Reporter- San Francisco Business Times
Now that city officials across the Bay Area have finished crunching the numbers on the last seven years of housing supply progress, some assessment is in order.
The region’s cities must calculate how its housing supply is keeping up with projected population growth from 2007 to 2014 – numbers set by the Association of Bay Area Governments (ABAG) as the Regional Housing Need Allocation. There aren’t many carrots and sticks that ABAG can use to force cities to build that housing, so we end up with a wide array of successes and failures.
(Scroll down to see a breakdown of cities’ housing supply performances.)
It’s mostly failures though – and the data illustrates a reason why the Bay Area is one of the most expensive in the nation. A glance at the graphic at the bottom of this story shows how medium-sized and large Bay Area cities stack up – what percentage of their housing needs they actually built.
Cities like Milpitas, Sunnyvale, Redwood City and Dublin have plenty to brag about. They at least build close to the number of housing units they needed to. Cities like Oakland, Palo Alto and Berkeley? Pretty dismal failing grades.
San Francisco permitted 16,449 units out of the 31,193 units it needed to – 53 percent of the need, according to ABAG. (As the San Francisco Planning Department notes in a separate report, the city fulfills its full housing needs – but only for upper income residents – if you count units approved but not built.)
The entire region – Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano and Sonoma counties – permitted about half the units they needed to in order to meet projected population growth.
“It’s a litany of failure across the map,” said Matt Regan, senior vice president for government relations at the Bay Area Council, a pro-business group.
What causes some cities to be winners and losers? As we’ve written about before: Dublin and Milpitas have had plenty of land ripe for development, while Redwood City has had a downtown surge due to an ambitious zoning plan. Oakland has been dealt a bad economic hand due to rising construction and land costs for housing that delivers insufficient profits for developers and their financiers.
Plus, as the state’s legislative analyst’s office wrote in a report last month, projects across the Bay Area get delayed due to neighborhood opposition and environmental appeals.
Another interesting note: San Francisco housing advocates love to point the finger at Silicon Valley’s lack of housing production. The realities of those cities’ housing production progress are more nuanced though. Palo Alto and Menlo Park only produced 37 percent and 22 percent of its housing need respectively, but cities like Mountain View, Cupertino and Sunnyvale were certainly not among the worst performers.
When you break down housing supply by income levels, as ABAG does, the numbers look even worse. Only 28 percent of the housing needs of very-low-income people have gotten permitted; 24 percent for low-income; 26 percent for moderate income; and 84 percent for above-moderate income.
“We’re so far behind the gap. The past seven years before that we also didn’t build enough either. We’re in a huge deficit so we do need much more of the lower income housing to compensate for the fact that we haven’t been producing it over the years,” said Sarah Gudernatch, communications manager for the Non-Profit Housing Association of Northern California.
Cory covers real estate and economic development.