By Michael Contos
Why Does Everything Cost So Much?
You’re not imagining it. You’re not bad at math. You’re not spending too much on coffee. The cost of living in America has gone up sharply, and for many of us in Lake County, it’s hit harder than in wealthier parts of the state. This article explains what’s driving the affordability crisis: what’s pushing prices up, who’s getting squeezed the worst, and why these matters as a political issue Democrats need to address head-on.
Here’s the thing people often miss. Inflation, the rate at which prices go up, has slowed way down from the 9.1% peak in 2022 to around 2.7% today. But the actual price level, what things cost when you’re at the register, hasn’t gone back down. Groceries are still up 25% from 2019. Same with housing, utilities, insurance, healthcare, and childcare. All of them reset higher and stayed there. Slower inflation just means prices are climbing less fast from an already painful baseline.
Lake County’s Starting Point: Already Behind
Lake County starts from a tough position before any national trend even gets here. Our median household income is about $51,400, one of the lowest in California. The statewide median is over $100,000. That means every dollar price increase hit families here about twice as hard as it does someone in Marin or Santa Clara. Our economy depends heavily on healthcare and social services (25% of jobs), retail, and construction. None of these are high-wage sectors. About 17% of residents live below the poverty line, and 22% of kids. The people doing essential work here, the people who keep this county running, are the ones getting crushed by rising costs.
What’s Actually Gone Up
These aren’t talking points. These are the real numbers Lake County families are paying.
- Overall prices up 26% since 2019. Wages here haven’t kept up.
- Groceries have gone up 25% since 2019. Eggs are still nearly double what they cost before the pandemic.
- Rents up 29% nationwide between 2020 and 2024. More than a third of Lake County households rent.
- Childcare costs up 30% since 2020, now over $13,000 a year on average. That’s more than many families here pay in rent. For working parents, the math often just doesn’t work.
- Healthcare costs up 7% in 2026 for employer plans. The U.S. now spends 18% of GDP on healthcare, up from 5% in 1963.
- Utility bills went up by 12% in the past year, averaging $265 a month nationally. California has the second-highest rates in the country.
People aren’t just reacting to today’s high prices. They’re reacting to the fact that the cost of living permanently reset higher and their paychecks didn’t. That’s why the slowdown in inflation hasn’t translated into relief.
Lake County’s Unique Crisis: Fire, Insurance, Housing
This is where Lake County’s story splits off from the rest of the country. In the last ten years, about 70% of our land has been burned. Nine major wildfires since 2015. No other California county has taken this kind of repeated hit. The financial fallout, especially around housing and insurance, is unlike anywhere else in the state.
The Insurance Death Spiral
Insurance companies look at our fire history and decide the risk is too high. They cancel policies or refuse to write new ones. Homeowners get forced onto California’s last-resort insurer, the FAIR Plan, which covers less for more money. New buyers can’t get affordable insurance, which means they can’t get a mortgage, and home sales fall apart.
Statewide, home insurance premiums are up 45% since 2022. In high-risk fire zones like most of Lake County, cancellations are way above the state average. Some buyers are getting annual quotes of $10,000 or more. That’s enough to blow mortgage qualification and kill deals.
“When somebody gets a quote that says it’s going to be $10,000, they really rethink whether they want to buy it or not. I have seen deals fall apart.” (Sandy Tucker, President-elect, Lake County Association of Realtors)
Manufactured housing makes up about 30% of Lake County homes, the highest share of any California county. Many standard policies don’t cover them adequately in high fire-risk zones, making the insurance problem even worse.
California passed insurance reforms in late 2024 to try to bring insurers back to fire-risk areas. A few companies have said they’ll expand coverage. But the reforms also let insurers use future climate projections when setting rates, which means premiums could keep going up. Progress is real but slow, and the affordability problem is still brutal.
Rebuilding Costs Keep Going Up
The insurance crisis collides with another problem: the cost of rebuilding after fires. Construction materials like steel, aluminum, and lumber have gotten more expensive because of tariffs, supply chain problems, and labor shortages. For families who’ve lost homes, trying to recover when insurance is unaffordable and construction costs are sky-high is nearly impossible.
The National Housing Crisis
The housing affordability crisis didn’t start with the pandemic. The U.S. was already short about 5.5 million housing units when 2020 began. This shortage built up over decades: restrictive zoning laws, existing homeowners blocking new construction (NIMBYism), and the collapse of homebuilding after the 2008 crash.
Then the Federal Reserve jacked up interest rates to fight inflation. Mortgage rates went above 6%. This created what economists call the “lock-in effect.” Most American homeowners have mortgages at 4% or below. They have no reason to sell and take on a new mortgage at 6% or 7%. So they stay put. Inventory stays low. Prices stay high. First-time buyers, especially young people and working families, get locked out.
The median age of a U.S. homebuyer hit a record 59 years old. The typical first-time buyer is now 40, up from 33 just five years ago. Meanwhile, institutional investors now buy 30% of single-family homes, often pricing out regular families. This isn’t individual failure. It’s a policy failure that’s been building for decades.
Why Local Businesses Are Getting Squeezed Too
Affordability isn’t just a consumer problem. The small businesses, farms, wineries, and service providers that make up Lake County’s economy face rising costs from the same forces hitting households. And they’re stuck: absorb the costs and risk closing or pass them on and make things worse for customers.
Commercial insurance premiums are up 45% or more since 2022. Labor costs keep rising through higher wages and payroll taxes. Tariffs on imported goods and materials keep rising input costs. Business loan rates are now 6% to 8%, making it harder to invest, expand, or survive slow seasons. Wildfire damage to agriculture and tourism cuts revenue directly. And Lake County’s population is slowly shrinking, down about 0.3% a year, which means a smaller customer base for everyone.
Most businesses are doing both now: absorbing some costs, passing on others. Nobody’s happy. The result is a slow erosion of local businesses, which means fewer jobs, less local spending, and a weaker base to support county services.
The Big Forces Driving All of This
Behind the squeeze on both consumers and businesses are several big structural forces. They didn’t start with any one administration, and they won’t be fixed by any single policy. But they’re shaped by political choices, which is why Democrats need to understand them and talk about them clearly.
Climate Change Is Driving Up Costs Now
This is the most underappreciated driver, and it’s hitting Lake County harder than almost anywhere else in California. Climate change isn’t a future threat anymore. It’s reshaping the economics of living here right now. Home insurance premiums are up 45% nationally since 2022. In high-risk ZIP codes, non-renewal rates are 80% higher. For Lake County, this is existential. Unaffordable insurance is killing home sales, trapping current homeowners, and pushing down property values and the tax revenue that funds county services.
Climate change also raises food prices through damaged crops, drives up utility costs through higher energy demand, and increases construction costs. Without addressing climate change itself, insurance affordability in Lake County won’t improve. It’ll get worse.
The Tariff Mess
In February 2026, the Supreme Court struck down a big chunk of Trump’s tariff program as unconstitutional executive overreach. Within hours, the administration imposed new tariffs under different legal authorities. The fight over refunds (potentially $175 billion) continues, but any refunds go to importers, not consumers. Retailers have already said they won’t lower prices.
The bigger point is this: blanket tariffs, no matter which law authorizes them, work like a regressive tax. They raise prices on everyday goods, hit lower-income households harder, and for Lake County specifically, they make rebuilding after fires more expensive by raising construction costs. Economists estimate remaining tariffs will cost the average household several hundred dollars in 2026, even after the Court ruling.
Interest Rates: Necessary but Painful
The Federal Reserve raised interest rates hard to fight inflation, and it worked. The inflation rate came down. But the higher rates had other consequences: they froze the housing market through the lock-in effect, raised borrowing costs for businesses and governments, and made financing a home much harder even for people who could find one to buy. For Lake County families already stretched thin, these higher costs made everything worse.
Decades of Not Building Enough Housing
The United States failed to build enough housing for a generation. The 5.5-million-unit shortage is the result of restrictive zoning, NIMBYism, and the political power of existing homeowners to block new construction. No quick fix will undo this. Solving the housing supply crisis requires sustained policy reform at every level of government and the guts to push back against people who don’t want housing built near them.
Wages Haven’t Kept Up with Costs
For decades before the pandemic, corporate profits grew while workers’ share of those gains shrank. For Lake County workers in healthcare, farm work, retail, and construction, real wages still don’t cover what it costs to live here. Minimum wage increases help, but they also raise costs for small businesses caught in the same bind. This tension is real, and Democrats need to acknowledge it instead of pretending it doesn’t exist. The solution isn’t to hold wages down. It’s to address the underlying cost drivers: housing, healthcare, childcare.
How These Problems Feed on Each Other in Lake County
These problems don’t sit in separate boxes. In Lake County, they create a cycle that feeds on itself. Breaking requires hitting multiple points at once.
- Repeated wildfires destroy homes and infrastructure, drive up insurance costs, make insurers leave the market.
- Unaffordable or unavailable insurance kills home sales, traps existing homeowners, pushes displaced families into an already tight rental market.
- High construction costs (from tariffs, supply problems, labor shortages) make rebuilding slower and more expensive.
- Workers and families leave. Population drops about 0.3% a year. Tax base shrinks. Funding county services, fire prevention, and infrastructure gets harder.
- Businesses lose customers and close. Jobs disappear. People who stay have fewer options and less money to spend.
- Low wages plus high costs push more people into poverty. 17% of residents and 22% of kids live below the poverty line. Food insecurity goes up.
- Less money means less investment in fire prevention and forest management, making the next fire more likely to be worse.
- And the cycle starts again, each time from a weaker position.
Breaking this cycle means intervening at multiple points at once. Fixing just one thing, like trying to lure insurers back without addressing climate change, won’t produce lasting relief. Each problem makes the others worse. Solving one helps the rest.
What Democrats Should Stand For
The affordability crisis isn’t abstract. It’s what the people we represent live with every day. Democrats have solid policy positions on all of this, but we need to talk about the problems plainly, admit how big they are, and be honest about what will and won’t work quickly.
On Housing
We support zoning reform to build more housing, keeping and expanding housing assistance programs, and protecting tenants. We oppose cuts to HUD and Section 8. We admit that just building more isn’t enough. Affordability also requires income support, limits on financial speculation in housing, and holding institutional investors accountable for pricing out working families.
On Insurance and Climate
We support California’s insurance reforms and will hold insurers to their promises to return to fire-risk areas. We support serious investment in wildfire prevention, forest management, and community fire hardening. We admit that without addressing the root cause (climate change itself), insurance affordability in Lake County won’t improve. It’ll get worse. Climate policy isn’t separate from affordability policy. It’s central to it.
On Healthcare and Child Care
We support expanding health coverage, controlling prescription drug costs, and building on ACA protections. We support affordable childcare and universal pre-K, not as nice-to-haves but as economic necessities. When childcare costs more than rent, working parents face an impossible choice. Unaffordable childcare drags down working families, local employers, and the whole economy.
On Trade and Tariffs
The Supreme Court was right to check executive overreach on tariffs, but the deeper question is about policy. Blanket tariffs are bad economics. They work like a regressive tax that hits working families hardest. They raise the cost of rebuilding in fire-damaged communities. They haven’t brought back the manufacturing jobs that were promised. U.S. manufacturing has lost over 100,000 jobs in the past year. Smart trade policy protects American workers and holds trading partners accountable through targeted, strategic measures, not through broad taxes on American consumers.
On Wages and Worker Power
Supporting higher minimum wages, strengthening workers’ rights to organize, and making sure productivity gains get shared broadly aren’t optional. They’re required for an economy that works for working people. A strong economy is one where working people can afford to live in the communities where they work. When wages don’t keep up with costs, you don’t just get individual hardship. You get economic dysfunction.
Conclusion
The affordability crisis is real, it’s complicated, and without sustained policy action on multiple fronts, it’ll get worse before it gets better. For Lake County, the stakes are higher than almost anywhere else in California. People here start with lower incomes, face worse fire and climate risk, and have less cushion against the cost pressures hitting everyone.
The forces driving unaffordability aren’t natural disasters. They’re the result of political choices about who bears risk, who gets investment, and whose interests matter most. Democrats should make the case for different choices: investing in housing supply, climate resilience, worker wages, healthcare access, and childcare. Not as ideology, but as the practical things a working family in Lake County needs to build a stable life.
We don’t need to claim we have all the answers. But we do need to be honest about the problem, clear about our values, and serious about how long and hard it’ll be to fix. Quick fixes won’t solve structural crises. What’s required is sustained commitment to policy that puts working families first, and the guts to say so.
Sources: U.S. Bureau of Labor Statistics, California Department of Insurance, U.S. Census Bureau, Yale Budget Lab, Penn Wharton Budget Model, Tax Foundation, National Association of Realtors, McKinsey Global Institute, Federal Reserve, Supreme Court of the United States, Data USA, city-data.com. Analysis incorporates developments through February 2026. Prepared for member education and public outreach.