Participate in local and state industry associations that can provide early warning on legislative trends and coordinate responses to measures framed as “affordability” but heavily burdensome to small owners.¹ Develop and communicate a clear story about the role of small, local owners in providing and preserving housing, including data on costs, taxes, and compliance burdens, to counter simplistic “landlord versus tenant” narratives.¹ These steps cannot reverse the underlying wealth and affordability trends, but they can improve resilience, reduce the odds of becoming a political or legal target, and position apartment owners to survive—and even adapt profitably—to a long period in which affordability and inequality dominate the policy agenda.¹

Footnotes: 1. Time, “The Shutdown Highlighted America’s Affordability Crisis.” 2. Inequality.org, “Wealth Inequality” (summary of U.S. wealth distribution and concentration at the top). 3. The Century Foundation, “The Affordability Crisis Is Here, and It’s Hitting the Working Class the Hardest.” 4. The Century Foundation survey data on cost-of-living stress and expectations. 5. Intempus Property Management, “2024 California Housing Affordability Landscape,” and related California affordability metrics. 6. National Mortgage Professional, “Homeownership Slips Further Away For Californians,” summarizing CAR and related affordability statistics.

Written by Wesley V. Wellman

Wesley V. Wellman has been active in the financial services field for more than 40 years. His brokerage firm, Wellman Realty Company, specializes in multi-family and commercial investment property. Since the year 2000, Mr. Wellman has sold over $342 million of investment property. He is a Santa Monica apartment industry leader and is frequently quoted in the local press about rental property issues. He is one of the founding directors of the Action Apartment Association, which was formed in 1980. As an advisor, Mr. Wellman draws on a wealth of educational background in real estate, taxation, securities and estate planning.