Massive new home-building target set for Bay Area

Aim high, Bay Area planners and developers — state housing
officials want the nine counties and their 101 cities to double the
pace of home and apartment building in coming years.

A preliminary goal from the state Department of Housing and
Community Development calls for 441,000 new housing units to be
built in the Bay Area between 2022 and 2030, more than twice the
region’s target from the last eight-year cycle. The region is
falling short of meeting its current goal of building 187,990 new
homes with only two years left to catch up.

The regional housing needs goal released publicly last week has
managed to vex Bay Area housing advocates, who feel the number is
too low, slow-growth homeowners,who feel the number is too high,
and city leaders, who worry they’ll never be able to reach
it.

“It’s going to be a major change for the Bay Area,†said
Berkeley Mayor Jesse Arreguin, president of the Association of Bay
Area Governments executive board.

Arreguin believes the goals — which could bump Berkeley’s
old requirement to build 3,000 units up to 6,000 units — could
address long-standing racial biases in housing and a chronic
shortage of affordable homes and rentals. Between 2015 and 2019,
Berkeley had not quite reached half of its current goal.

The state target is an early step in a years-long process to
guide future residential development throughout the housing-starved
state. New laws and lobbying by developers and pro-housing
advocates have emboldened the state to set ambitious new goals.

California’s housing shortage has helped push home and
apartment prices to the highest in the nation. The median sale
price for a single family home in the nine-county Bay Area was
$980,000 in April, according to the California Association of
Realtors.

The preliminary numbers, part of the regional housing need
allocation or RHNA process, separate needs into four income
categories: very low, low, moderate and above-moderate income. The
state estimates the region needs 114,442 new units for very low
income residents; 65,892 for low income residents; 72,712 for
moderate income residents; and 188,130 additional homes, usually
considered market-rate, for above-moderate income residents.

Regional planners with ABAG worked with state planners to come
up with the number, a 135 percent increase from the most recent
cycle, which concludes in 2022. Planners considered the estimated
population for 2030, as well as vacancy rates, financial stress on
homeowners and renters, and overcrowding to determine the amount of
new units needed to accommodate a growing region.

But the ingredients mixed into the housing needs estimate have
opened new scrutiny and criticism. Housing advocates say regional
planners used a conservative state population estimate — much
lower than the region’s own projections — and under-counted the
needed units.

Advocates also complained during a public hearing last week the
new target will fail to help rent and mortgage-stressed residents.
Roughly two-thirds of Bay Area low-income renters spend more than
the recommended 30 percent of their income on housing, said Aaron
Eckhouse of California YIMBY.

“One the one hand, we do see some significant progress,â€
Eckhouse said. “On the other hand, I think it’s substantially
lower than it should be.â€

Local elected leaders on the ABAG executive board swallowed hard
when they heard the new target. Several expressed concern that
cities couldn’t manage the massive planning project during the
COVID-19 pandemic.

“This number is going to set up a lot of cities and counties,
probably, to fail to meet their RHNA number,†said Novato city
councilmember Pat Eklund. She urged an extension from the state to
implement the program.

ABAG has 30 days to appeal, but staff cautioned that the
decision was made in collaboration between the state and regional
planners and was unlikely to change.

The more intense debate is expected in coming months, when
cities get specific targets and are told to double their housing
goals. State permit data from  2015 to June 2019 show most Bay Area
cities failing in the current cycle: San Jose has met less than
half its current target, Oakland has built twice as many high-end
homes as required but has fallen far short for lower income units,
and Concord has reached just 6 percent of its requirement.

If cities fail to meet their housing targets, a state law
enacted in 2017 makes it easier for developers to by-pass city
councils and build in accordance with zoning regulations. That
legislation, known as SB 35, is designed to force low-growth cities
to approve more projects.

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For example,
the Vallco Mall redevelopment in Cupertino
and an
apartment and retail complex in Los Altos
were rejected by city
councils, but under the new law developers won suits against the
cities to go forward.

Michael Lane, San Jose director of SPUR, the San Francisco Bay
Area Planning and Urban Research Association, said the city is
expected to have a high goal. But he said San Jose has plenty of
space to develop, and an aggressive target doesn’t have to be met
with downtown condos and apartment towers. The city can encourage
low- and mid-rise housing in neighborhoods, he said.

“It’ll be challenging, absolutely,†Lane said. “The main
thing is to get proper zoning and find sites that are real.â€

Source: FS – All – Real Estate News 1
Massive new home-building target set for Bay Area