Why is This Important?
A lack of affordable housing limits the ability of people to live in San Mateo County and can 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 socioeconomic backgrounds are to share in the benefits 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 2010, 48 percent of households in San Mateo County could afford to purchase an entry-level home defined as one that is equal to 85 percent of the prevailing median price. By comparison, 55 percent of households in the greater Bay Area region, and 69 percent statewide could afford to purchase an entry-level home.
· Housing affordability has improved considerably since 2007 when home prices peaked in the county and throughout the state as a whole. In the second quarter of 2007, only 19 percent of households in San Mateo County could afford an entry-level home.
· Despite the improvement, San Mateo County remains one of the most unaffordable counties in the state for housing. Only San Francisco and Marin had lower first-time homebuyer affordability ratings; neighboring Santa Clara County is 57 percent.
· In 2010, the median sales price of a single-family home in San Mateo County was $725,000, a 5 percent increase from 2009 in inflation-adjusted dollars. The median sales price for single family homes in the county now stands 23 percent lower than its peak in current dollars.
· Home prices vary widely in the county. Atherton had the highest median sales price in 2010 at $2,900,000, four times the county median. Seven 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 increased in 2010 after falling since 2006. The county average was $134,000 in 2010, a figure 34 percent above the median household income for San Mateo County in 2010 of $99,400.
· Average rents in the county were stable in 2010; one- and two-bedroom apartments were $1,496 and $1,688 per month respectively. Average rent has dropped by 9 percent since 2008.
Housing Production
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 allocating San Mateo County 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 lowincome levels (<80 percent and <50 percent of the regional Median Household Income respectively). As a result, the county needs to produce—on average—just under 2,000 new housing units per year.
· Building permit issuance is one indicator of new housing production. In 2010, the Construction Industry Research Board reported that total building permit issuance was a mere 335 housing units (214 single-family homes and 121 multi-family units). Building permit issuance has fallen considerably from a peak of 942 in 2008.
