Why is This Important?

A lack of affordable housing limits the ability of people to live in San Mateo County and may reduce the availability of qualified workers for local businesses. In response to high housing prices, local workers may be forced to live in another county and face long commutes, or pay more than they can comfortably afford for housing. The provision of affordable housing for low- and very-low-income individuals is of particular importance if community members of all socio-economic backgrounds are to share in the benefi ts of job growth and economic development.

What is a Sustainable State?

A sustainable state is one where housing is available and affordable to all members of society and new housing is built to meet projected population and job growth.

How Are We Doing?

Housing costs
• The California Association of Realtors (CAR) tracks first-time home buyer affordability throughout the state. This metric is one of the most fundamental for assessing the overall housing health of a community. According to these data, in the fourth quarter of 2009, 41 percent of households in San Mateo County could afford to purchase an entry-level home. (An entry-level home is defi ned as one that is equal to 85 percent of the prevailing median price.) By comparison, 50 percent of households in the greater Bay Area region, and 64 percent statewide could afford to purchase an entry-level home.
• Housing affordability has improved considerably since 2007, when home prices peaked throughout the state. In the second quarter of 2007, only 19 percent of households in San Mateo County could afford an entry-level home.
• In 2009, the median sales price of a single-family home in San Mateo County was $678,750 a 15 percent decrease from 2008 in inflation-adjusted dollars. The median sales price for single-family homes in the county has decreased 28 percent from its peak in 2005.
• Home prices vary considerably throughout the county. Atherton had the highest median sales price in 2009 at $2,790,000, more than four times the county median. Five other communities had median sales prices over $1,000,000.• The household income necessary to purchase a median-priced single-family home in San Mateo County decreased significantly in 2009 because of reduced home prices and better mortgage rates. The estimated household income required to purchase a median-priced house fell to $129,500. Nevertheless, this amount remains 34 percent above the median household income for San Mateo County in 2009 ($96,800).

• In 2009, average rents in the county for one- and two-bedroom apartments were $1,438 and $1,675 per month respectively. Adjusting for infl ation, rents were 10 percent lower in 2009 than the previous year.

Housing production
In a 2007 survey by the Silicon Valley Leadership Group, 84 percent of business leaders listed housing as their number one business concern, and 99 percent said housing was the top cost of living challenge for area employees. A significant shortage in the housing supply is the primary cause for the high housing costs in the county. Barriers to housing development include limited undeveloped land, local regulatory barriers, and community opposition.

Every five to seven years, the Association of Bay Area Governments (ABAG) develops a Regional Housing Need Allocation (RHNA) for the Bay Area. From it, local jurisdictions are allocated housing production targets based on anticipated job growth, anticipated population growth, and existing need. San Mateo County produced 63 percent of its total allocated housing target from 1999 to 2006 (the last completed RHNA period). The Bay Area region as a whole produced 92 percent of the regional housing needs target.

In June 2008, the Association of Bay Area Governments (ABAG) published the latest RHNA targets. San Mateo County was allocated a target of nearly 16,000 new units for 2007-2014. Approximately 39 percent of those units are required to be affordable for households in the low- and very-low-income levels (<80 percent and <50 percent of the regional Median Household Income respectively).

In 2008, permits for 932 total residential units were issued in San Mateo County, about the same as 2007 (910). Of note, only 226 of these units (about 24 percent) were issued in the very-low and low-income affordability range. In 2009, the California Building Industry reported that total permit issuance continued to fall. In total, permits for 608 new residential units were issued in San Mateo County, a decrease of 35 percent from 2008. Data on affordability are not yet available for 2009 new construction.