The Great Squeeze: Bay Area Residents Downsize and Adapt to Rising Costs

This story is part of How We Get By, a KQED series exploring how people are coping with rising costs in the Bay Area and California. Find the full series here. 

Brooke Dawson wanted the house. She wanted the marriage, the kids — one boy, one girl — and the financial freedom to make and sell ceramics.

Now, at 42, one kid and one divorce later, that dream has been squeezed into an Airstream trailer parked in the side yard of her mother’s North Bay suburban home, her kiln and throwing wheel relegated to storage.

On the surface, she realizes it may appear as though she’s far from achieving what she had wanted. But the act of whittling down her dream to fit her economic reality has changed her, she said, and made her reevaluate how her life should look.

“It just looks different,” the hospice nurse said. “I was struggling so hard up through January, and I’m at the point just now where I’m starting to see some daylight.”

Living in a smaller space has forced her to own and spend less. But now she has access to a yard and is putting the energy she spent on ceramics into gardening. Being close to her mother and brother, who also live in the house, has provided flexible childcare for her 5-year-old son that wasn’t possible when she lived almost an hour’s drive away.

The trade-off has been worth it, Dawson said.

“I’m OK. I’ve found a way,” she said. “And I thank God for every little thing. I’ve never had this degree of gratitude in my life.”

Dawson’s choice to downsize isn’t unusual. When KQED asked Bay Area residents how they’re managing the region’s high cost of living, many described similar compromises: moving into smaller homes, doubling up with family, taking on extra work, or cutting back on everyday expenses.

Their experiences reveal how rising housing costs and inflation are reshaping middle-class life in the Bay Area — forcing people to rethink what “enough” looks like and how to make ends meet.

They also mirror two national polls from the Washington Post and New York Times that found Americans see upward mobility as less attainable and consider maintaining the trappings of a middle-class lifestyle increasingly unaffordable — feelings that are expected to influence November’s midterm elections, with likely voters repeatedly citing the cost of living as a top concern.

Both nationally and in California, the pandemic-era inflation spike is a big part of that story, with prices rising for everything from new cars to groceries. In turn, that’s putting into sharp relief cracks in the foundations of major industries, such as healthcare and child care, said Neale Mahoney, director of the Stanford Institute for Economic Policy and Research.

Inflation, he said, has “really revealed and emphasized the underlying structural issues we have with the cost of healthcare that have been around for a long time, issues with the costs of child care that have been around for a long time.”

At their core, he said, is the cost of housing.

“Housing,” Mahoney said, “is at the root of many of the affordability issues we see in the Bay Area.”

In the Bay Area, the typical home value was nearly $1.2 million last year — lower than the 2022 peak of about $1.3 million — but still 77% higher than it was in 2012, even when accounting for inflation, according to researchers at the Metropolitan Transportation Commission. Meanwhile, the median rent for a two-bedroom apartment in the Bay Area was $3,300 as of early April, according to Zillow, about 83% higher than the national average.

The big squeeze

Those escalating rent prices aren’t new: Many respondents could trace their decisions about how and where to live to major changes in the housing market over the past two decades, including the 2008 financial crisis that left nearly 8 million homeowners in foreclosure or the rapid rise in Bay Area rents during the post-dot-com tech boom of the 2010s.

Keith Alvord, 65, and his wife, Lisa Alvord, were one of the families that found themselves underwater on their mortgage in 2010, eventually foreclosing on their home in the Trinity County town of Weaverville.

That house had been part of their retirement plan, a home base they could return to while they spent the majority of their golden years sailing. Instead, they went with Plan B: living full-time on their 35-foot sailboat. For the past three years, the Alvords have been docked at Bay Area marinas.

Winters are the hardest, Keith Alvord said. But, “We kind of felt like we didn’t really have many other options.”

Now, though, they’re trading the sailboat for a garage at their 43-year-old son’s home back in Weaverville, after their son suffered a financial crisis of his own. They hope to convert the space into an ADU, a move Alvord said will help both them and their son. Still, Alvord is worried.

“I really didn’t want to be in this situation, where I was basing mine and my wife’s stability off of my son’s stability,” he said. “If he gets to a point where he wants to sell the house, then we are kind of back in that situation where we’re like, ‘Well, where are we going to live?’”

But with home insurance prices rising, Alvord sees little other option than to stick close because, he said, “I don’t know how a single family is supposed to make that work.”

A survey last year from the National Association of Realtors found more families are making this choice, with multigenerational homebuying at an all-time high, representing 17% of homes purchased in 2024.

The survey also found that 36% of homebuyers cited “cost savings” as the primary reason for the joint purchase, up from 15% in 2015.

Misha Kurita-Ditz, 24, found themselves doubling up with a parent last year, when they moved back to their mother’s San Francisco condo after going to college and working in Oregon for several years.

The situation isn’t always ideal: “I’m a little bit cleaner than my mom,” they said. But it has its benefits, too. “It’s been really lovely to be able to have an adult relationship between me and my mother.”

The artist and retail worker grew up in a rent-controlled Edwardian walk-up in the city’s Western Addition/Lower Haight neighborhood with their parents and keenly felt the impacts of rising rents as the tech industry boomed in the 2010s, pushing up prices across the city. New landlords began pressuring them to leave, Kurita-Ditz said, and they were ultimately evicted.

“All of these things definitely contributed to feeling a lot of resentment and anger,” Kurita-Ditz said. That perspective has only further hardened after watching the latest AI boom drive rents even higher.

“How do we carve out a future for the culture of San Francisco, for the culture of the Bay Area in the face of impossible housing prices?”

On the margins

When housing eats so much of one household’s budget, it’s harder to feed other needs. KQED’s survey respondents said that it’s forced them to make choices about items they once considered essential.

Citlali Iriarte, 39, buys less meat when her monthly budget grows tight. Between 2019 and 2025, grocery prices rose roughly 34% for the average Bay Area resident, according to the Federal Reserve Bank of St. Louis. Iriarte found herself telling her two kids: “OK, this week we’re gonna eat different. We’re going to see more vegetables.”

She works two jobs, one taking care of her special-needs daughter through In-Home Supportive Services and the other as an early childhood educator at the YMCA.

Life in the Bay Area has never been particularly affordable for Iriarte, who immigrated from Mexico 13 years ago. But after years spent working nights, earning a high school diploma, securing her work authorization and eventually moving herself and her children into their own place, she said it would be difficult to move anywhere else.

“It took me years to be able to find a community that I can belong to,” Iriarte said.

Even some two-income households bringing in far more than Iriarte are finding themselves forced to cut back. Marion Gloege, 54, who immigrated from Germany 23 years ago and bought a Los Gatos home in 2021, said she’s always felt comfortably middle class.

But now, unexpected budget items she might have previously dismissed weigh on her: new tires for their car or paying for urgent care and an ER visit when her 17-year-old son suffered a concussion playing soccer.

“Five years ago we would have said, ‘Oh well, too bad,’” Gloege said. “Now we gulp, and my husband squeezes my hand in the car.”

To make ends meet, Christy Brown, 48, a counselor at a public high school in Danville, said she’s taken on several part-time jobs — teaching yoga, bartending and extra work at her school district — to get by. Together, she estimates she works up to 65 hours a week. But that, too, takes its toll.

“I’m just more tired, I guess. And I kind of feel a little bit like — I don’t know how to say this — frustrated and angry sometimes,” Brown said. “I feel like I’m constantly working so much, and it’s barely enough.”

Working more and carefully watching budgets means less time and money for recreation and travel. But Chad Morrison, 37, is now reconsidering something they once thought essential: owning a car. They had planned to buy a new electric vehicle when their 2013 Honda Fit, with 240,000 miles on it, finally gave up the ghost. But they no longer think they can afford it.

Nationally, the average total cost per 15,000 miles of car ownership rose 45% between 2017 and 2024, according to the Bureau of Transportation Statistics.

“I don’t know that I’d be able to save money while making car payments,” Morrison said. “I’d have to make other choices.”

A small start

In the North Bay, Brooke Dawson is feeling more committed than ever to the choices she’s made.

The past year has been one of her hardest — watching her marriage dissolve, moving in with her mother, taking out a loan to buy the Airstream, installing it in her mother’s yard and hoping she didn’t make a mistake.

Living in a small space has its drawbacks, she said, including a finicky electrical system, limited water and having to pump out her septic tanks by hand.

But, it’s forced her to spend most of her time in the backyard, where she’s planted an array of edible flowers and herbs — calendula, oregano, sage, lemon verbena — along with fruits and vegetables — sweet peas, figs, grapes, spinach, passion fruit, strawberries.

She’s more self-reliant than she’s ever been, she said.

“The more I learn about what I’m capable of doing, the more I get to know what kind of human I am,” Dawson said.

And she’s no longer dreaming of owning a home for only herself and her family. Now, she dreams of buying a vacant plot of land and installing a collection of tiny homes where several families could live.

She imagines an intergenerational community, with other mothers and grandparents, who could support each other with child care and aging in place.

It’d be a different way of living — more cooperative, less isolated.

“And this is a small start,” Dawson said of this seed of an idea, rooted in necessity. “It’s been the biggest gift that I’ve ever given myself.”