Bay Area Burden

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Bay Area Burden Examining the Costs and Impacts of Housing and Transportation on Bay Area Residents, their Neighborhoods, and the Environment Bay Area Burden Terwilliger Center for Workforce Housing www.bayareaburden.org n National Advisory Board J. Ronald Terwilliger, Chairman Steve Preston Trammell Crow Residential, Chairman OAKLEAF Waste Management, President U.S. Department of Housing and Urban Development, Carin Barth Former Secretary LB Capital, Inc., President Jonathan Reckford Tom Bozzuto Habitat for Humanity International, CEO The Bozzuto Group, CEO Nic Retsinas Henry Cisneros Joint Center for Housing Studies of Harvard University, Director CityView, Executive Chairman U.S. Department of Housing and Urban Development, Rick Rosan Former Secretary ULI Foundation, President Bart Harvey Ronnie Rosenfeld Enterprise Community Partners, Former Chairman Federal Housing Finance Board, Former Chairman Bruce Katz Alan Wiener Brookings Institute, Metropolitan Policy Program, Wachovia Securities, Managing Director Vice President and Director Pam Patenaude Bob Larson ULI Terwilliger Center for Workforce Housing, Lazard Real Estate Partners, LLC, Chairman Executive Vice President and Executive Director Rick Lazio JP Morgan Asset Management, Managing Director of Global Real Estate and Infrastructure Copyright 2009 by Urban Land Institute. Terwilliger Center for Workforce Housing 1025 Thomas Jefferson Street, NW, Suite 500 West, Washington, D.C. 20007 ii nn www.bayareaburden.org www.bayareaburden.org About the Urban Land Institute The Urban Land Institute is a 501(c)(3) nonprofit research and education organization supported by its members. Founded in 1936, the institute now has more than 32,000 members worldwide representing the entire spectrum of land use and real estate development disciplines, working in private enterprise and public service. As the preeminent, multidisciplinary real estate forum, ULI facilitates the open exchange of ideas, information, and experience among local, national and international industry leaders and policymakers dedicated to creating better places. The mission of the Urban Land Institute is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Members regard ULI as a trusted idea place where leaders come to grow professionally and personally through sharing, mentoring, and problem solving. With pride, ULI members commit to the best in land use policy and practice. About the ULI Terwilliger Center for Workforce Housing The ULI Terwilliger Center for Workforce Housing was established by J. Ronald Terwilliger, chairman and CEO of Trammell Crow Residential, to expand housing opportunities for working families. The mission of the Center is to serve as a catalyst in increasing the availability of workforce housing in high-cost communities by harnessing the power of the private sector. The Center supports the development of mixed-income communities close to employment centers and transportation hubs. Through a multifaceted approach the Center facilitates research, advocates for public policy change, publishes best prac- tices, convenes housing experts, and works to eliminate regulatory barriers to the production of workforce housing. Acknowledgments This report was prepared by ULI Terwilliger Center for Workforce Housing and the Center for Housing Policy, based on research conducted by the Center for Neighborhood Technology. This report and accompanying Cost Calculator is made pos- sible through the generous support of ULI Trustee James J. Curtis, III. www.bayareaburden.orgwww.bayareaburden.org n n iii n www.bayareaburden.org Executive Summary BAY AREA BURDEN provides a com- underscores the importance of coordination of land use, housing, prehensive analysis of the “cost broadening our understanding of and transportation policies, Bay Area of place” in nine counties located housing affordability to consider jurisdictions could create, preserve, throughout the San Francisco the combined costs of housing and and expand communities that are region by examining the costs transportation, as well as the im- both environmentally sustainable and and impacts of housing and pacts of longer commutes on the affordable to Bay Area households. transportation on Bay Area environment and quality of life. residents, their neighborhoods, Housing Plus Transportation Costs in the Bay Area and the environment. ENVIRONMENTAL CONSEQUENCES This report exposes the complexity Average Annual Average Annual Average Annual Housing RECALIBRATING of the interaction of housing and Housing Costs Transportation Costs + Transportation Costs HOUSING AFFORDABILITY transportation choices as well as $28,045 $13,375 $41,420 Although housing prices in the Bay expenditures, and the unintended Area have fallen from their peaks consequences on the natural % of Income + % of Income = % of Income during the real estate boom, Bay environment when they work at 39% 20% 59% Area households still spend an av- cross purposes. The report also erage of more than $28,000 annu- highlights the importance of “loca- ally on housing—about 39 percent tion efficiency”—the proximity of of the area median income. In ad- housing to transportation hubs, “When it comes to development—housing, dition to the high cost of housing, employment, and retail centers— transportation, energy efficiency—these things aren’t Bay Area households spend nearly as a driver of both affordability and $13,400 annually on transporta- environmental sustainability. mutually exclusive; they go hand in hand. And that tion. Combined, this cost burden means making sure that affordable housing exists in of $41,420 per year represents 59 ALIGNING LAND USE, HOUSING, percent of the median household AND TRANSPORTATION POLICES close proximity to jobs and transportation. That means income in the Bay Area. The high Land use decisions play a critical encouraging shorter travel times and lower travel costs. combined costs of housing and role in determining the availability transportation leave many Bay of housing that is affordable to It means safer, greener, more livable communities.” Area households with insufficient Bay Area working families in areas remaining income to comfort- that are near employment centers —President Barack Obama, July 13, 2009 ably meet their basic needs. This and transit. By strengthening the www.bayareaburden.orgwww.bayareaburden.org n n 1 TABLE 1 ] The Bay Area Consistently Tops the Charts in Housing Costs Rank Median Home Value Housing Costs 1 San Jose-San Francisco-Oakland, CA $694,700 2 Salinas, CA $658,700 3 Santa Barbara-Santa Maria-Goleta, CA $641,800 HOUSING COSTS IN THE BAY AREA are among the high- 4 San Luis Obispo-Paso Robles, CA $578,900 est in the country, ranking #1 in median home value, 5 Honolulu, HI $574,400 median monthly costs for homes with a mortgage, and median gross rent (Table 1). Rank Median Monthly Costs for Homes with a Mortgage Despite a relatively high median income of $72,630— 1 San Jose-San Francisco-Oakland, CA $2,803 in comparison to the national median of just over 2 Santa Barbara-Santa Maria-Goleta, CA $2,471 $50,0001—housing in the Bay Area remains generally unaffordable. While about one- 3 Salinas, CA $2,438 fourth of renters spend more 4 New York-Newark-Bridgeport, NY-NJ-CT-PA $2,432 than half of their incomes on 5 San Diego-Carlsbad-San Marcos, CA $2,412 housing in both the Bay Area and nationally, a substantially Rank Median Gross Rent larger share of Bay Area owners 1 San Jose-San Francisco-Oakland, CA $1,221 (20 percent) spend more than 2 Honolulu, HI $1,206 half their income on housing 3 Santa Barbara-Santa Maria-Goleta, CA $1,205 than is true for the U.S. overall 4 San Diego-Carlsbad-San Marcos, CA $1,168 (12 percent).2 Jurisdictions throughout the 5 Los Angeles-Long Beach-Riverside, CA $1,099 Bay Area have had difficulty permitting and building a Source: 2007 American Community Survey sufficient number of housing units to meet demand. TABLE 2 ] Percent of Regional Housing Needs Assessment Goals The total number of permitted units affordable to low- Successfully Permitted, 1999-2006 and moderate-income households in the Bay Area between 1999 and 2006 met only 47 percent of the San Francisco Above & Select Inner Very Low Low Moderate Moderate Total target for such East Bay Cities (0-50% AMI) (51-80% AMI) (81-120% AMI) (>120% AMI) housing set forth Berkeley 68% 171% 30% 167% 107% in the regional Moderate Income plan. As shown in Households are the Lowest Freemont 33% 22% 19% 67% 44% Table 2, rates of Served in the Bay Area Haward 6% 5% 98% 167% 92% permitted housing Oakland 27% 71% 8% 267% 107% (relative to goals) [ San Francisco 80% 52% 12% 156% 86% were particularly low for households with very low in- Total Bay Area 44% 75% 37% 153% 92% comes (44 percent) and moderate incomes (37 percent). Note: Values below the Bay Area average for the category are highlighted. Source: Association of Bay Area Governments. 2007. A Place to Call Home 2 nn www.bayareaburden.org www.bayareaburden.org Most Housing Affordable to Sonoma Co. Working Families is Located in the Napa Co. [ North Bay and the Inner East Bay N 80 W E l Solano Co. THREE-FIFTHS OF all Bay Area S residents live in communi- 0 10 20 ties that are unaffordable Marin Co. miles to households earning less than $80,000. Large cities 101 located along the Highway 880 corridor—principally along the eastern and southern shore- 680 Contra Costa Co. line in Oakland, San Leandro, SSanan FFrrranancciiiiscscoo CCoo.... San Francisco Co. Fremont, and low-cost parts 880 of San Jose—remain rela- 580 tively affordable. In addition, northern Sonoma and Napa 280 Alameda Co. counties and eastern Solano 0 10 20 County contain areas with miles below-average housing costs, Average Monthly Housing Costs but households living in these areas must travel farther to Less than $1,600 reach regional employment San Mateo Co. $1,600 to $2,000 centers and public transit. $2,000 to $2,400 $2,400 to $3,000 101 $3,000 and greater Santa Clara Co.
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