SACRAMENTO — The Sacramento region is building housing at rates not seen in nearly two decades, but affordability continues to worsen for many households, according to the newly-released 2025 Regional Progress Report from the Sacramento Area Council of Governments.
The report found the region completed more than 12,500 new homes in 2024, representing the highest annual total since 2005. The report states that “the more than 12,500 housing units completed in the region last year (2024) represent a near two-decade high in new housing construction.” The level of construction also exceeded the near-term housing growth projections in the 2025 Blueprint plan, which guides long-term planning and development across the six-county region.
SACOG reported that the Sacramento region has outpaced every major California metro area in housing production when adjusted for population. According to the findings, “when adjusted for population, the SACOG region has led California in housing production not just this year, but for eight years in a row.” The region has also led production in 18 of the last 24 years tracked.
The construction surge includes significant shifts in housing type. Historically, most new housing in the region consisted of large-lot suburban single-family homes. Recent trends show development is diversifying. The report notes the Sacramento region achieved a record number of attached units last year, stating that “the roughly 4,000 attached housing units (such as apartments, townhomes, or condos) completed in the region in 2024 are the most of any tracked year.”
Small-lot single-family construction and accessory dwelling units also climbed. New accessory dwelling units reached their highest levels since tracking began in 2018. The report notes that ADU development is now 15 times higher than it was before statewide legal and regulatory changes encouraging their construction.
Much of the shift is tied to infill development, particularly within designated Green Zones identified through the region’s Green Means Go initiative. These areas are locations where cities have pre-planned for growth but faced barriers such as high costs, environmental remediation needs or infrastructure gaps. SACOG reported “the more than 3,300 units completed in Green Zones in 2024 represent the highest total (and highest share of total units) to date.”
Green Zones accounted for more than one-quarter of all new units built last year, and nearly 80 percent of that housing was attached or higher-density housing. The report characterizes those trends as evidence of local planning efforts yielding tangible results after years of zoning reform, environmental streamlining and infrastructure investment.
Despite the increased supply, the report warns the region is still falling significantly short of meeting long-term housing needs, particularly for lower-income households. It states that “despite the impressive recent uptick in housing production, the region has a long way to go in tackling a housing shortage decades in the making.”
Affordability remains a core challenge. While home prices in the Sacramento area remain lower than in coastal California regions, they are high compared to similar midsized regions across the country. The report states “with home values around $600,000, and rents at $2,300 a month, the Sacramento region has some of the highest housing costs of its midsized peer regions group (second highest home prices and third highest rents of the peer group of 17 regions).”
Housing costs have risen faster than wages over the past decade. SACOG reports that the ratio of home price to income climbed sharply, noting that “in 2012 the typical home in the area was valued at about 3.75 times the median regional income. In 2022 this rose to more than 6.75 times.” While the ratio dropped slightly in 2023 to about six times income due to modest income growth and a temporary decrease in housing prices, the region remains far outside lending benchmarks traditionally associated with affordability.
Rents have followed similar patterns. The report finds rents rose nearly 30 percent in the last five years, although rent inflation slowed compared to other midsized peer regions across the U.S.
Affordability gaps remain most severe for renters and households of color. The report notes that “well over a third of households in the SACOG region are considered housing cost burdened, or those paying more than 30 percent of gross income to cover housing costs.” The share is significantly higher among renters and Black and Latino households.
According to the data, more than half of all renters are burdened by housing costs, nearly double the rate of homeowners. The report also found that “more than half of all Black households in the region are housing cost burdened.” These disparities have remained largely unchanged over more than a decade of tracking.
Progress has been made in subsidized and income-restricted housing production, particularly in the past three years. The report notes that, in 2024, “more than 20 percent of new units in the region served the low and very low income categories, an all-time high in the series.” However, taken over a longer timeframe, only about 5 percent of new housing built since 2018 has been accessible to low-income households.
Homeownership trends show similar barriers. The report states disparities by race and ethnicity in homeownership rates “stand little changed from 2009,” reflecting long-term structural inequities and rising barriers to entry as prices climbed.
While the report highlights progress in planning and production, it also raises concerns over rising interest rates, development costs and uncertainty in private construction markets. The report points to economic volatility and warns that recent production gains could reverse without continued policy and financial intervention.
The report includes data and analysis spanning Sacramento, Yolo, Placer, El Dorado, Sutter and Yuba counties and 22 incorporated cities. SACOG will continue tracking data through its Regional Indicators Dashboard.
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“in 2012 the typical home in the area was valued at about 3.75 times the median regional income. In 2022 this rose to more than 6.75 times.”
Of course 2012 was the bottom of the housing bust. But leaving that aside mortgage interest rates are about twice what they were in 2012. What is sad is that Davis didn’t build when market forces and interest rates would have produced lots of housing had it not been for the local control you so zealously support AKA Measure J.
So apparently, you can’t sprawl your way to affordability – according to this article.
But yeah – probably should have bought a house anytime between 2009-2012.
Then again, we’re on the roller-coaster back down, again (since around 2023).
Just remember: Buy high, sell low – the secret to wealth. Lots of people follow that advice. (How’s Bitcoin doing, now?)
“So apparently, you can’t sprawl your way to affordability – according to this article.”
Where does it say that?
In the headline, and throughout the article.
You’re not familiar with Natomas, for example?
The entire city is a sprawling mess. There are some nice areas of Sacramento, but a lot more that should just be plowed-under and returned to farmland (see Arden Arcade). If someone can’t afford a house in that latter 6-lane arterial street hell-hole (assuming they even want one), there’s something wrong with THEM – and not with a housing shortage of ANY type. Honestly, it’s almost frightening driving through there (in more than one way).
To be accurate – the article does not mention sprawl, it specifically mentions infill. I am not arguing that you can’t sprawl your way to affordability. SACOG is not making that argument. That is Ron O’s conclusion from this article, not something I am claiming.
You might “prefer” the article to (only) mention infill, but that’s not what Sacramento (and the other areas you listed) are exclusively pursuing.
Again, I ask – are you familiar with the continuing sprawl in Natomas (part of Sacramento), for example? We could also discuss the other areas you mention and the new sprawling developments there as well, if you’d like.
How come THOSE developments aren’t “increasing affordability”?
I can probably find some links to those new developments and post them on here, if you want to see the prices.
But honestly, the footprint of Sacramento is so large already, and so non-densely populated that you could probably fit Davis AND Woodland within its undeveloped city limits – just on their vacant lots alone.
Truth be told, you could probably also fit the entirety of Davis within Woodland’s city limits on existing vacant lots, as well.
I’m not sure that this even legitimately qualifies as “infill”.
“Progress has been made in subsidized and income-restricted housing production, particularly in the past three years.”
“Subsidized” . . . so other people putting money is a pot, siphoned off and redistributed by bureaucracy, and the remains distributed by lottery to a lucky few.
Keep up the good work, Newsom-Weiner.
Now that I think about it a little more, when (exactly) do the growth activists “switch” from labeling development as “infill” vs. “sprawl”? Or do they just constantly try to label sprawl as infill, for political purposes?
Since Natomas (with its taxpayer-funded levees) is presumably now within Sacramento’s city limits, do the growth activists then call that “infill”?
(Also curious if it was included within city limits before, or after development interests succeeded in forcing taxpayers to fund levee improvements.)
If those who want to eliminate Measure J somehow succeed in disenfranchising Davis voters, does development which is then approved by the council (within a vastly-expanded urban limit line) count as “infill”, or “sprawl”?
“Inquiring minds want to know”.
Most of Natomas had already been annexed into Sacramento city limits decades before the modern development boom. The key annexations occurred from the 1960s through the 1980s, well before the 1994 North Natomas Community Plan and long before anyone was talking about major new subdivisions. In other words, the land was inside the city first; the later rush to urbanize it did not require new annexation.
What came after annexation was the political push to make the area developable. Once developers set their sights on large scale construction, they needed massive taxpayer funded levee upgrades. The full Natomas levee program is projected to exceed 700 million dollars, with funding drawn from federal, state, and local sources. Local assessments through the Sacramento Area Flood Control Agency cover a substantial share. The State of California contributes another significant portion through Central Valley flood protection programs, and the U.S. Army Corps of Engineers funds the federally authorized construction segments. In short, the large public expenditure came only after annexation because urban development required the public to finance the flood control system that made it possible.
When inquiring minds are from Woodland, no one in Davis cares or bothers to answer.