In what might have seemed less than a decade ago impossible, Berkeley, the poster child for unaffordable college town, is now being held up nationally as a case study for what happens when a city dramatically increases housing production.
After decades of building relatively little housing, Berkeley became one of the most expensive college towns in America by the mid-2010s. Then the city shifted course. YIMBY activists and pro-housing policymakers pushed through zoning reforms and approved a wave of multifamily construction.
In recent years, Berkeley has added housing at levels not seen in generations.
As a result, tent growth slowed dramatically, and according to recent reporting, many Berkeley rents have fallen back to roughly 2018 levels even after years of inflation.
It confirms something economists have argued for decades: in high-demand markets, sustained housing production can relieve upward pressure on rents.
Like Berkeley, Davis has been a slow growth to at times nearly no growth community, that pushed housing prices up and created a shortage of beds for college students to rent.
Unlike Berkeley, Davis has not experienced a broad housing boom. In fact, Davis has barely built ownership housing at all.
According to recent housing production data, Davis has permitted only 805 single-family homes over the last 17 years. The city has added housing units during that period, but the overwhelming majority of them have been student-oriented multifamily rental projects and apartment developments.
However, the combined increase of supply, from both the community and the university of student housing, has enabled Davis to also see rents decline.
While Davis did not solve its housing crisis broadly, it alleviated one segment of it, student rental housing.
After decades of dangerously low vacancy rates—often hovering near zero—UC Davis and the city finally added thousands of student housing beds through projects like Lincoln40, Ryder, Sterling, and major on-campus expansion.
The result was predictable but politically significant: apartment rents declined for the first time in more than a decade.
The average apartment rent in Davis fell 1.8% from fall 2024 to fall 2025, according to the UC Davis vacancy survey.
For years, many local housing skeptics insisted that building more market-rate apartments would not help affordability, but when Davis finally added substantial student-oriented rental inventory, vacancy rates improved, competition increased, and landlords lost some pricing power.
The market responded exactly as supply-and-demand theory would predict—despite skeptics who argue such dynamics do not apply for housing.
But there is a crucial distinction between Davis and Berkeley—Davis’ remaining housing crisis is no longer primarily a student rental crisis.
It is an ownership housing crisis.
The problem now is family housing, workforce housing, and ownership opportunities for middle-income households, young families, and UC Davis faculty and staff.
This explains why Davis can simultaneously experience softening apartment rents while still suffering from extreme home prices and deep affordability problems for ownership housing.
Davis addressed part of its housing crisis—student rentals—while largely failing to address the shortage of ownership and family housing.
Student apartments helped stabilize the rental market but did little to expand homeownership opportunities or increase the supply of family-sized homes for teachers, university employees, researchers, health care workers, and younger families seeking to buy into the community.
As ownership opportunities constrict, Davis increasingly risks becoming economically stratified by age and wealth. Older homeowners remain protected by Proposition 13 and decades of appreciation, while younger households face near-insurmountable barriers to entry.
The result is gradual demographic stagnation.
Families leave, young professionals struggle to enter the market, UC Davis faces growing difficulty recruiting and retaining employees who can afford to live nearby, workers increasingly commute from surrounding communities, and the city gradually becomes older, wealthier, and less economically diverse.
The current Davis housing debate increasingly centers around projects like Village Farms and Willowgrove rather than student apartments alone and that puts pressure on Davis because Measure J has for 25 years severely restricted the city’s ability to build housing that sustain the community.
The question now is whether Davis is willing to address its ownership housing shortage.
That is a more politically difficult conversation because ownership housing necessarily raises questions about peripheral growth, Measure J/R/D, farmland conversion, infrastructure expansion, and long-term city planning.
But the Berkeley and Davis experiences together point toward an increasingly unavoidable conclusion: housing shortages are not monolithic. Different housing markets experience different forms of scarcity, and solving one segment does not automatically solve another.
Berkeley increased multifamily housing broadly and saw rents cool.
Davis increased student rental housing and saw apartment rents decline.
But Davis still has not meaningfully addressed ownership scarcity.
The evidence increasingly suggests that supply matters, meaning the next phase of the debate is no longer whether Davis should build housing, but what kind of housing it is willing to build—and for whom.
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The Chronicle just ran a story showing how Berkeley’s neighbor (Oakland) has one of the steepest housing price declines in the nation – dropping 28% since 2019. (Even while housing prices are still higher in multiple locales in Texas, since 2019.)
Oakland’s enormous drop in housing prices has nothing to do with “new construction”.
https://www.sfchronicle.com/realestate/article/oakland-home-prices-22244894.php
If anything, this shows evidence that housing prices have increased the fastest in places where there IS new construction.
The article also shows a significant drop in Berkeley’s other neighbor – Richmond.
Meanwhile, housing prices have either increased in Berkeley by 9.2%, or have decreased by 0.6% (to around $1.5 – $1.6 million) since last year – depending on which source that’s referred to.
https://www.redfin.com/city/1590/CA/Berkeley/housing-market
https://www.zillow.com/home-values/16992/berkeley-ca/
Given that the Berkeley-Oakland-Richmond housing market is closely interconnected, these trends are not surprising. The increased housing supply in the most desirable housing submarket (Berkeley due to its schools and proximity to UC) is decreasing prices in the related markets.
When we look at Zillow prices comparing Davis and Berkeley, we can more clearly see how increased supply is impacting prices. In June 2022 at the peak of the housing market price, both Davis and Berkeley prices were up 27%-28% over June 2022 prices. In April 2026 after the increase in Berkeley housing supply, prices had fallen 13% from 2022. Meanwhile Davis prices decreased only 4%.
Pretty sure that you can’t determine much from any of this.
In fact, I’m also pretty sure that Berkeley has built NO single family dwellings to speak of for decades, at this point. They’re “full” and they’ve been “full” my entire life (which is also the reason there’s no “cows in Berkeley – mooo”.)
Berkeley is also obviously one of the cities that is adding NO peripheral land whatsoever to its boundaries. Pretty much the only way they could do so is to commandeer land from one of the surrounding cities (thereby causing those cities to “shrink” in size).
So yeah, if anyone wants to hold up Berkeley or just about any other city in the Bay Area as a “model” for how to address RHNA targets WITHOUT adding peripheral land – have at it.
Average rent fell 1.8% so $2000/month rental rate fell $36. If that is rental rate progress, not sure renters felt it as such. With many resale home sales turning into rentals (I live in the University Estates area and 4 of the last 5 homes sold are rentals not single family homes) the incentive to buy resale homes as investments increases as rental prices remain high. And it is ridiculous to compare Davis to Berkeley. In May 2026, Berkeley ranked in the top 1% of the most expensive cities globally with rental rates at $2200 for a one bedroom and $3300/month for a two bedroom.
Housing in Davis should not be a solution for providing homes for UCD professors but homes for Blue Collar workers who are the lifeblood of this community but are priced out of affording a home. Next time you need a plumber or you have a conversation with your gardener, ask them if they can afford a home in Davis
“. . . the incentive to buy resale homes as investments increases as rental prices remain high.”
This usually doesn’t “pencil out”. (Perhaps for some run-down houses on Pole Line for example, it might. Or perhaps houses near UCD.)
Did investors purchase the rentals that you’re referring to? And when you state that they’re not “single family homes” – what does that mean?
As for “blue collar” businesses, they’re in Woodland (and many of them are doing pretty well).
Woodland is to Davis – what South San Francisco was to San Francisco. The “Industrial City”, as the sign says on the mountain visible when driving to San Francisco from the airport. (Pretty sure that sign has been embedded on that mountain since sometime before I was born.)
If you need a definition of a single family home, there is really no need to discuss this issue.
You said “4 of the last 5 homes sold are rentals not single family homes”
Many single-family homes ARE rentals (including in Davis).
Corporations have also buying entire new neighborhoods of single-family homes to be used as rentals.
That’s why I asked you the question – the manner in which you worded your comment conflicts with the definition.
A single-family home describes the structure itself; not whether or not it’s a rental.
John
It’s UCD staff who need more housing here. In 2007 about 6000 staff out of about 11,000 working on campus lived in Davis. Now only 4500 staff out of about the same size staff live in Davis. These workers have been driven out of town by high prices. And yes other workers who have jobs here also need housing which is why we need much more market-rate affordable by design housing than what is being offered by Village Farms.
We have a giant world class university but we shouldn’t build housing for professors. That is a stupid argument.
You actually think that university professors are unable to buy a pre-existing house? Really?
Also, it’s not necessarily that workers can’t “afford” Davis – it’s that they CHOOSE to live where they get more for their money. Then there’s the fact that most households have more than one worker – who don’t necessarily work at UCD or in Davis.
No one in Spring Lake is waiting around for a developer to build them an overpriced shoebox at Village Farms.
UCD itself is not increasing the number of staff members at its Davis campus.
We’ve been through all of this before.