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Not Enough Permits Are Being Issued To Meet Bay Area’s Housing Needs

The Bay Area is extremely behind in meeting the housing needs for its population growth. For every eight jobs created, only one unit of housing has been built, according to Bay Area Council Senior Vice President, Public Policy Matt Regan.

Redwood City

From 2007 to 2014, the Bay Area only built 57% of its 214,500-unit Regional Housing Need Allocation set by the state, according to a report from the Association of Bay Area Governments.

The California Department of Housing and Community Development calculates the RHNA for each jurisdiction based on forecast population growth over a seven-year cycle. The department determined 187,994 units need to be built from 2015 to 2023 to meet the demands of the region. As of April, the Bay Area has met 15% of its obligation, issuing 27,676 permits since 2015. Santa Clara County issued the most permits with 9,488, but that was only 16% of the 58,000 units needed to meet its 2023 requirement. 

 

“The problem of cities being less than enthusiastic in permitting homes is not a new one,” Regan said. “We’ve seen since the late ’70s and early ’80s a pretty precipitous drop in the number of units permitted in California.”

Since the mid- to late 1980s, permitting has fallen to 80,000 units per year, which is the typical number of permits issued during a recessionary period, according to Regan.

“We’re producing recessionary levels of housing at a time when the economy is booming, capital is cheap and at a time when [housing] should be flourishing,” Regan said.

Several cities appear to be ignoring their obligations or focusing on building only high-end housing. The small East Bay city of Moraga had an obligation of 234 homes by 2014 and built nine homes for above-moderate-incomes in the last cycle, meeting only 4% of its obligations.

“This is not atypical for wealthy suburban communities,” Regan said. “They do tend to be very reticent and reluctant to build homes.”

 

More Low-Income Housing Needed

While many of the top cities exceeded their 2014 RHNAs, much of the housing built was for above-moderate-income levels. Taken as a group, all nine counties met 29% of the area's very-low-income housing requirements, 26% of its low-income housing requirements and 28% of its moderate-income housing requirements. For above-moderate-income level housing, the region met 99% of its obligation. San Francisco issued the most permits for very-low-income housing with 3,920, which was only 59% of its RHNA.

Redwood City, which was one of the top cities for the 2014 RHNA, only met 26% of its requirement for moderate-income level housing and 19% of its requirement for very-low-income housing. In Los Altos, 784 permits were issued for above-moderate-income housing when only 74 units were required. The city issued 57 permits in total for moderate-, low- and very-low-income level housing by 2014.

Oakley, which met 211% of its 2014 housing obligation, surpassed or nearly meet its housing obligations at all levels of income. It issued 874 permits for moderate-income housing, meeting its obligation by 993%. The pace of development for Oakley has slowed down over the last two years and it has yet to issue permits for low- and very-low-income housing to meet its 2023 obligations. As of April, it issued 47% of the permits needed for above-moderate housing by 2023.