Volume 1, Number 2
Housing Shortage is also an Economic Issue
By Tina Hansen
On any given day you can stroll through Hacienda and see people out shopping, visiting parks and restaurants, and going to and from work. With a strong school system and an abundance of parks, trails, public art spaces and jobs, Pleasanton is a destination community that also serves as an ideal location to live and work. But with a limited supply of homes on the market, addressing housing affordability and availability is a continual and complex challenge.
The ongoing housing crisis has a cause and effect to the region and state that is complicated, symbiotic and far-reaching. The cause, first and foremost, is that the demand for housing in the highly desirable Bay Area far outstrips the supply that has been provided while the economy has grown. The resulting effect is not only a very limited supply of housing but an exacerbation of the cost for the housing that is available.
Throughout the state, a number of discussions have attempted to pinpoint solutions to address the enormous shortfall in housing that has developed over the last several years. Conversations have also been held on the impacts of not addressing the problem. One of the key implications of a housing market that is both constrained and expensive is that the difficulty in finding qualified employees to do specific jobs can quickly become a problem that will slow down economic growth.
This economic issue was a topic at a recent forum held by The California Apartment Association (CAA). “Inadequate housing stock threatens California’s economic prosperity and future,” said Tom Bannon, chief executive officer of the California Apartment Association. One of the findings from the forum is that high housing costs are driving talent and enterprise out of California.
According to the forum, Alameda County has seen the highest rate of increase in home prices in the region. This is due, in part, to an overall lack of inventory in housing options, and those that make up the 81 percent of homeowners in Hacienda and Pleasanton do not want to sell their homes.
Another key, state-wide finding from the forum is the fact that housing prices are more than 80 percent higher than the rest of the country, and despite California being the world’s sixth-largest economy, it cannot sustain this growth if the people who would want to move here for economic opportunities have no place to live. The California Association of Realtors (CAR) estimates the current median sales price in Alameda County is $755,000, up 3.2 percent from one year ago.
The forum also discussed means of addressing issues related to housing affordability and the measures available, such as rent control and other housing cost protections, to help create a more affordable stock of housing. Proponents note that measures such as these are imperative to help address rapidly escalating costs and to confront issues of displacement. Opponents to rent control see it as an ineffective solution to a condition of overly-constricted supply that will ultimately fail to solve the problem and, according to most economists at the forum, will only exacerbate the problem and harm the economy long term.
In December, California State Senator, Scott Wiener, introduced a bill that would help support existing state laws by creating ways in which housing project approvals can be streamlined, if needed, so that California cities produce needed homes. Despite these existing housing laws, many cities and counties are not meeting the goals established under their provisions. The proposed law will help to make sure that these targets are more likely to be met and that housing production keeps pace with anticipated growth in the region and the state.
This proposal is in keeping with a critical takeaway from the forum: that California housing development policies and laws currently in effect, like the Housing Accountability Act, must be strengthened and enforced as a means of facilitating the production of housing and creating more opportunities for affordability.
As the issue goes deeper, more consequences can be uncovered for the region than simply a lack of affordable housing. People who work in the area have to commute, many from long distances because they cannot afford to live near where they work, causing traffic and environmental problems, among others.
The discussion at the California Apartment Association has been echoed in many other places as well. The state Department of Housing and Community Development released a report earlier this year showing that California has annually produced 100,000 fewer new homes short of the state's demand for housing over the last ten 10 years which similarly increased prices for housing across the market. The effect of this has been to drastically decrease home ownership rates, now the lowest since the 1940's, and increase the proportion of income that many spend on rental housing: nearly a third of California renters spend more than half of their income on rent.
While there is much more to do, efforts are being made to help both increase supply and help improve affordability; which include new housing opportunities now emerging in Hacienda. After many years of comprehensive community-based planning, Hacienda is seeing its next generation of housing being delivered to the market and advancing its status as a premier working and living destination. Furthermore, existing and new housing in Hacienda provide a variety of options: both for-sale and for-rent and at a variety of income levels with some set aside to retain permanent affordability.
This is key because, as was noted at the California Apartment Association forum, restrictions on the availability of local labor will have severe consequences for the region's ability to sustain a healthy economy. Beyond that, Hacienda housing has meant the ability to create a more localized work force that can contribute to the civic life as well as the economic life of the community. Additional benefits are derived from having living spaces strategically connected with jobs and transit which not only improves the living experience for those who reside here but produces significant environmental benefits for the city and region.
Existing housing in Hacienda has historically seen about a third of its working residents employed locally within the Tri-Valley. As the demand for housing proximate to work increases, this percentage of people living and working locally will likely increase as well. In fact, Hacienda's existing and new housing projects have served to provide an important component that reinforces the live and work vision that attracts innovative thinkers and people seeking a balanced lifestyle. So, while more remains to be done, Hacienda has built a good foundation on which more can be built.