New Data Highlights Astronomical Costs for Building Affordable Housing
It’s no secret that building housing in the Bay Area is expensive, but new data shows just how jaw-dropping those costs are. According to the 2019 California Tax Credit Allocation Committee, the average construction cost of new below market rate housing in the Bay Area was $664,455 per unit. At $737,417 per unit, San Francisco had the highest per unit cost of construction in the Bay Area. San Francisco is often regarded as the most expensive place to build housing, and this holds true in 2019. In comparison, the average cost for building below market rate housing in the rest of California outside the Bay Area is $385,185 per unit. Projects in Santa Clara County and Sonoma County were below the Bay Area average, with average values of $621,517, and $497,360, respectively.
Skyrocketing land prices driven by restrictive local zoning policies play a big role, along with excessive local fees, onerous regulatory requirements, and local opposition that leads to costly delays. Easing these cost drivers is among the Bay Area Council’s top policy priorities, including a range of legislation aimed at reducing fees, easing regulation, reforming outdated zoning and holding cities accountable for meeting their housing needs. The Council is also a leading champion of reforms to make building lower-cost accessory dwelling units (ADUs) easier, faster and less costly. To engage in the Council’s housing policy work, please contact Senior Vice President Matt Regan.