Money

In San Francisco, households earning $117,000 qualify as ‘low income’

RICOWde | Getty Images

The increasingly steep cost of living in the Bay Area means that even earning six figures in San Francisco might not be enough to make ends meet.

A new report from the Department of Housing and Urban Development says that a San Francisco metro area family of four bringing in $117,400 a year qualifies as “low income." Last year, the cut off was $105,350. An annual salary of $82,000 now puts single adults in the “low income” bracket as well.

Other notoriously expensive cities aren’t nearly as extreme. In New York, the “low income” threshold for a family of four is $83,450 per year. In Los Angeles, it’s $77,500.

Making ends meet for a family of four in San Francisco requires a household income of $92,139, according to MIT’s living wage calculator. The model takes into account factors such as the costs of child care and health insurance, in addition to food and other regular expenses, but doesn’t include conveniences such as restaurant meals, vacations and money left over for investments.

Silicon Valley’s income inequality hits certain groups particularly hard. Despite working at major tech companies, contract workers, such as janitors and cafeteria workers, struggle to get by. One contractor at Facebook, security guard Jiovanny Martinez, must also drive for Lyft and work as a park ranger to support his family, he tells The Guardian.

Nicole and Victor, a married couple who are both contract workers in the cafeteria at Facebook's headquarters, are living in a two-car garage with their three children. They borrow money from friends and family to stay afloat, they tell The Guardian in a separate article, and occasionally resort to payday loans. They cannot afford the company's health care plan.

Although Facebook implemented a minimum wage of $15 for all of its contractors in 2015, the paychecks don't go far around San Francisco, where the cost of living is 62 percent higher than the U.S. average.

Even some white-collar employees in the area are struggling. In 2017, one Twitter employee earning a $160,000 salary told The Guardian that he's barely scraping by in Silicon Valley.

The employee's biggest expense is the $3,000 monthly rent he pays on a two-bedroom house where he lives with his wife and two kids, which he describes as "ultra cheap."

"Families are priced out of the market," he says, explaining that it's hard to compete with the hordes of 20-somethings willing to pile into a shared house — and still pay $2,000 per person for a room.

Don't miss: Here's how much you have to earn to live comfortably in the 15 largest US cities

Like this story? Subscribe to CNBC Make It on YouTube!