Bay Area Housing Permits 13 Percent Short of Annual Market Need, Majority of Cities, Counties Not Meeting 'Fair Share' of Units.

SAN FRANCISCO -- Bay Area Council Seeks Legislative Reform to Address Environmental, Economic Damage

The Bay Area Housing Profile, an annual study by the Bay Area Council of housing in the region's 101 cities and nine counties, found that jurisdictions permitted only 87 percent of the housing needed to meet assigned levels for the five-year, 1999-2003 time period. Although the permitting pace improved from 83 percent the previous year, the Bay Area was 19,000 housing units below the mandated supply in 2003. The Profile also found:

--The Bay Area has a current housing deficit of 36,427 units needed to maintain pace with the current number of jobs in the region.

--At the current pace, the overall deficit will grow to nearly 300,000 units by 2030.

--Only 29 percent of the units built in the past five years were "affordable" as defined as households with income of $83,000, the equivalent of 120 percent of the region's median income.

--More than 60 percent of Bay Area jurisdictions are not meeting their "fair share" of permits issued. (State law requires the regional Council of Governments, in this case the Association of Bay Area Governments, to assign housing obligations to cities and counties. Each jurisdiction's Regional Housing Needs Determination often is called their "Fair Share housing allocation.")

"While our region may have coined the term 'smart growth,' we rapidly are falling into the trap of 'dumb growth,'" said Jim Wunderman, President and CEO of the Bay Area Council. "Whether by choice or circumstance, whenever city or county leaders permit less housing than their 'fair share' they act as a critical bottleneck -- one that causes environmental and economic damage to the rest of the region."

To break the bottleneck, the Bay Area Council announced today that it will work for legislative and Bay Area changes this legislative session to make it easier for cities and counties to increase the supply of housing. The policy changes the Bay Area Council seeks would:

--Expedite the California Environmental Quality Act (CEQA) for affordable housing, while preserving the environmental standards of the act.

--Generate fiscal incentives for local government to approve more housing.

--Develop a permanent source of state housing funds for low and very-low income families.

--Identify land supply for a 20-year period with housing element enforcement and production performance measures.

--Reform construction defect litigation.

--Reform Brownfield development to make these critical plots of land more available for cleanup and development, and to be put into their most productive use.

"We applaud the Bay Area Council's unwavering commitment to housing," said Guy Bjerke, Chief Operating Officer of the Home Builders Association of Northern California. "Having the voice of the Bay Area's business community highlight the link between an adequate housing supply and the region's economic health will be extremely helpful in achieving meaningful reform of housing policy."

Chronic underproduction and the resulting housing shortage have resulted in a multitude of negative effects for Bay Area residents. Escalating housing costs have caused many Bay Area residents to leave the region or move to its edge, increasing commuting time and distances, exacerbating regional traffic congestion, increasing air pollution, and further segregating households by income. Employers repeatedly identify the high cost of housing as a serious challenge to attracting and retaining a highly skilled workforce.

Many communities choose to limit housing production, especially multi-family or affordable housing. These decisions often stem from misinformation regarding the effects of building multi-family or affordable housing. Residents fear building multi-family or affordable housing will decrease their property values. Data from the American Housing Survey revealed that nationally from 1987 to 1999 there was "no difference in the appreciation of single-family homes located near apartments or condominiums and those that are not." Furthermore, a Bay Area study of affordable housing projects built by BRIDGE Housing Corporation showed no decline in the values of properties nearby to new affordable housing projects over a four-year period.

Existing job centers are in need of more housing. Santa Clara and San Francisco counties have the region's most serious jobs/housing imbalance, with housing unit deficits of 162,357 and 95,253, respectively. By 2030, San Francisco, Alameda and Santa Clara counties are projected to experience the most job growth and population growth, increasing their jobs-housing deficit.

About the Bay Area Council

Founded in 1945, the Bay Area Council (www.bayareacouncil.org) develops and drives regional public policy initiatives and researches critical infrastructure issues. Led by CEOs, the Bay Area Council presents a strong, united voice for more than 275 major employers throughout the Bay Area region in promoting economic prosperity and quality of life.

About the Home Builders Association of Northern California

The Home Builders Association of Northern California is a professional, non-profit association committed to promoting housing for people of all income levels and the production of quality homes. HBANC represents more than 1000 homebuilders, trade contractors, suppliers and industry professionals in 14 Northern California counties from Mendocino and Lake in the north to Monterey and San Benito in the south.