Bay Area Council Blog: Housing and Sustainable Development Archive

housing

BACPoll: Housing Frustration Spikes

Frustration over the Bay Area’s housing crisis intensified over the past year as the number of voters in the 2018 Bay Area Council Poll who say it’s gotten much harder to find a place to live spiked. The poll found 53 percent saying it’s gotten much harder to find housing compared to 36 percent last year, while the overall number of voters who say it’s gotten much harder or somewhat harder jumped from 64 percent to 76 percent.

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That certainly explains why Bay Area voters most frequently mentioned the region’s housing shortage and affordability crisis as its biggest problem and why, along with the high cost of living and epic traffic congestion, 46 percent say they are likely to leave in the next few years for presumably less expensive cities outside the region and outside the state, including Texas, Oregon and Nevada.

“Forcing people to leave the Bay Area is not the solution to our housing crisis,” said Jim Wunderman, President and CEO of the Bay Area Council. “We have one of the world’s most envied economies and near full employment, but that won’t last unless we provide the housing our region so badly needs. Every housing unit we fail to build in the Bay Area is a brick in a big wall around the Bay Area.”

Voters share similar concerns, with 75 percent saying the housing shortage threatens to undermine a Bay Area economy that has led the nation in creating jobs. Overall support for building more housing is strong.

Almost 30 percent—up slightly from 2017—of Bay Area homeowners said they would consider adding an accessory dwelling unit (ADU)—aka granny or in-law unit. Legislation authored by Sen. Bob Wieckowski that the Bay Area Council sponsored two years ago to ease local restrictions on ADUs has spurred a statewide surge in applications and the Council is sponsoring another Wieckowski bill this year (SB 831) that would remove even more barriers. Translating homeowners’ intentions into reality would create an estimated 450,000 units of new housing in a region with an estimated 1.5 million detached, single family homes.

Voters also expressed overwhelming 73 percent support for policies that make building more housing near transit and commercial areas easier. That support, however, didn’t translate into passage of legislation (SB 827) authored this year by San Francisco Senator Scott Wiener and supported by the Bay Area Council that would have made it easier to do exactly that. The bill drew strong resistance from local government and some environmental and social equity groups, but is expected to return next year.

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Support for building housing in and around existing residential neighborhoods is also strong, but has largely stagnated in recent years. The poll found that 59 percent of voters support more housing near them, but the figure dipped slightly from 62 percent in 2017 and remains largely unchanged from 2014.

Newer residents are more supportive of housing than those who have lived it the Bay Area the longest. Among residents who have lived in the region 10 years or less, the poll found that 73 percent say they’d like to see more housing while 52 percent of those who have lived in the Bay Area for 20 years or more say they would support more housing in their neighborhood.

For those who don’t flee, the housing shortage comes with financial impacts. While a little over half of voters say they are spending up to 35 percent of their income to keep a roof over their head, one third are spending 40 percent and more. Renters are among the hardest hit financially by the region’s stratospheric housing costs, with 40 percent spending 40 percent or more of their income on housing compared with 26 percent of homeowners.

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The 2018 Bay Area Council Poll, which was conducted online by Oakland-based public opinion research firm EMC Research from March 20 through April 3, surveyed 1,000 registered voters from around the nine-county Bay Area about a range of issues related to economic growth, housing and transportation, drought, education and workforce.

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BACPoll: More People Looking to Leave Bay Area as Housing, Traffic Problems Mount

Growing pessimism among voters about the overall direction the Bay Area is heading has more and more people thinking about heading for the doors. Bay Area Council Poll results released today (June 3) found that 46 percent of voters are ready to leave in the next few years, up from 40 percent last year and 34 percent in 2016.

And once again, millennials are leading the charge for the doors with 52 percent saying they will be seeking greener pastures in the next few years, up from 46 percent in 2017. Renters, people without college degrees and those spending 50 percent and more of their income on housing also want out.

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Where They’re Headed

Where people are headed drew a range of destinations. Of 461 voters who said they plan to leave, the poll found 24 percent plan to move elsewhere in California while 61 percent said they would look outside the Golden State. Texas was a popular destination, according to the poll, with 10 percent saying they would mosey on down to the Lone Star State.

Oregon, Nevada and Arizona also can expect to see a bump in former Bay Area residents in the next few years, the poll found. Another 6 percent said they would go just about anywhere that was more affordable and has lower taxes.

“These results are tough to report, but we can’t let this growing pessimism become a self-fulfilling prophecy,” said Jim Wunderman, President and CEO of the Bay Area Council. “There’s still time to get a handle on our housing and transportation problems, but it will require strong leadership and partnership across the region to do it combined with bold thinking and decisive action. We can’t wait until our economy tanks to fix these problems and letting our economy tank is not a solution.”

Housing, Traffic, Homelessness Top Issues

The Bay Area’s stratospheric housing costs, overall high cost of living and bumper-to-bumper traffic are the main culprits behind the region’s worsening grumpiness. The housing crisis topped the list of most nettlesome issues for the fourth straight year, according to the Bay Area Council Poll, with 42 percent mentioning it in an open-ended question as the region’s leading problem. Traffic was the second most-mentioned problem. Homelessness followed closely behind. Fewer mentioned concerns over development, over population and gentrification.

Read the poll results>>

Who’s Responsible for Fixing the Problems?

Bay Area voters are clear on who they think is most responsible for fixing the region’s housing and transportation travails. The poll found that 56 percent of voters think cities, counties and other public agencies are most responsible for making housing more affordable while an even bigger 66 percent say government agencies bear primary responsibility for improving traffic and transportation.

And while much blame has been heaped on the booming tech industry for the region’s problems, the poll found that just 19 percent of voters think it is the responsibility of tech companies to solve the housing affordability problem while 18 percent said it’s the job of tech employers to fix the region’s worsening traffic.

Economic Outlook on Sharp Descent

While Bay Area voters continue to be mostly optimistic about the regional economy, their outlook has dimmed dramatically over the past four years. Just 25 percent of voters surveyed say the Bay Area is headed in the right direction, a precipitous drop from just four years ago when 57 percent held a favorable outlook for the region. That pessimism is also creeping into voters’ attitudes about the Bay Area’s seemingly invincible economy, even as unemployment reaches record lows.

In 2014, 50 percent of voters surveyed in the Bay Area Council Poll expected the economy to improve. In 2018, that figure has plunged to just 25 percent. Just as troubling, the poll found 47 percent of voters expect a significant economic downturn sometime in the next three years.

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Voters’ view of their own financial outlook has also slipped. Since 2016, the poll found a considerable narrowing between the number of voters who see happy days ahead for themselves and those who expect to things to get worse financially. Echoing concerns about the region’s soaring cost of living, those with lower incomes harbor the greatest pessimism about how they are doing financially.

The 2018 Bay Area Council Poll, which was conducted online by Oakland-based public opinion research firm EMC Research from March 20 through April 3, surveyed 1,000 registered voters from around the nine-county Bay Area about a range of issues related to economic growth, housing and transportation, drought, education and workforce.

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Study: 20 Strategies for Improving (or Worsening) Housing Crisis

The Bay Area Council Economic Institute today (May 29) released a study showing how 20 different strategies – from fast tracking mega projects to eliminating certain parking requirements – can help improve (or worsen) housing affordability for thousands of households in Alameda County.

Although Alameda County has added 125,000 jobs since 2012, the number of new housing units permitted over that period has totaled just 27,505. The lack of supply has pushed home prices and rents steadily upward, with the median home price now standing at $800,000 and average rents near $2,500.

The housing shortage and upward pressure on prices that has resulted means 40 percent of Alameda County households – or almost 224,000 households – are considered housing cost burdened. That means they are paying more than 30 percent of their income on housing costs. The problem is even more severe for the county’s lower and middle income households, with those making $75,000 or less annually comprising 76 percent of the households defined as housing cost burdened.

The study analyzed how the addition of thousands of new housing units in transit-rich areas and the completion of large housing developments in several cities can boost supply and put downward pressure on prices and rents. For example, a plan to add 4,000 housing units in Fremont near the Warm Springs BART station can improve affordability for 2,821 households.

Read Solving the Housing Affordability Crisis>>

Strengthening requirements on cities to meet their housing obligations would improve affordability for more than 7,000 households. Collectively, cities across Alameda County permitted just 44 percent of the housing units they were required to approve. Legislation (SB 828, Wiener) that the Bay Area Council supports would bolster the requirements on cities to keep pace with housing demand.

While many of the strategies the study examined involved building new housing, some looked at how certain policies can worsen housing affordability. Expanding rent control to cities across Alameda County would worsen housing affordability for 10,353 households, the study found, largely by discouraging investment in new housing construction.

The study also looked at a number of novel approaches. Reducing parking requirements in Oakland by 10 percent across the city can improve housing affordability for 1,339 households. Maximizing the number of accessory dwelling units, also known as granny or in-law units, in Berkeley under statewide legislation approved in 2016 to streamline approvals of these units would reduce the housing cost burden for 604 households.

An earlier report by the Economic Institute looked at how similar strategies change affordability in San Francisco. Read the San Francisco housing affordability study>>

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VOTE EARLY, VOTE OFTEN FOR REGIONAL MEASURE 3

Absentee ballots began arriving this week in Bay Area mailboxes ahead of the June election and the Bay Area Council is urging early voters to support Regional Measure 3 to invest $4.5 billion to ease traffic and improve mass transit systems around the region. The Council is partnering with the Silicon Valley Leadership and SPUR on a multi-million dollar campaign that is ramping up now to spread the word about this important measure targeting the region’s horrific traffic and overburdened mass transit system. The Council was also instrumental in passing the legislation by state Sen. Jim Beall Jr. that authorized the RM3 vote. An estimated 75 percent of the money will go to public transit, replacing and expanding the aging BART fleet and extending BART to San Jose and Santa Clara, a fleet of ferries, electrifying and modernizing Caltrain and extending the SMART train in the North Bay. Another big chunk will go to unclogging some of the region’s worst traffic chokepoints at key highway interchanges in Contra Costa, Alameda, San Mateo and Santa Clara counties, and completing the widening of Highway 101 between Marin and Sonoma counties. The funding would come from a $3 toll increase on seven state-owned bridges that would be phased in over six years with $1 increases in 2019, 2022 and 2025. Learn more about RM3>>

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New Study Will Explore Opportunities for Expanding, Deepening Bay Area, Fresno, Central Valley Megaregion Connections

SAN FRANCISCO, CA – The Bay Area Council Economic Institute and Central Valley Community Foundation today announced the launch of an in-depth study to examine Fresno’s important role in the fast-emerging Northern California megaregion and how the arrival of high speed rail over the next decade will dramatically accelerate economic connections between Silicon Valley and the broader Bay Area and the state’s fifth largest city.

High speed rail is expected to shrink the time it takes to travel between the Bay Area and the Central Valley from more than three hours to less than one hour when it is scheduled to begin service in 2025 between Fresno and San Jose. That has huge implications for housing, transportation and workforce development across the megaregion and promises to bring exciting new economic opportunities to Fresno and other parts of the Central Valley. “Fresno and the broader Central Valley are key players in developing a broader megaregion strategy,” said Micah Weinberg, President of the Bay Area Council Economic Institute. “As county and other regional boundaries blur with the emergence of the megaregion, it’s imperative that we get a handle on what that future looks like and the infrastructure we’ll need to put in place to support it. We can act now to address these issues or confront chaos later. The Central Valley Community Foundation is an important and indispensable partner in making that happen.”

The study will focus in particular on strategies Fresno and other Central Valley cities can pursue to leverage high speed rail and other economic and demographic changes within the megaregion to boost their own economic prospects. While the 10 percent economic growth that Fresno has enjoyed since 2011 matches the national average, it has lagged cities like San Francisco and Los Angeles where the rate has reached 26 percent and 16 percent, respectively. Expanding the Central Valley’s participation in the megaregion economy, attracting new business and elevating its workforce to meet the needs of employers will also be a focus of the study.

“Improved economic and infrastructure connections between the Silicon Valley/Bay Area and the Central Valley is good, not just for our regions, but for the entire state,” said Ashley Swearengin, President and CEO of the Central Valley Community Foundation. “We are pleased to launch this work with the Bay Area Council and to explore meaningful ways to create new economic opportunities for Central Valley residents, businesses and communities and relieve pressure on the congested Bay Area.”

Swearingen kicked off the project on Friday, April 24 at a meeting in Fresno to identify the issues that would be addressed. The study is part of a much broader, long-term effort the Bay Area Council is leading to bring together top business, government and other civic leaders from the Bay Area, Central Valley, Sacramento and Monterey regions to develop a unified, integrated vision for guiding future planning for the megaregion around such issues as housing, transportation and workforce development.

Driving the Council’s intense focus on the megaregion is the Bay Area’s meteoric economic growth over the past decade combined with an historic housing shortage and affordability crisis. In search of more affordable housing, record numbers of Bay Area workers are being forced into longer and longer commutes from the Central Valley and Sacramento that are putting increasing pressure on an already overburdened and congested transportation system. At the same time, the Central Valley is eager to accelerate economic development opportunities that the megaregion offers and prepare its workforce.

The study with the Central Valley Community Foundation and support from Wells Fargo, UC Merced, Fresno State University, City of Fresno, and Lance Kashian & Co., is one of several activities the Council is leading to bring greater attention to megaregion planning. The Council is also working closely with Sacramento Mayor Darrell Steinberg and the Greater Sacramento Economic Council on megaregion issues, including investing in better rail connections along the I-80 corridor and promoting the capitol city as a destination for businesses looking to start and expand outside the Bay Area.

The Council will be convening a series of meetings in 2018 to begin a dialogue with government, business, nonprofit and academic leaders on the future of the megaregion.

 

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About the Bay Area Council Economic Institute

The Bay Area Council Economic Institute is a public-private partnership of business, labor, government and higher education that works to foster a competitive economy in California and the San Francisco Bay Area, including San Francisco, Oakland and Silicon Valley. The Economic Institute produces authoritative analyses on economic policy issues affecting the region and the state, including infrastructure, globalization, energy, science and governance, and mobilizes California and Bay Area leaders around targeted policy initiatives. Learn more at www.bayareaeconomy.org.

 

About the Central Valley Community Foundation

Central Valley Community Foundation has been a trusted partner in philanthropy in the Central Valley for more than 50 years. Our mission is to cultivate smart philanthropy, lead, and invest in solutions that build stronger communities. Learn more at www.centralvalleycf.org.

 

About the Bay Area Council

The Bay Area Council is a business-sponsored, public-policy advocacy organization for the nine-county Bay Area. The Council proactively advocates for a strong economy, a vital business environment, and a better quality of life for everyone who lives here. Founded in 1945, the Bay Area Council is widely respected by elected officials, policy makers and other civic leaders as the voice of Bay Area business. Today, more than 300 of the largest employers in the region support the Bay Area Council and offer their CEO or top executive as a member. Our members employ more than 4.43 million workers and have revenues of $1.94 trillion, worldwide. Learn more at www.bayareacouncil.org.

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GOOD NEWS, NOT-SO-GOOD NEWS ON HOUSING

It was a good news, bad news week in the Bay Area Council’s continuing fight to loosen the grip of the state’s historic housing shortage and affordability crisis. Legislation (SB 831) the Council is sponsoring to eliminate many of the fees that represent a financial obstacle to building accessory dwelling units (ADU), aka granny units, cleared a key Senate committee this week. The bill by Sen. Bob Wieckowski (Fremont) builds on reform legislation the Council sponsored in 2015 that has unleashed a statewide surge in ADUs. Fees and other regulatory barriers can add many tens of thousands of dollars to the cost of building an ADU. The Council estimates that making it faster, easier and less expensive for homeowners to build ADUs could result in the addition of well over 150,000 affordable housing units in the Bay Area alone.

Not all the news was positive, however. Legislation by Sen. Scott Wiener (San Francisco) that the Council was backing was defeated in committee after building trades, social equity and city government groups loudly opposed it. SB 827 stoked a statewide debate and gained national attention for its bold approach to promoting transit-oriented housing development. The bill would have allowed more home building near transit-rich areas like BART and Caltrain, but opponents feared it would lead to displacement of existing residents and weakened local control over housing decisions. The Council is looking forward to working with Sen. Wiener to bring the legislation back next year and we applaud his leadership in addressing a crisis that is hurting millions of Californians and threatening to harm the state’s economy.

Coming up, the Council will be returning to the state capitol next Tuesday to advocate for legislation (SB 1277) by Sen. Nancy Skinner (Oakland) that we are sponsoring that would address a huge statewide shortage of student housing. An estimated 762,585 California college students experience housing insecurity or homelessness. SB 1227 would authorize 35 percent more units in student housing developments that meet a variety of affordability requirements and exempt them from costly parking requirements. To join our coalition in support or SB 1227 and engage in the Council’s housing policy work, please contact Vice President Adrian Covert.

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STATE ECONOMIC STRATEGY BILL ADVANCES

California is a global innovation and economic powerhouse, but currently does not have a statewide, comprehensive plan to grow its economy. That would change under legislation (AB 2596) that the Bay Area Council is sponsoring with the Greater Sacramento Economic Council and Valley Vision. AB 2596, authored by Assemblymembers Ken Cooley, Kevin Kiley and Sharon Quirk-Silva, would authorize the creation a statewide economic development plan to grow jobs, better coordinate economic activities across counties and regions and boost the state’s competitiveness. Having a clear, unified strategy can also help protect the state against future economic downturns and ensure that economic opportunities are being spread more evenly across the entire state. AB 2596 on Tuesday won unanimous approval by the Assembly Jobs, Economic Development and the Economy Committee and now heads to Assembly Appropriations. Just ahead of the vote, an OpEd by Council CEO Jim Wunderman and Greater Sacramento Economic Council CEO Barry Broome that ran in the Sacramento Bee argued for passage of the bill. To add your company to the growing list of our AB 2596 supporters, please contact Director for Government Relations Cornelious Burke.

Read the OpEd in support of AB 2596>>

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Charting a Course for Megaregion Coordination

A rising economy, a massive housing shortage and growing traffic in the Bay Area are causing major changes across the Northern California megaregion that represent both opportunities and challenges. The Bay Area Council is spearheading an effort to bring together business, government, academic and civic leaders from across the megaregion on planning to embrace the former and minimize the latter. The Council last week traveled to Stockton where CEO Jim Wunderman presided over a meeting that included mayors from Stockton, Merced, Modesto and Livermore, leaders from key rail and regional planning organizations, and business and academic leaders.

In addition to hearing about the foundational research on the Northern California megaregion put together by the Bay Area Council Economic Institute and University of the Pacific, participants focused on the potential for future rail investments–in the ACE train and high speed rail–to spur economic development. The meeting, hosted by University of the Pacific in partnership with Valley Vision, was the first of a series of meetings the Council is convening across the megaregion in the coming months that will seek to produce a common policy advocacy agenda for megaregional stakeholders. To engage in the Bay Area Council’s work on the Northern California Megaregion, please contact Senior Vice President Michael Cunningham.

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Council’s Board Welcomes Senator Feinstein and Mayor Schaaf

U.S. Senator Dianne Feinstein and Oakland Mayor Libby Schaaf met with the Bay Area Council’s Board of Directors Thursday to discuss a range of pressing issues, from healthcare reform and homelessness to infrastructure investment and public safety. Board Chairman and Kaiser Permanente Chairman and CEO Bernard J. Tyson welcomed both leaders to a packed room at Kaiser’s Oakland headquarters. Feinstein updated the Board on her efforts to ban assault weapons, an issue she has championed for decades. She also discussed the importance of making Deferred Action for Childhood Arrivals (DACA) permanent as well as her interest in leveraging public private partnerships to repair and rebuild the nation’s aging and crumbling infrastructure.

Investing to expand and improve the region’s congested transportation system was also a top issue as Feinstein emphasized the need for a new crossing south of the Bay Bridge. Tyson thanked Feinstein for her great leadership and urged Council members to join a business delegation we’re leading to D.C. in May to promote California’s importance to the nation as some critics frame the Golden State as out of control.

Feinstein also gave warm praise for Mayor Schaaf, who described the progress Oakland is making in turning around years of crime and addressing a complicated homeless problem. Schaaf also highlighted a measure she is championing for the November ballot—the Oakland Children’s Initiative—that would invest in expanding access to early education and other early childhood programs. She touted the huge returns that early childhood investments have in increasing employment opportunities and avoiding expensive social and public safety costs. This is an issue that has long been a priority for the Council, whose executive leadership has expressed early support for Schaaf’s November measure as she works to get it placed on the ballot. The Council extends its gratitude to Kaiser Permanente for hosting our meeting.

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THUMBS UP FOR NEW HOUSING THAT COUNCIL BACKED

It won’t solve the region’s housing crisis alone, but it was a step in the right direction as the Millbrae City Council Tuesday (March 13) approved a much-needed 400-unit development that the Bay Area Council had endorsed. The Gateway at Millbrae Station project has been years in the making. A great example of a mixed-use and transit-oriented development located next to BART, the project represents much of what Bay Area Council members look for in development projects and what all residents should support to advance smart and sustainable development. The Gateway at Millbrae Station project will provide 80 affordable units for low income tenants, as well as 320 apartments for middle-income workers. Uniquely, qualified military veterans will be given priority for 55 of the affordable apartments. The Council is thrilled that Millbrae City Council recognized our region’s staggering need for housing and chose to say, “yes, in my backyard!” To engage in the Council’s housing policy work, please contact Senior Vice President Matt Regan.