San Jose is on track to produce enough housing for its middle class … by 2080.
That’s according to a new report from economic research firm Beacon Economics and Next 10, a public policy advocacy group, in which they rate California cities on their progress toward meeting state-mandated housing targets.
The report card is based on California’s Regional Housing Needs Assessment — (RHNA, pronounced “reena”) goals, a set of housing construction targets set by the state for each region — and grades hundreds of cities on how well they’re performing against those targets.
The short answer: Most of California is failing miserably when it comes to building enough housing for the majority of its residents.
“Supply has not met demand for years, and it has become increasingly difficult to develop an adequate stock of affordable housing units, forcing some residents to move further away from job centers or out of state entirely order to affordable housing,” Next 10 writes.
California’s housing shortage is most acute in the Bay Area, where a booming job market continues to outpace the region’s meager supply of new homes. A separate report recently released by Joint Venture Silicon Valley underscores that point. The region added 36,000 new jobs last year as Bay Area median household incomes rose to an all-time high of $118,400. At the same time, Silicon Valley median home sale prices have increased by $300,000 over the past two years alone, reaching nearly $1.2 million in 2018.
In many cities, the only income class for which enough housing is being built (by RHNA standards, anyway) are the very highest earners.
Some other highlights from the report:
- In some cases, the figures are absurdly dismal. Santa Clara, for example, won’t meet its low-income housing goal for more than 2,000 years — by 4100 — if it continues at its current pace. It’ll take more than 3,000 years for the city to meet its target for very-low-income housing, Next 10 and Beacon found.
- While the state-mandated RHNA reports do provide some insight into how much housing various cities are producing across income levels, they likely only scratch at the surface of a much more deeply rooted and complicated housing crisis. That's because 1 in 6 jurisdictions in the state don’t report even report how they’re faring against their housing goals, despite the state mandate, according to the report.
- And while some jurisdictions appear to be doing well, their grades may be inflated because their housing goals were not very high to begin with, Next 10 and Beacon said: “For example, relative to the county population, both Napa and Marin counties have relatively low RHNA allocation goals compared to other Bay Area counties.”
- Statewide, California needed 200,000 units of new housing to keep up with population growth in 2017, but only 113,000 were permitted, the report notes. Since 2007, fewer than 750,000 new units were permitted in the state, accounting for only 40 percent of the projected need.
- More than 40 percent of Northern California jurisdictions got a failing grade on the report card. On the Central Coast, more than half of the jurisdictions in Monterey County received an F, accounting for more than half of the failing grades in that region.
The crisis may be coming to a head. New California Gov. Gavin Newsom has signaled that he’s taking a tougher stance on the state’s housing crisis, including by going after cities that have allegedly fallen short on their housing targets. Last month, Newsom sued the Southern California city of Huntington Beach and warned that he’d continue the crackdown.