Bay Area Council Releases Housing Inventory; Crisis in Bay Area Housing Supply Highlighted.

SAN FRANCISCO--(BUSINESS WIRE)--May 20, 1999--

The Bay Area Council today released the first-ever Fair Share Housing Inventory, which tracks progress by Bay Area cities and counties in recent years toward providing their "fair share" of housing units needed by the region's growing population.

With 50 out of 109 Bay Area jurisdictions reporting, the results provide further evidence of the profound shortage of housing in the region.

The 50 jurisdictions, including four counties and 46 cities, accounted for approximately 101,490 housing units built, falling far short of their cumulative projected need for 182,542 units to be built during the years 1988-1995. Moreover, with results provided for four federally defined income categories -- Very Low, Low, Moderate, and Above Moderate -- the "fair share" housing need was not even close to fully met for any income category.

Those in the "Very Low" income category (defined by the Department of Housing and Urban Development as having 0 to 50 percent of area median income), fared the worst. Out of a projected need for 36,672 housing units to be built by the 50 reporting jurisdictions for the 1988-1995 period, only some 9,759 units, or 27 percent, were actually provided.

Based upon its Housing Needs Determination Report 1989, the Association of Bay Area Governments (ABAG) determined a "fair share" housing need for each city and county in the Bay Area for the planning period of 1988-1995. These housing needs were averaged with local and county income data from the 1980 census to determine an equitable share of housing need for each of four income categories in each jurisdiction.

In subsequently reporting their housing production for the Bay Area Council Fair Share Housing Inventory, each jurisdiction used its own methodology, thereby hindering analysis. Some reported housing production data through 1995 while others provided figures through 1997. In addition, some jurisdictions likely counted "units preserved" as "units built."

"We have a housing crisis in the Bay Area today," stated Sunne Wright McPeak, President and CEO, Bay Area Council. "There simply isn't enough housing to accommodate the numbers of people moving here for jobs. Most especially, we lack housing that is affordable to the workforce and that is located near job centers. This is why workers and their families have been forced to the fringes of the Bay Area."

"When it comes to housing supply, our gridlocked roads and highways serve as the canary in the coal mine," remarked Andrew Michael, Project Manager for the Bay Area Council Capital for Communities and Sustainable Development programs. "The extended commute for the workforce is exacerbating traffic congestion and air pollution and reducing quality of life."

Along with unveiling its Fair Share Housing Inventory, the Bay Area Council today also released the results of an informal internal poll of its members regarding the housing supply problem in the Bay Area. When asked to rate the critical nature of "the housing availability problem," an overwhelming 90 percent of the 50 respondents rated it either an 8, 9 or 10 on a scale of 1 to 10. Another 64 percent gave a rating of either 8, 9 or 10 regarding the extent to which "the lack of available and affordable housing" was affecting their ability "to attract and retain qualified employees."

"This feedback from leading Bay Area business executives mirrors the tremendous frustration felt by the overall public," stated Alexander Winslow, Bay Area Council Director of Communications. "But what is also highly disturbing is the direct evidence we received regarding how this region's housing crunch is undermining economic growth by hindering employers' abilities to find and retain employees."

In the 1998 Bay Area Poll, 53 percent of Bay Area residents stated that over the past year the supply of housing had gotten worse, while only 17 percent replied that it had gotten better. In addition, 80 percent of those surveyed said that the cost of housing had gotten worse.

The Bay Area Council is a CEO-led, business-sponsored public policy organization founded more than 50 years ago to promote regional economic prosperity and quality of life. The Council presents a strong, united voice for more than 230 major employers from throughout the region to help shape public policy affecting transportation, environmental quality, economic development, housing and land use, sustainable development, water policy, education and workforce preparation, and telecommunications infrastructure.

A Crisis in Bay Area Housing

A housing crisis is emerging in the Bay Area. The region is experiencing severe shortages of housing for all segments of the population, and especially of housing that is affordable to workers, new families, and residents on fixed incomes. In the December 1998 issue of the Bay Area Poll, 53 percent of Bay Area residents stated that over the past year the supply of housing had gotten worse while only 17 percent replied that it had gotten better. In addition, 80 percent of those surveyed said that the cost of housing had gotten worse in the past year.

In 1998, some 28,700 new housing units were built in the nine-county Bay Area, while just over 70,000 new nonfarm jobs were created. Santa Clara County, a hotbed for job growth in the region, experienced a 17 percent decline in new housing units built in 1998 compared to 1997.

Because of the unavailability of affordable housing in the vicinity of job centers, the region's workforce has increasingly moved to the outer fringes of the Bay Area in their quest for homes. The extended commute for the workforce is exacerbating traffic congestion and air pollution and reducing quality of life in the Bay Area.

The consequences are sobering not only for the environment and quality of life, but also for the economic prosperity of the region. Leading executives representing a wide range of industries in the region are now reporting their immense difficulties in finding and retaining workers who find it difficult or impossible to live in the area.

Based on the Association of Bay Area Governments (ABAG) Housing Needs Determination Report 1989, ABAG determined a "fair share" housing need for each jurisdiction in the Bay Area for the planning period of 1988-1995. These housing needs were averaged with local and county income data from the 1980 census to determine an equitable fair share of housing need for each jurisdiction.

In addition, ABAG was required by state law to classify these projected needs by the following income categories as defined by the U.S. Department of Housing and Urban Development (HUD): Very Low (0 to 50 percent of area median income); Low (50 tov80 percent of area median income); Moderate (80 to 120 percent of area median income); and, Above Moderate (120 percent or greater of area median income).

In response, the Bay Area Council created the Fair Share Housing Inventory, which tracks the number of housing units built in the Bay Area for 50 reporting jurisdictions (cities and counties) beginning from 1988. This inventory groups each reporting jurisdiction's housing production by income category as defined above. Findings include the following: -0-

--   Jurisdictions reporting to the Fair Share Housing Inventory
     accounted for only some 101,490 units built, falling far short of
     their cumulative projected need for 1988-1995 of 182,542 units.

--   The "fair share" housing need was not fully met for any of the
     four income categories.

--   Those in the "Very Low" income category fared the worst. Out of
     an identified need for 36,672 units to be built for the 1988-1995
     period, only some 9,759 units were actually built, meeting only
     approximately 27 percent of their housing need. They had a
     remaining unmet need for some 26,913 housing units.

-0-

To compile the Fair Share Housing Inventory, the Bay Area Council contacted all 109 jurisdictions throughout the region, including both cities and counties. A total of 88 jurisdictions have responded to date, but only 50 provided data that was useful for compiling the inventory. Each jurisdiction used its own methodology to provide totals for the inventory, which impedes data analysis.

Examples of differing methodologies include the fact that some jurisdictions reported housing production data through 1995 while others provided data through 1997; some jurisdictions likely counted "units preserved" as "units built;" and, jurisdictions decided for themselves how to classify which housing units built belonged to which income category.

To help address the Bay Area housing crisis, the State Assembly Select Committee on Jobs-Housing Balance, which is chaired by State Assemblymember Tom Torlakson, will hold a hearing on Friday, May 21 beginning at 10 AM. The hearing is being hosted by the Association of Bay Area Governments at the Metro Center at 101 Eighth Street, Oakland, California. This hearing, the second of a series, will include testimony from Sunne Wright McPeak, President and CEO, Bay Area Council.