This is a set of data and infographics I compiled for a report to City Council about housing affordability. A link to the full report and presentation is below the graphic.
Housing is a basic human need. It is fundamental to the human condition. Housing is so important that much of modern civilization is focused on the homes we live in – developing and building them, buying and selling them, hunting for them, investing in them, renting and sharing them, repairing and improving them, bringing services to them, and protecting them.
In America, housing is absolutely central to the American Dream. Whether we own, or rent, or share a home, all Americans have in common a basic human need for housing we can afford and call our own. Being secure in our homes gives us the freedom to pursue our life interests and work toward our dreams, whether our dream is to start a family, or build an investment for the future, or simply to have a place to go where we are safe and warm and can live our lives free from fear and want.
It is no secret that our society, especially the Bay Area, is in a major housing crisis right now. There are many reasons why this crisis is happening. The rising cost of housing is a very complicated problem with many moving parts that all affect each other. The crisis we are in now was caused by many complex things, including some which began many years ago. No one single thing by itself caused the current housing crisis. Because there is no one cause of the crisis, there is no one cure-all that can quickly solve it. We should be careful not to oversimplify the problem. A crisis this complicated will have many different solutions and some solutions may take years to show progress.
It is tempting to try quick solutions that seem to give immediate progress, such as by immediately raising taxes very high to build more housing, or by passing very strict rent control laws. Every community is different, often with many diverse points of view, and every local housing market has different and unique factors affecting it. Even if solutions have good intentions, if they are not very carefully tested and studied before they are fully implemented, they can fail to work, or have unexpected consequences, or be struck down in lawsuits later. This can make the crisis worse, sometimes right away or years later.
For example, San Francisco has many housing laws including some of the strictest rent control laws in the country. However, rents in San Francisco still continue to escalate and are now among the most expensive in the world. This makes it so landlords fight even harder to protect their investments and their ability to raise rents because their properties are even more valuable. Because it is a very wealthy city, San Francisco can and does spend hundreds of millions of dollars to build affordable housing. However, it is still not enough. Ordinary working families with good jobs and decent pay who have lived there for many years in the past can no longer live there and still make ends meet.
Many of these working families have moved to more affordable cities like Oakland, Richmond, and Hayward. This has made the demand for housing in other Bay Area cities go up very fast. However, many of these cities are already built out, and new housing is not being built fast enough to make room for all the people who want to move in. There is not enough supply of housing to match all the demand. This makes housing prices go up. Rents in Hayward have gone up in the past three years, though not as high as in other parts of Alameda County like Castro Valley, Fremont, and Livermore.
In 1950, when the storied “Baby Boom” population explosion had just begun, Hayward was a small city of 14,000 people who lived in 4,700 houses and apartments combined (housing units). At that time, Hayward was mainly a farm town, and most of the land was farms, orchards, ranches, and other open lands. Ten years later in 1960, the population had grown very rapidly to 72,000 people. Many new homes had been built very fast, and Hayward had grown to 20,200 housing units in 1960. By 1970, the population had grown very fast again, to 93,000 people. Thousands more housing units were built, but not as many as in the previous ten years. In 1970 Hayward had 28,600 housing units.
From 1950 to 1970 – in a single family generation of twenty years – Hayward’s population exploded by 660%. The number of housing units had multiplied by 608%. During this time of very fast growth, nearly all of Hayward’s large orchards and farms and other open spaces were turned into massive neighborhoods of single family homes and “garden apartment” complexes, with shopping centers, schools, parks and many other services in between. This filled up nearly all of the open land in Hayward.
By the year 2000, Hayward’s population had continued to grow and had reached over 140,000 people. The number of housing units had barely kept up with the demand, to just over 45,000 housing units.
After the year 2000, housing development in Hayward slowed down. Nearly all of the available and easily developable open land for building housing had been filled. People’s attitudes about building had changed, and most wanted to leave the land that was still open alone, or keep it as parks and open space areas. People became more concerned about the impacts to the environment and quality of life in their neighborhoods that more housing could cause. Housing developers had to shift their focus to infill projects, which use smaller pieces of land or land that already has buildings on it. Infill projects are typically much more difficult and expensive to build than projects on open land. New restrictions and community opposition to infill projects based on density, parking, traffic, environmental impacts, and other complicated factors added to the difficulty and expense of developing and building new housing.
The gap between population growth and housing development began to widen. Between 2005 and 2015, Hayward’s population grew by nearly 15,000 people, but over the same period the total number of housing units increased by less than 500 units overall.
To look at this trend another way: In 2005, Hayward had one housing unit for every 2.84 people. In the year 2015, Hayward had one housing unit for every 3.24 people.
This problem is not limited to just Hayward. The entire State of California, and particularly the Bay Area, is confronting a growing housing affordability crisis. A recent draft statewide housing study from the State’s Housing and Community Development Department (HCD) entitled “California’s Housing Future: Challenges and Opportunities,” found that:
- Production in California averaged less than 80,000 new homes per year over the last 10 years, and ongoing production continues to fall far below the projected need of 180,000 additional homes annually.
- The majority of Californian renters — more than 3 million households — pay more than 30 percent of their income toward rent, and nearly one-third — more than 1.5 million households — pay more than 50% of their income toward rent.
In Hayward, home sales prices rose 84% between 2010 when the housing market bottomed out and 2015, the most recent year for which data is available.
In Hayward, rents increased 33% between 2011 and 2015.
In Hayward in 2015, approximately 91% of Very Low Income renters paid over 30% of their incomes for rent, and 36% paid more than half of their incomes for rent.
While these trends are cause for concern, Hayward’s rents are actually lower than median (middle-of-the-road) rents in Alameda County by a significant margin (See Figure 1).
Figure 1. Median Rents in Hayward, Castro Valley and Alameda County, 2011-2015
With limited resources available, how can local governments help solve the problem of housing affordability? Local governments typically have far fewer resources available to them than the state or federal government. What role do business people and investors, particularly housing developers, have to play in helping to resolve the housing crisis? The answers to these questions are explored in more detail in the full report.
Source: Review and Discussion of Housing Affordability Strategies and Resources in Hayward and Alameda County, Hayward City Council presentation, January 31, 2017