The newest Legislative Analyst’s Office report shows a continued trend: California housing is becoming increasingly unaffordable, and in fact the trend is accelerating. But while affordability is slipping statewide, the impact is even sharper in Davis — not just because of market forces, but because local land-use choices have helped throttle the supply of housing, leaving the community especially exposed to rising costs.
The report states that “housing costs in California have long been higher than the national average. In recent years, these costs have grown substantially—in some cases, growing at historically rapid rates.”
For a newly-purchased mid-tier home in California, the LAO reports that the average monthly payment now exceeds $5,500, a roughly 74 percent increase since 2020. A bottom-tier home now costs over $3,400 a month to carry—up about 78 percent in that same period. The LAO also found, “Median Household Income [is] Lower Than Income Needed to Qualify for Mortgage on Bottom-Tier Home.”
That is the turning point. For decades, the California housing story was simple: expensive, but doable. Now, for the first time, even the cheapest entry into the housing market requires income beyond what the typical household earns.
The LAO also notes, “Monthly Home Payments Have Grown Much More Than Wages and Rents.” Since January 2020, wages statewide have risen roughly 25 percent. Meanwhile, housing costs have risen at two to three times that rate.
Renters haven’t escaped the strain. Statewide rents increased about 42 percent over that same time period. In Yolo County, cumulative rent growth sits at 26.6 percent since 2020. That number looks modest next to the Bay Area, but it is still high enough to shift the financial stability of thousands of households.
For homebuyers, Yolo County stands out. The county has seen a 65 percent increase in the cost to purchase a bottom-tier home since 2020. Though the county ranks 19th statewide by some affordability measures, that ranking masks the concentration of pressure in one place: Davis.
The LAO report states, “Housing Costs Vary by Location, Especially for Homebuyers.” In Davis, the cost curve isn’t just steep—it’s exclusionary.
UC Davis drives demand. The school district remains one of the strongest draws in the region. Growth controls, land-use restrictions and a decades-long pattern of limited residential development have created a housing shortage that predates the current crisis. And because Davis doesn’t build enough housing to match its jobs, education base and regional desirability, the cost burden compounds every year.
This isn’t occurring without state-level awareness.
Journalist Mark Kreidler wrote, “California’s housing crisis didn’t begin on Gov. Gavin Newsom’s watch. But it’s fair to wonder whether Newsom will be able to claim any significant progress in the area he’s made so central to his agenda by the time he leaves office in early 2027.”
According to Kreidler, Newsom “has signed dozens of bills designed to jump-start the production of housing.” Many of those laws—SB 35, builder’s remedy, ADU fast-tracking, density near transit—although seemingly written for places like Davis, have not made much in the way of headway.
Yet Kreidler notes that, despite legislative output, “home prices and their accompanying mortgage payments have run away from residents over the past five years, making homeownership more elusive than ever.”
The statewide pattern is visible everywhere in Davis. First-time buyers — historically teachers, UC staff, young families and public workers — now find themselves priced out before they can even qualify for financing. Students graduating from UC Davis can’t reasonably imagine staying unless they find roommates, subsidies or inherit equity. Workers in essential services — nurses, paraeducators, food service workers, childcare staff — often commute in because the community they serve has become economically closed to them.
That shift reshapes the city.
School enrollment declines. We see that in DJUSD’s long-term demographic projections and in the growing debate over school closures. As fewer young families can afford housing, the system loses students and loses funding — and once a school closes, it rarely reopens.
Some observers point to declining birthrates as evidence that long-term housing demand may ease, but research shows the trend is tied directly to affordability — meaning falling fertility is a symptom of the crisis, not a solution to it.
A study cited by Newsweek found that rising housing costs since 1990 were responsible for about 11 percent fewer children and accounted for roughly 51 percent of the U.S. fertility decline between the 2000s and 2010s.
The researcher concluded that the “supply of housing suitable for families can meaningfully contribute to demographic sustainability.” In California, the connection is even clearer.
Demographer Dowell Myers told CalMatters, “The major factor that makes California different is housing prices. There’s really not much else that is different.”
Commuting distances increase, pushing workers farther into Woodland, Dixon, Vacaville, Winters and beyond. That means longer travel times, fewer ties to the community and increased emissions — even as Davis brands itself environmentally responsible.
Thus there’s also a climate cost to the affordability gap. As more workers are pushed out of Davis and into surrounding cities, commute distances increase, vehicle miles traveled rise and emissions go up.
For years, California has argued that infill housing and shorter commutes are essential to meeting state climate goals, yet the opposite is happening on the ground: the people who work in Davis are driving farther because they can’t afford to live here.
The result is a pattern that undermines local environmental values — a city that identifies as climate-forward but exports its workforce and imports its emissions.
The labor pool tightens. Employers in education, healthcare, public services and local businesses struggle to hire. Those who want to live where they work cannot afford to. Those who can afford to live here often earn incomes far beyond local job scales.
And civic participation changes. When a community’s cost structure skews toward wealthy homeowners and long-term property holders, political priorities shift with it — often away from policies that support newcomers, workers, students or families and toward policies that preserve existing conditions.
Housing policy in Davis has been framed for years as a binary: growth versus preservation, farmland versus expansion, neighborhood character versus density. The data now show that the real tension is something else: affordability versus exclusion.
Local resistance to development is not simply a philosophical disagreement about growth. It is, in practice, a sorting mechanism — deciding who can afford entry and who cannot.
Davis is increasingly becoming the type of college town where students attend but can’t stay, where workers serve the community without belonging to it, and where the only viable route to homeownership is wealth, inheritance or luck.
The LAO report doesn’t offer solutions. It doesn’t argue. It doesn’t moralize. It documents.
What communities like Davis choose to do with that documentation will determine whether the trend continues.
Davis will have opportunities to change course in 2026, but doing so will require something the community has historically resisted: approving major housing development.
Two pivotal projects — Village Farms and Willowgrove — are expected to go before voters, and the outcome will determine whether Davis begins addressing its housing shortfall or continues down the current trajectory.
The state is no longer passive on this issue.
With a strengthened Housing and Community Development enforcement arm and new legal precedents limiting local veto power, cities that fail to plan or permit adequate housing risk losing control over their own processes.
If Davis rejects both projects, it won’t freeze the city in place — it will invite state intervention and put the future of Measure J at risk.
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Funny, you need an LAO study to tell you what I’ve been saying for years. Admit it David, you have long been wrong about Measure J, the boomer choke hold of exclusion. I’m still waiting for your mea culpa.
I don’t need the LAO Study, the LAO is further confirmatory information and as you will see later, a lot of people will question the findings.
“. . . a lot of people will question the findings.
They might question it, if you actually posted links to what you’re referring to (not the first time your failure to cite your source has been noted).
There is no LAO study “for Davis”.
Housing prices are DROPPING in the region.
I like how you constantly conflate affordability with supply. Supply (inventory) has been INCREASING.
Housing prices had been rising the fastest in the country in communities which pursued growth. This is now drastically reversing.
Neither UCD nor Davis are increasing the number of its employees – the only actual driver of demand.
Monthly payments have been rising in the last few years, mostly due to rising interest rate costs. (There’s also other housing costs that have also been increasing, such as insurance, parcel taxes for the local schools, etc.)
From article above: “A study cited by Newsweek found that rising housing costs since 1990 were responsible for about 11 percent fewer children and accounted for roughly 51 percent of the U.S. fertility decline between the 2000s and 2010s.”
(Stop it – you already had me “sold” regarding this self-correcting problem even before you cited this.)
But here’s a question for you: Are you claiming that the entire country is full of growth-restricting NIMBYs, regarding this apparent national statistic? I ask because the facts show the EXACT OPPOSITE – most communities actively pursue sprawl and growth. Which means that housing prices nationwide had been rising for reasons OTHER THAN lack of “supply”. It also means that there’s other reasons young people are increasingly deciding not to replace themselves.)
There is, in fact, no way to “prove” (one way or another) any of this. Polls can provide some indication, but they’re often biased, inaccurate, and not designed correctly.
Ron O
It’s a combination of many factors that drive growth for housing and for jobs. Regional growth is driving housing demand, and school and community quality plus house supply restrictions in Davis create a 50% price premium over neighboring cities. There’s no simplistic explanation as much as you would like there to be one.
And of course housing prices are coming down–mortgage rates have more than doubled since 2021. The remarkable fact is that housing prices have not decreased as much as they should have given the rise in interest costs. As I pointed out in May this year, house prices are now 60% higher when adjusted for interest rates than they were in 2021. That tells us that housing costs are still rising, not falling.
And yes, as I’ve posted several times, many studies show that the country is full of NIMBYs who are restricting housing supply which is creating the affordability crisis. Communities where there are jobs are NOT actively pursuing sprawl and population growth–they are pursuing job growth, but not providing the needed housing.
So the fall in fertility is being caused by our restrictive housing policies, like the current form of Measure J/R/D.
Note that the builders’ remedy is being imposed in more and more places. Kiss goodbye to local control if Davis doesn’t correct its ways.
I don’t question the findings. My questions revolve around, (1) why the developers don’t propose added supply that matches/addresses the housing shortage in Davis … $500,000 starter homes for young families with 1 or at the most 2 children, and (2) why the City Council and City staff seem content with virtue signalling rather than actually creating incentives for developers to build $500,000 homes.
Regarding (2) there are two specific changes that would go a long way toward actually improving housing social justice. The first is a return to the old City policy of only issuing building permits for market rate homes at the same proportional speed as building permits are issued for the Affordable homes contained in the development agreement. The second is to modify the fees and permit costs for a development to be by the acre rather than by the lot. In the current system if a developer chooses to build two houses on two individual lots of the same acreage as building a single house on one lot, the fees and permit costs are doubled up. That creates a clear financial disincentive for developers to build affordable homes.
Good ideas to consider.
Ron G
If you’re looking for total capitulation to the exploitive free market, that’s not coming. A modified Measure J/R/D will give leverage to citizens to get developers to modify their proposals. A major modification is already in the winds.
The LAO report is one piece of input, but not the only piece released lately.
First-time homebuyers are getting older and older and older.. The National Association of Realtors released new data that shows that over the past year, “the typical age of a first-time buyer reached a record high of 40,” That is 7 years older than the typical first-time buyer age of 33 just four years ago. In addition the data shows that Housing market turnover, which should make entry-level home available, has ground to a halt in recent years. The report states that high borrowing rates and soaring prices has made a traditional starter home increasingly unaffordable, forcing younger buyers to delay their purchase until they can actually afford the annual housing costs incurred when buying a home. If this trend continues age 40 will continue upward toward the mid-40’s in the coming years. The report sums that up by saying, “Welcome to the age of the geriatric homebuyer.”
I would like to add a friendly amendment/addition to the report’s findings, which I will phrase as two questions. Specifically, (1) “How many children do you expect a first-time buyer household of average age 40 to have? and (2) “What ages do you expect the children of a first-time buyer household of average age 40 to be?”
“(2) “What ages do you expect the children of a first-time buyer household of average age 40 to be?””
I expect them to be 50.
One reason that first time home buyers are getting older is cost of housing.
Buying a house should not be a goal for most young people (e.g., under the age of 35). They’re often not established in their careers (or location), have little money saved, are still paying off student loan debt, etc.
A good way to lose money is to sell, move and buy a new home. The costs associated with that are astronomical.
The term “starter home” should be eliminated from our vocabulary. There’s only homes – not starter, middle-age, or senior homes. (Actually, I have a pretty good guess as to who is behind that term – the same ones who call it an American Dream, etc. In other words, the same industry that is guaranteed to make money on each transaction – regardless of downturns in the market, etc.)
Lately, I’ve been looking at motorcycles, and am surprised to see that terminology spreading to that field, as well. (If you think a motorcycle is “too powerful” for you, try to avoid opening the throttle all the way. Or better yet, don’t buy one at all if you’re than inept.)
My guess is that the same type of interests are behind the term “starter motorcycle”. Again, that term didn’t even exist when I was young – except for mini bikes/child-sized motorcycles.
This type of terminology is a sales tactic.
Much of the new housing in VF and WG should be 3 bedroom rentals for families as a starter home. That will ensure that they will move up and out making room for another family.
(1) “How many children do you expect a first-time buyer household of average age 40 to have?”
2.
(2) “What ages do you expect the children of a first-time buyer household of average age 40 to be?”
9 and 6.
2 doesn’t isn’t at replacement levels, and neither is the 1.6 (nationwide).
From a brief online search, it appears that it’s 1.48 in California (as of 2023).
But interestingly-enough, it’s slightly increased (from what it was) in “oh-so-expensive” San Francisco. My guess is that housing in San Francisco is much cheaper than it is in Davis – since cheap housing causes/creates kids, per the theory put forth on here.
In other words, the people who can least-afford it are the ones who “should” have kids per the arguments on here.
But seriously – there’s never actually been any type of logical argument whatsoever, regarding a forever-increasing population.
In any case, it appears that (“ahem”) immigrants are keeping the birth rate from dropping even further (despite legal status, income, housing costs, etc.). Then again, it’s Asians leading the percentage increase (who are probably in the country legally – for the most part).
https://www.sfchronicle.com/bayarea/article/sf-births-20161214.php
Thank you for the response Don. Here is some additional data on that question:
National Health Statistics Reports
Number 179 January 10, 2023
In 2019, the last year of National Survey of Family Growth (NSFG) data presented in this report, vital statistics data indicated that 3.7 million births occurred in the United States; the number of births declined steadily during 2007–2013, increased slightly in 2014, and decreased again from 2015 to 2019 (1). From 2018 to 2019, the birth rate (number of births per 1,000 females in a specific age group) decreased for teenagers aged 15–19 and women aged
20–34 but increased for women aged 35–44 (1). Between 1976 and 2018, the mean number of children ever born per
woman aged 40–44 declined, from three children to two.
Early childbearing, particularly in the teen years, is associated with negative social, economic, and health consequences for the young woman and her child.
Table 1 of the report shows the percentage of men and women who ever had a biological child by selected demographic characteristics. In 2015–2019, 56.7% of women and 44.8% of men aged 15–49 had ever had a child.
The percentage of women aged 40–49 who ever had a biological child decreased with additional education, from 95.3% of women with no high school diploma or GED to 78.2% of women with a bachelor’s degree or higher.
Table 2 of the report shows the percent distribution and mean number of children born alive to women aged 15–49 by selected demographic characteristics. Among women aged 15–49 in 2015–2019, 43.3% had not had a biological child, 16.2% had one child, 21.7% had two children, 12.6% had three children, and 6.2% had four or more
children at the time of the interview. The mean number of children ever born to women aged 15–49 in 2015–2019
was 1.3.
The mean number of children ever born for women aged 15–44 in 2015–2019 (1.1) was lower than the mean for women in 2011–2015 (1.2).
How many school-age children do you think would be provided by the build-out of Village Farms and Willow Creek?
That question would be better phrased as, “how many school-age children would be provided at first – and then how many as the first homeowners aged-out”?
And how many are ALREADY attending DJUSD, as out-of-district students?
Of course, either answer would likely be “more than there are”, now.
But another question you might ask is, “what is the impact on the school districts that these kids would otherwise be attending”? Might that contribute to their own declining enrollment figures – depending upon where these “poached” kids would be coming from?
That is, unless you believe that those two housing proposals would “produce” (create) kids that wouldn’t otherwise exist.
(Your question seems rather Davis-centric.)
“Your question seems rather Davis-centric”
Shocking
It is shocking when those who claim it’s “for the kids” don’t care about ALL kids – including those in districts that they might negatively impact as a result of their housing advocacy.
Oh, well – who cares about those left behind anyway, right? That’s THEIR problem – and THEIR school district’s problem.
As long as it enables DJUSD to avoid rightsizing, all is right and relevant as they say.
Keep in mind that DJUSD is stating that BOTH proposals would need to be approved, for them to avoid taking responsibility to rightsize. Good luck with that.
All I know is that if I was a relatively new teacher, I’d be dusting-off the “old resume”. (And not just in Davis.)
They have time this week to do so, since (unlike everyone else with a job) – they have this entire week off I understand. And if not now, winter break, spring break, summer break, etc. :-)
You’ve convinced yourself of some pretty convoluted stuff, that’s for sure. And then you forget where you are.
Forget where I am, you say?
There’s a reason that WJUSD didn’t build the planned schools in Spring Lake (and probably aren’t going to do so at the technology park, either – with its 1,600 planned housing units). (In addition to ongoing construction within the original footprint of Spring Lake.)
There’s an organized group of parents in Spring Lake that are beyond angry, regarding the abandonment of planned schools – and have been for years. I think they’ve given up at this point.
But it’s not just Woodland, regarding where the kids would come from if new housing developments are built on farmland adjacent to Davis.
That is, unless you believe that said housing “creates” kids that wouldn’t otherwise exist.
Guess what this is a Davis focused comment section.
Obviously, I’m pointing out that what Davis does impacts others (as you often do, when you state that Davis isn’t “keeping up with” the sprawl that the rest of the region pursues).
But if you’d like, we can turn this back into the reason that Davis should pursue sprawl so that the district doesn’t have to rightsize, if you’d prefer. That alone (without even considering the impact on other districts) is among the dumbest, most-irresponsible, and most-selfish ideas ever put forth on this blog. You don’t let civic supporting systems (such as oversized school districts, police departments, or fire departments) determine the size of a town.
The city determines its destiny regarding that – not school districts.
And the state doesn’t care about the excessive size of a school district either, in regard to its own fake targets.
Obviously, you’re speaking to an audience that’s not gonna be swayed by that argument.
Obviously, you’re not the intended audience of my comments. (I wouldn’t even waste my time at all on here, if you were.)
This blog is readable by anyone.
If it’s any consolation, DJUSD is not the only district “kicking and screaming” about the declining need for schools. (Though like DJUSD, they prefer to avoid the actual issue.)
The universal issue isn’t “not enough kids” – it’s “too many schools”.
Honestly, you don’t hear prison, logging, or coal mining towns making this much fuss when their ENTIRE INDUSTRY shuts down due to “declining need”.
The question was for Matt. Hopefully he’ll see it and we can continue the conversation.
Ron O
You’re not part of the conversation about determining the destiny of Davis because you are a resident of Woodland with no discernable interest in Davis. We can’t trust that you have the best interests of Davis in mind–you’re just an outsider, not a valid stakeholder.
The number of children depends on the housing mix composition. A bunch of 3,000 sf McMansions will produce very few; affordable 3 bedroom multi family units will produce many. In addition, larger expensive houses will produced high schoolers who won’t be here long while smaller affordable ones will bring elementary school students.
Ron O.
Don’t get discouraged from commenting because many of us appreciate your views on Davis and its housing policies. You don’t have to live in Davis in order to have an interest in it or be a stakeholder.
No, given the age of mothers at first birth (27), the ages of those children will be 13 and 10. That means that the oldest will already in junior high on their way to high school. The new owner will be an empty nester in less than 8 years. That’s an important consideration for the school district when advocating for these developments. The district needs to be much more discerning about the type of housing that is being built.
In 2023, as mother’s educational attainment increased, so too did the average age at first birth.
“The youngest average age was among women who had less than a high school diploma/GED with a mean age at first birth of 21.4 years. This is more than six years younger than the average among all first-time mothers (27.5).
About half of women ages 25-34 have a bachelor’s degree (Hurst, 2024) and the average age at first birth for women with a bachelor’s degree was 30.3.
The oldest average age was among women who had earned a doctoral or professional degree. Their mean age was 33.1 years, more than five years older than the average among all first-time mothers.”
https://www.bgsu.edu/ncfmr/resources/data/family-profiles/FP-25-29.html
Richard says: “The district needs to be much more discerning about the type of housing that is being built.”
I didn’t realize that the district has any authority or “say” in the type of housing (if any) that is built in the first place. Really, you’re also going to ask them the type they’d “prefer”?
Did you ask them if they want French Fries with that order?