Surprise surprise: Bay Area deemed the least affordable region in the US (Los Angeles: low income, real estate)

[Lifeshadower]

Bay Area deemed least affordable region in U.S. - San Francisco Business Times:

A 40 percent drop in housing prices since 2007 has done little to make housing affordable for the vast majority of families in the Bay Area, according to a report, called "Priced Out," that the Urban Land Institute Terwillger Center for Workforce Housing released on Thursday.
Even after the housing meltdown of the last two years, just 20 percent of Bay Area housing stock is affordable to purchase by families earning 110 percent of area median income — about $100,000 for a family of four. While that is an improvement over 2007, when just 6 percent of the housing stock was affordable to an average working family, it still presents a crisis for the region, according to former Department of Housing and Urban Development Secretary Henry Cisneros.
“Things were so badly out of balance that it is going to take a lot more than the price drop we have seen to qualify more working families,” Cisneros told the San Francisco Business Times. “The Bay Area is the most stressed from an affordability standpoint in the country. It’s almost legendary how difficult it is for working families to live in San Francisco and Silicon Valley.”
The report concludes that only 15 percent of area housing stock is affordable to “workforce households,” compared with 50 to 60 percent in “peer metropolitan regions.” In the greater Boston area, 61 percent of the housing is affordable to workforce households; in the Washington, D.C., area the number is 65 percent.
The ULI Terwilliger Center for Workforce Housing defines workforce households as those with incomes between 60 and 120 percent of area median income, which is between $56,000 and $112,000. Approximately 30 percent, or 820,000, of the Bay Area’s 2.7 million households fell into this income range. The report used a 3.5 income-to-home price multiplier to determine the affordable home price for each income bracket and household size. So a family earning $100,000 could afford a $350,000 home.
Rentals a problem, too

The ULI report, prepared by the Robert Charles Lesser & Co., says that the picture is no better for Bay Area renters. More than 30 percent of rental households earning between $50,000 and $75,000 spend more than 30 percent of their income on rent. That is a higher percentage than New York or Los Angeles. And rents are not only high in the neighborhoods of San Francisco closest to downtown; even Napa County, which has the lowest rents in the greater Bay Area, has higher median rents than greater metropolitan Boston, New York, or Los Angeles.
Cisneros, now chairman of the development company CityView, says the dearth of housing for even middle class professionals is driving businesses from the Bay Area. CityView has developed or financed 7,000 units of housing in the past decade, including the 380-unit South City Lights in South San Francisco.
“It’s gotten to the point where it’s a serious business consideration — a lot of policy leaders need to understand this is a serious priority,” he said.
While prices in Boston drop quickly outside of desirable neighborhoods like Brookline, Newton and Cambridge, that is not the case in the Bay Area, according to study author Adam Ducker, managing director of RCL Co.
“The thing about San Francisco is that it’s pervasive,” he said. “It’s an expensive place to own a home and an expensive place to rent a home. You go to Napa and out in to Contra Costa and you have the same phenomenon. It’s not just junior fireman with a stay-at-home wife who can't afford housing — it’s dual-income folks with professional jobs.”
The solution can be found in a combination of policy changes and priority changes among developers, Cisneros said. Developers can do their share by efficiently designing dense projects with smaller, less expensive units. On the policy side, cities should set aside surplus public land — parking lots, mechanical yards, port-owned land, rail yards — for workforce housing.
Local government should rezone for more density for workforce housing, reduce development fees and expedite environmental reviews. If workforce housing is not made a priority, Bay Area developers will continue to focus on the luxury end of the market, as well as the 100 percent affordable projects that are funded through tax credits and other public money.
“I have heard developers so many times say that for the same amount of brain damage, I can build upscale and make more money,” said Cisneros. “The harder the city and its policies make it to build housing, the more likely it is that what does end up built will be upscale.”

I heard that this revelation was also compounded with 'water is wet' and 'touching hot things hurt'. However, its not very surprising though. Thoughts?

[Tallysmom]

I still have real issues with the Terwilliger place -- they have a vested interest in building "affordable" housing.

So yeah -- we are pretty high, and all the stuff that goes along with it, but their vested interest makes me suspicious of every thing they write...

[Mach50]

'Rocks are hard' too

Obviously...

Yes housing in the BayArea is still out of reach and out of control. I agree more dense housing needs to happen and/or high speed trains to outlying adjacent areas to spread the growth.

See Long Island, NY as an example:



http://www.mta.info/lirr/images/lirr.gif (broken link)

Compare to:
http://www.bart.gov/images/global/system-map26.gif (broken link)

[andyadhi01]

Well it is obvious that this is going to happen if the bay area never builds anything. The existing owners don't want anything built here. So there is great imbalance between supply and demand.

[Mach50]

Originally Posted by andyadhi01

Well it is obvious that this is going to happen if the bay area never builds anything. The existing owners don't want anything built here. So there is great imbalance between supply and demand.

I don't want the Bay totally built in either, yet with the current density I don't see housing getting much cheaper here. Build out or Build up is the choice, you can only build up so much here. That means precious trees need to fall.

[Tallysmom]

Originally Posted by Mach50

I don't want the Bay totally built in either, yet with the current density I don't see housing getting much cheaper here. Build out or Build up is the choice, you can only build up so much here.

Hey -- come on over to Oakland. We have some incredible prices on real estate.

And a lot of good people buying in will push out the bad...... it's called regentrifying.

And although part of me is kidding, another part of me is wishing you all would!!!

[bellalunatic]

Spot on Tallysmom!
Mach50, yes rocks are hard.
But comparing Long Island LIRR to BART is completely bizarre. Way too many different variables on there to even compare.

There has been a systematic removal of affordable, low income and workforce housing out of SF since the '89 Loma Prieta.

The city used that earthquake as an excuse to remove people and projects out of the city limits, for the most part, and replaced them with less dense housing. Add into that the unexpected dot com explosion in the mid to late 90's and well, here we are.

Frankly there have been tons of stuff built over the past couple of decades, barely any of it workforce housing of course, but baseball stadiums and high rise "loft" buildings..

This is for sure a slanted "duh" moment type of article.

You could see this coming ages ago....

[Mach50]

Bizarre? Yes there are more physical limitations to trains here than say LI or NJ. But it can be done and is done. Manhattan is out of reach for much of the workforce but luckily for the workforce there, they can take a train for pretty cheap and still live in an affordable area outside the city.

Don't take the comparison so literally, it is not like the LIRR is some new concept of urban to suburban linkage.

[Mach50]

Originally Posted by Tallysmom

Hey -- come on over to Oakland. We have some incredible prices on real estate.

And a lot of good people buying in will push out the bad...... it's called regentrifying.

And although part of me is kidding, another part of me is wishing you all would!!!

Oh I am fine over here on the Peninsula for now, however, it would be cool to see some of these up and coming areas of Oakland. Perhaps start a new thread and give us some locations? I'll admit I never get over there, but I want to take my daughter to the Oakland Zoo and Fairytale land so maybe I can peruse the area.

[hsw]

SF and NYC regions were also "least affordable" in '70s and '80s
Smart, hard-working people have known this for decades...and figure out how to earn more money and/or start a useful, valuable business (and raise/educate their kids to figure it out quickly for their own futures)
Or move to the mythical place with high QOL and low COL...and an economy w/high-income jobs and new, lucrative businesses

If anything, SV's tech advances have enabled more efficient outsourcing; telecommuting; and lower-paid low-skill workers to perform back-office tasks like accounting/IT support, etc from lower COL suburban Dallas or Bangalore, not PaloAlto area

Any place with a powerful economy and high QOL (for affluent) will have high COL and low QOL for economic underachievers....Capitalism 101
But poverty and economic immobility are largely lifestyle choices...and life has never been "fair", even in commie places