THE PRICE OF IMBALANCE

The Bay Area’s burgeoning economy has produced more jobs than housing units, particularly in job-rich communities. Consequently, the cost of buying or renting a place to live in the region has soared. Given the amount, location, and type of housing being planned, the region’s housing costs are expected to remain among the highest in the nation.

Nearly 200,000 acres in the region have been earmarked for residential development over the next 20 years—the equivalent of 5.5 Oaklands or 16 Walnut Creeks. A significant portion of that development is planned in areas distant from those earmarked for commercial/industrial development. That discrepancy will exacerbate the region’s problems, such as traffic congestion.

San Francisco Bay Area Job and Housing Growth 1995-1997

{Job & Housing Growth}

Proportion of Households That Can Afford a Median Priced Home {Median Priced Home}

According to the California Association of Realtors, in 1997 the median price of an existing Bay Area home was $292,610, in contrast to $186,490 statewide and $124,100 nationally. Rental rates are also high and rising sharply. Between the end of 1995 and the third quarter of 1997, rents rose an average of 33.3 percent in San Francisco, 29.1 percent in Santa Clara County, 24.6 percent in San Mateo County, and 16.9 percent in Marin County, according to Realfacts, a Novato data service. In contrast, the U.S. Consumer Price Index rose only 5 percent during the same period. In 1993 (the most recent year for which data are available), Santa Clara County and the San Francisco-Oakland metropolitan area ranked among the country’s eight worst housing markets based on the ratio of low-income renters to low-income units, according to the Washington, D.C., Center on Budget and Policy Priorities.

OTHER LIMITS IMPOSED BY HOUSING STOCK

According to the California Department of Finance, more than two-thirds of the housing built in the Bay Area between 1990 and 1996 were single-family detached units. Of the land available for residential development between 1995 and 2020, 60 percent is earmarked for single-family homes.

In the Bay Area, single-family detached homes are beyond the reach of many households. Those more affordable in price tend to be built far from jobs and public transit. Many new single-family homes are also two-story, which may be inaccessible to the growing numbers of older or disabled residents. This conformity of design also limits the options available to increasingly diverse families, including multigenerational households whose numbers are projected to increase substantially.

New Housing Built in San Francisco
Bay Area by Type, 1990-1996 {New Housing}

Many Bay Area communities have resisted higher density housing based on the real or perceived failings of older high-density projects. Consequently, many private developers have steered clear of attached-housing developments, such as apartment and condominium complexes, because they are often more controversial and take longer to process even when approved. In addition, lawsuits filed against developers by homeowners associations for alleged construction defaults have also chilled the attached-housing market.

However, architects, developers, and local governments have learned from past mistakes how to successfully design and manage more compact housing, frequently turning one-time opponents into ardent supporters. Such housing developments typically require less water, and, when sited near public transit, can help reduce traffic congestion. Multifamily and attached housing also provide more affordable options for young families and other segments of the population.