By David M. Greenwald
The report is not surprising but it is stark. A report this week on Bay Area housing costs showed that a significant majority of the extremely low-income households living in the Bay Area spend more than half their earnings just to pay rent. This leaves them extremely vulnerable with “little money to pay for other necessities, such as food, transportation, diapers, and other necessary bills and household costs.”
In advance of the release of the May Revise by Governor Gavin Newsom, affordable housing advocates are renewing a push for more affordable housing funding as the newest set of reports from California Housing Partnership “provides a glimpse into the reality of people living and working severely housing cost-burdened in the Bay Area.”
Across the nine Bay Area counties, the report found “nearly 70% (69.6%) of extremely low-income households are severely cost-burdened, meaning they spend more than half of their income on housing costs alone. This is compared to the only 1% of moderate-income households on average in the Bay Area who are severely cost-burdened.”
The median rental prices for each Bay Area county are “out of reach for working people earning the minimum wage (and beyond), as the median rental price in each county requires a wage of at least $31.43/hour—and up to $55.69/hour in San Francisco County.”
Moreover, there is a sizable shortfall of over 200,000 affordable homes in just those five counties.
“The severe shortage of affordable housing in the Bay Area, along with the fact that the state budget currently contains a historic surplus, clearly demonstrates that state lawmakers have a unique opportunity and moral incentive to prioritize the production of affordable homes now,” said Pedro Galvao, Non-Profit Housing Association of Northern California (NPH) Policy Director.
Advocates say these reports underscore the severe housing cost burden experienced by those with extremely low incomes. But they also believe there are opportunities for meaningful change that can advance housing justice for all our neighbors, regardless of their race or income.
The NPH for example is recommending an investment of $3 billion “in order to clear the California Housing and Community Development (HCD) backlog of shovel-ready affordable housing developments and start building today—creating desperately needed homes for Bay Area workers.”
They would also like to see an investment of $18.5 billion in a pilot program for the Bay Area Housing Finance Authority (BAHFA), “so it can begin its critical work of addressing the region’s housing and displacement crises.”
“It doesn’t have to be this way,” said Amie Fishman, NPH Executive Director. “We already know what must be done to make real progress toward housing justice, which includes preventing homelessness, producing more affordable housing, preserving existing affordable housing and long-standing neighborhoods, and protecting tenants from displacement.”
She added, “What is needed now is the political will and courage to do what is right for all of us. Because when our neighbors thrive—especially our Black, Indigenous, Latinx, Asian, and all people of color neighbors, who suffer disproportionately from exclusionary housing policies—we all thrive.”
The report also calls for statewide policy recommendations designed to provide relief to low-income families struggling with unaffordable and unstable housing.
Among these are a call to initiate around $10 billion in a statewide housing bond which would fund another five years of affordable housing while permanently funding local governments to implement flexible homelessness solutions by recapturing $2.4 billion per year lost through corporate tax loopholes and reductions.
They would also like to make permanent the $500 million expansion of the state’s Low-Income Housing Tax Credit which they believe would “increase affordable housing production through public/private partnerships.”
“As state leaders prepare to finalize the coming budget, we urge them to also set clear long-term goals so that the uses of this year’s surplus are framed as down payments on the sustained investments at scale that our region and state need,” said Matt Schwartz, President and CEO of California Housing Partnership. “The Roadmap Home 2030 offers four clear goals with a long-term path to end homelessless, close the affordable housing gap, protect low-income workers, and advance racial equity.”
—David M. Greenwald reporting
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It would be interesting to see how rent control plays into the picture, in places like San Francisco. I know someone who pays less in rent (in a desirable neighborhood, in a spacious flat) who pays far less than many homeowners do on property, parcel taxes and CFDs. Even when compared to much less-expensive places, outside of the Bay Area.
And (unlike Affordable housing), there are no “income limits” associated with rent control. As such, it does not “trap” anyone into limiting their income over time, to maintain eligibility.
Where is this number coming from? And, isn’t the issue one of cost, rather than shortage – especially as it relates to “extremely low-income?
Ron O:
You point out very real problems in the discussions on Affordable Housing… kudos (seriously!)
The first, is not making the distinction between “affordable rental” vs. “affordable ‘for sale'”… I tend to support affordable housing, but not as an ‘entitlement‘ to be able to own your own place, at the subsidy of others…
The second is what ‘housing’ means (rental or for sale) as to space, and amenities… I grew up in a 850 SF house, built two years earlier (2 bd, 1 ba, 1 car garage)… Dad and Mom bought it, at a real stretch to ‘affordability’, at the time… one income household, either low middle class, or somewhat less… in today’s dollars, probably would have qualified as ‘low-income’, but not very low income… it was fine.
Some want the low, very-low income housing to be home-ownership, with all the living space and amenities to be “equal” to market rate, but “affordable”… I am not one of those, and am not very sympathetic to those concepts.
Reality is (for me), decent (not necessarily any “bells and whistles”) affordable rental housing should be available… ownership housing a goal, but not anyone should feel “entitled to“…
So, does that make me a conservative, liberal, or just an a$$?
Thanks.
Also, as to your point regarding the size of housing (today, vs. prior years), that is indeed true – at least for “middle-class” families. And yes, it was a stretch for many to afford it, and probably without anyone publishing statistics regarding percentage of income used for housing, etc.
Family sizes were also larger on average, as well. And often times, only one income in the household supporting that family (as noted in your example).
Affordable Housing is subsidized housing and helps no class of people overall, but only distorts the market and takes money out of the system overall, feeding the bureaucracy and taking money from the people .
–Extreme Conservative Miller
Alan, it depends on how Affordable housing is funded. The model that has been favored in Davis of using market rate housing to subsidize Affordable is essentially a tax on home buyers and renters. But if its done with Federal dollars as an anti-poverty program Affordable housing can be an answer.
Fed money is unlimited and from God itself, not taxpayers (or their great-grand-children)
Embrace your inner dark side/underbelly. 🙂
Don’t fight it, “Luke”.
An expanded Section 8 type of program is a much preferable approach with less bureaucracy and impediments. Trying to target a product to a narrow subpopulation is always difficult and particularly so when new housing construction is so expensive. Much more cost effective to figure out how to open up our rather large stock of existing affordable housing stock in duplexes.
Funny thing about economics–one thing is always linked to another thing. In this case, the shortage is driving the higher cost. Cost is not an independent variable and never is.
For “extremely low income” folks (as discussed in the article itself), it’s never about supply, in an already-expensive area. In terms of cost, at least.
These folks are already living somewhere. The complaint is that they’re paying too much for rent, compared to their income.
Increasing the supply of Affordable housing does not ensure that the new housing would be occupied by (current) low-income residents. Unless those folks “move” from their existing (presumably-expensive) housing, building more Affordable housing may simply result in an increase the total percentage of low-income residents in a given locale.
For those (like Richard) who believe that this is a “supply” issue (in terms of the broader real estate market), how much do you believe that market-rate rent would be “reduced” by constructing 200,000 Affordable housing units in the five counties listed in this article?
And, would your “reduced” market-rate rent then be affordable to extremely low-income households?
Let’s see some (even rough) calculations/analysis.
And again, are you assuming that existing, extremely low-income households (who already live and/or work within those 5 counties) would then occupy those units? What basis do you have for that assumption?
You’d think that at least some kind of analysis would be presented, before advocating this approach.
And, you’d think at least some kind of analysis would be presented, before discounting that approach… works both ways…
Just a reminder: there is a limitation on comments per article—five comments per article per commenter.
“I’d rather drink muddy water and sleep in a hollow log,
Than to stay in the city be treated like a dog.”
Jerry Garcia
Jerry came to those lyrics late. Jimmy Rogers and Blind Lemon Jefferson both recorded them in the mid-1920s, and they likely go a lot farther back than that.
9.3!
I was about to say! Much respect, JF