News

No easy fix to the affordability crisis

New growth forecast shows a dire need for more housing in the Bay Area

A coalition of elected leaders from all nine Bay Area counties agreed to an ambitious new vision for regional growth in the coming decades, calling for a more balanced mix of jobs and housing that curbs displacement, explosive cost-of-living increases and long hours stuck in traffic jams.

But among the city council members and county supervisors that make up the Metropolitan Transportation Commission (MTC) and the Association of Bay Area Governments (ABAG), approving the new so-called "Plan Bay Area 2040" at a joint meeting on Nov. 17 was hardly a time for celebration. Even with a more housing-centric, dense outlook for future growth in Silicon Valley, affordability for low-income families is still expected to worsen by 2040 and push out middle- and working-class families that have flooded out of the region in recent years.

Plan Bay Area is a long-term strategy designed to help forecast future housing and jobs growth in cities throughout the greater Bay Area, and guide city planning toward more "sustainable communities" that ease traffic congestion, reduce greenhouse gas emissions and support a better jobs-housing balance among cities throughout the region. The plan is intended to reverse lopsided growth that took place between 2011 and 2015, which added 501,000 jobs to the nine Bay Area counties but only 65,000 new homes. The problem is even worse on the Peninsula and in cities and towns along the Bay, where only one housing unit was built for every 15 jobs created, according to an MTC report.

The new forecast, which won support from both MTC commission members and ABAG board members, calls for 820,000 new homes along with 1.3 million new jobs by the year 2040, up from the 660,000 homes and 1.1 million jobs forecast in the 2013 version of the plan. In other words, development is accelerated on both the jobs and housing front, but the jobs-housing gap is narrowed.

Local cities and towns retain the ability to control all land-use decisions and choose whether or not to allow development projects, but MTC and ABAG can offer grant money to make the forecast a reality in what the agencies call "priority development areas." In Mountain View, those areas include El Camino Real, North Bayshore, San Antonio and now East Whisman. The joint agency has about $57 billion in revenue available to pay for new projects and programs under the plan.

But even on this new housing-centric trajectory, the Bay Area is still headed for trouble. Even with the mitigating measures -- the additional housing near public transit and the investment in transportation -- Plan Bay Area 2040 predicts a future where affordability remains a huge problem. Housing and transportation costs ate up a combined 54 percent of household income among lower-income households in the greater Bay Area in 2005. With the newly revised plan, the same families will be paying 67 percent of their pay on housing and transportation in 2040, according to the MTC report.

"If that's not a crisis, I do not know what is," said Scott Lane, an MTC policy advisory board member.

Scott Wiener. a former San Francisco supervisor who was just elected to the state Assembly, said he's concerned that affordability in the region continues to deteriorate for low-income families despite the revised plan, and suggested that MTC and ABAG figure out how many units would be needed to break even. At the least, he said, the study would serve as a dose of reality for communities that continuously fight small 10 and 15-unit projects.

"This is, to me, a slow-moving train wreck," Wiener said. "We sort of plod along, we have all these plans, we do all this work, and meanwhile it just gets worse and worse for low-income people (and) middle-income people."

Steve Heminger, the executive director of MTC, said it's easy to conceive that the break-even point for affordability would require Bay Area cities and towns to build more than 1 million homes by 2040. That kind of housing production would be unprecedented in the Bay Area, he said, and it would be a hard pill for current residents to swallow if growth is supposed to move at break-neck speeds.

"The higher you get, the more difficult it is to fit that kind of growth within the communities we cherish in a sustainable way," Heminger said.

What might be a more meaningful number is determining what congestion, affordability, access to jobs and greenhouse gas emissions would look like if the Bay Area falls short of the forecast, said Palo Alto council member Greg Scharff. MTC and ABAG are stuck trying to achieve balanced growth in the region without the authority to actually do it, he said, and trying to build adequate housing is going to lack political support so long as traffic continues to get worse. The plan projects that only 3 percent of residents will use transit and alternative modes of transportation instead of driving.

Alameda County Supervisor Scott Haggerty said he understands that housing is a problem in the Bay Area, but so far ABAG and MTC have done a "piss-poor" job of both explaining Plan Bay Area's mission to the public and following up with the necessary funds for transportation improvements. He said the result is growing discontent among residents who now sharply oppose new development, making it difficult for local elected leaders to carry out the plan's vision for the future.

"In my district alone, not one incumbent was re-elected, and that's because of 'rampant growth,'" Haggerty said. "That's not my term, that's the terms on the lawn signs."

Despite the loss of affordability, some people were happy that Plan Bay Area struck a balance in favor of housing growth. Pilar Lorenzana-Campo, the policy advisor for SV@Home, hailed the decision to adjust the jobs-housing growth throughout the region as a step in the right direction, and said she supports the idea of an "action plan" that will encourage cities to follow a more balanced growth pattern both in the short and long-term.

"It's not perfect, but we're not suggesting we make the perfect the enemy of the good," Lorenzana-Campo said.

A big change for Mountain View

Plan Bay Area's evolution from 2013 to 2016 projects that new housing construction will accelerate across the Bay Area through 2040, but some cities are expected to take on more of the responsibility than others. Mountain View, in particular, saw a giant increase in its housing forecast compared to only a few years ago, in part because of new plans to boost housing growth in several key areas of the city.

In 2013, Mountain View was expected to build thousands of units primarily located in the downtown area, along El Camino Real, and in the San Antonio and the Whisman Station neighborhoods -- a total of 9,400 new units from 2010 to 2040 and a roughly 28 percent increase in the city's total housing stock. Since then, that projection has exploded, and now the city is forecast to increase housing from 31,957 homes in 2010 to 58,300 homes in 2040, adding up to an 82.4 percent increase in the city's housing units.

City planners told the Voice that the Plan Bay Area forecast is more or less consistent with the city's vision for future housing in the city, particularly now that the City Council is receptive to the idea of adding housing in North Bayshore and East Whisman.

Other cities on the Peninsula are projected to have more modest increases in housing, with Palo Alto (24 percent), Sunnyvale (58 percent) Los Altos (9 percent) and Menlo Park (43 percent) all falling well below Mountain View's target for 2040.

Some of these forecasts are radically different from historical housing construction. In Menlo Park, for example, only 100 new units have been built in the last six years, according to the California Department of Finance, but between 2010 and 2040 the city is forecast to build more than 5,300 new homes.

Even at the meeting, when both agencies voted to approve the final Plan Bay Area scenario, commission and board members still grappled with whether these jobs and housing numbers should be seen as goals or predictions. Heminger clarified late in the meeting that the model is based off what could be feasibly achieved using financial incentives to steer Bay Area growth in the right direction.

"The model is not designed to replicate the desires of local jurisdictions for how many houses and jobs they get," Heminger said. "That's not its job, that not what it does. What it does is it tries to apply a market test ... and suggests to us whether we're close or far off based upon how the market is reacting under a certain set of incentives."

The next step is to draft an environmental impact report for the newly revised Plan Bay Area 2040, which is expected to be completed in the spring of next year.

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Comments

21 people like this
Posted by CommonSensePlease!
a resident of Old Mountain View
on Dec 9, 2016 at 3:57 pm

The term "affordable housing" is a cruel hoax. The housing itself remains unaffordable; only much of the cost to support it is shifted onto undeserving third parties. It was The Iron Lady Margaret Thatcher (I think) who quite correctly said "The trouble with socialism is that eventually you run out of other people's money." That most certainly is the case with the economically insane policy of "affordable" housing.


8 people like this
Posted by Cuesta Resident
a resident of Cuesta Park
on Dec 9, 2016 at 4:47 pm

A better approach would be to reduce the insane growth in office space, and incentivize big employers to distribute jobs more widely (with more work from home and small offices located in areas away from SF and the Peninsula).

That would reduce traffic, congestion, and greenhouse gases while also making housing here more affordable due to lower demand.

How about taxing any company with 500+ employees in Mountain View an annual fee of 2% of each employees total compensation (including options)? That would incentivize companies to use local space more wisely and provide funding to help with smarter development and more affordable housing.


25 people like this
Posted by Mark
a resident of Another Mountain View Neighborhood
on Dec 9, 2016 at 5:35 pm

We need another ballot measure that would limit the number on the annual new housing permits to the CPI number.

If a 2%,CPI, increase is acceptable to rental price increases to "save our community" then that same 2% should be used to limit our growth to "save our community".


10 people like this
Posted by Jerry
a resident of North Whisman
on Dec 9, 2016 at 7:17 pm

Something about this doesn't ring true. The people in charge of development are telling us how bad things are, but they're not owning up to how they created the mess. Why did they allow such an imbalance to develop over a period of so many years? Was it that hard to see we were headed for a cliff? And why should we believe those same temptations won't take us further down the track to the same outcome? It's time for civic leaders to admit to the dynamics that seduced them into such poor decisions for so long. Otherwise, why should we trust they'll do anything different? Why are we planning on 1.3 million new jobs? Is there no option to trim that number back? If not, then it seems we're watching a "slow moving train wreck" when our (elected) hands are on the controls?


3 people like this
Posted by DC
a resident of Sylvan Park
on Dec 11, 2016 at 3:11 pm

It would then suck to be almost poor. Cant buy a house cant qualify to buy a cheap house. Is that middle class?


3 people like this
Posted by Kay
a resident of Blossom Valley
on Dec 12, 2016 at 7:40 am

I'm proud of Mountain View for working to add housing and address this issue head on, but I am frustrated with the communities surrounding us and their willingness to look to us to solve this issue for them. How to get them to step up to the plate?


4 people like this
Posted by Frank
a resident of another community
on Dec 12, 2016 at 3:02 pm

Of COURSE there's an easy fix -

"No, Apple, you are NOT approved to build another spaceship"

"No, Google, you are NOT approved to build another Googleplex"

Basically, you control growth based on your population, roads, infrastructure, etc. We're a small valley surrounded by mountains, an ocean, and a bay.

Blanket approvals for high-tech growth, and cities are shocked to find out there's an affordability crisis?


4 people like this
Posted by george drysdale
a resident of another community
on Dec 13, 2016 at 12:54 pm

There are no solutions, just trade offs.

George Drysdale economics teacher


Sorry, but further commenting on this topic has been closed.

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