Housing Affordability

Suburban Concord, California, which struggles with empty office space, is determining how to redevelop a 5,000-acre naval base next to a Bay Area Rapid Transit (BART) station. A few train stops away, San Francisco faces a growing housing deficit after adding 165,000 new jobs from 2010 to 2015.  

Though each of the Bay Area’s nine counties and 101 cities is experiencing the region’s housing crisis differently, the message from local planners is unified and clear: the problem demands a regional solution. A recent state bill even calls for the formation of a regional housing authority to raise funds for affordable housing.

“Our destinies are tied,” said William Gilchrist, planning director for the city of Oakland, at a meeting of planning directors from eight Bay Area cities, organized as part of the American Planning Association annual conference in San Francisco this spring. 

“All of these communities are out pursuing their strategies to a large extent individually,” Peter Pollock, the Ronald Smith Fellow at the Lincoln Institute of Land Policy and an organizer of the event, noted. “This was a rare opportunity for them to come together and talk about it from a more regional perspective.” 

Balancing Jobs and Housing  

In 2017, the Bay Area region added 3.5 as many jobs as housing units. San Francisco has felt the imbalance most acutely — since 2010, the city has added eight mostly high-income jobs for every new home, resulting in displaced residents, a growing homeless population, and multiple-hour commutes. 

The severe imbalances have raised questions about where houses and jobs should go throughout the region. Unable to meet the current demand for housing with the land available, San Francisco, at the epicenter of the shortage, is starting to look outside of its municipal boundaries.

“The solution to the housing crisis in land-scarce big cities like San Francisco is to link up with neighboring communities that have the capacity to provide housing at lower costs,” said Armando Carbonell, vice president of programs at the Lincoln Institute.

Other cities in the region are beginning to step up to create new regional job centers where housing is more readily available or where there is still the flexibility to add additional units.

San Jose, the Bay Area’s largest city and a hub for Silicon Valley, emerged repeatedly at the meeting as a potential site for new housing. The city’s downtown Diridon Station is the largest train and bus hub west of the Mississippi River. Currently, the station serves Amtrak, commuter rail trains to San Francisco and California’s Central Valley, and a light rail that serves San Jose and neighboring towns. By 2026 the city plans to add a BART underground station. One day, the state’s proposed high-speed rail from Los Angeles to the Bay Area could also stop there. Last year, Google purchased several city-owned parcels near Diridon station, with plans to build an urban campus home to 20,000 new jobs.

Perched at the southern end of the Bay Area, San Jose has historically provided a significant share of the Bay Area’s housing and is “committed to continuing to play this role,” said Planning Director Rosalynn Hughey. Since 1980, the city has built 60 percent of new housing in Santa Clara County. The city, like much of the state, has significant untapped housing potential as 94 percent of its residential land is currently zoned for detached single-family homes. San Jose faces a different type of imbalance: only nine percent of the city’s land is devoted to employment uses, and many residents commute to jobs in other cities; San Jose is the only major city in the country with more employed residents than jobs.

Meanwhile, some 50 miles to the north, San Francisco also faces a shortage of office space amid skyrocketing demand. Whereas many residents were once bused out of the city to Google’s Mountain View headquarters and other points south, significant commercial development is now happening within San Francisco, according to Planning Director John Rahaim. The city currently has a deficit of about 8 million square feet of office space due in part to Proposition M, which caps the amount of office space built in a year at about 900,000 square feet. 

The development of a new jobs center in San Jose could theoretically relieve pressure on San Francisco and reduce the number of residents leaving San Jose for work. Hughey said that a top priority is ensuring affordability is preserved in the area surrounding Diridon station. Google has said it will fund a share of affordable units on the repurposed land.

“While you often see competition between cities for revenue to help their fiscal picture, this group of planners would say that this is a positive thing. San Jose is housing rich, and  more job growth makes it a more balanced community,” Pollock said.

Concord — which has a car-dependent workforce and 5,000 untapped acres now available for development around the underutilized North Concord BART station — also has the potential to alleviate housing pressure in nearby communities. While the city currently has a 15 percent vacancy rate in the office sector, plans for new development on the former naval base are already attracting more jobs to the area, according to Director of Community and Economic Development Andrea Ouse. Initial plans call for a mixed-use development with 13,000 new housing units, six million square feet of commercial space, and a four-year university. 

Housing Is Also a Transit Issue 

The Bay Area’s transit system is currently overseen by 27 independent public agencies, many of which require different payment methods and passes to navigate. Al Savay, community and economic development director for the city of San Carlos, said, “housing is really a transportation issue. If we could get to and from job centers more efficiently, it could solve some very significant problems for us.” 

Savay pointed to the lack of a commuter train that crosses the Bay, last-mile transportation options, and infrastructure funding as additional barriers. He says these deficiences explain why 80 percent of commuting trips in the region are still made in cars and why the current jobs-housing imbalance isn’t sustainable within the current transportation infrastructure. 

Development surrounding Diridon Station and North Concord station will offer a faster, more energy-efficient way for residents to reach jobs in places like San Francisco whil creating new job centers in housing-rich communities. 

ADUs and Inclusionary Housing 

The planning directors also discussed how local tools like accessory dwelling units (ADUs) and inclusionary housing can make a difference in the region.

In San Jose, ADUs offer a way to at least partly undo historic zoning choices. If 10 percent of the single-family lots of at least 5,000 square feet that dominate the city’s map added a second unit, the city would gain 15,000 new homes, making a significant dent in San Jose’s goal to add 25,000 residential units in the next five years. The city has seen steady progress on this front—in 2018, two years after the city eased restrictions, permit applications increased from 49 to 762. A new program will go further and waive impact fees and offer loan incentives to homeowners who build an ADU and keep it affordable for at least five years.

Oakland councilmember Rebecca Kaplan has proposed a reduction in the city’s ceiling height requirement for ADUs. San Francisco, San Rafael, and Palo Alto are also committed to easing regulatory burdens. In December, Palo Alto removed a minimum lot size requirement for garage conversions and junior ADUs.

The region has also embraced inclusionary housing, the policy requiring that a portion of new development be kept affordable. Palo Alto was one of the first cities in the state to adopt a version of the policy, first negotiating individually with developers and today requiring 15 percent of new homes or apartments to be affordable. A public outreach effort in the early 2000s by the Non-Profit Housing Association of Northern California led to the adoption of 14 new inclusionary policies in the region.

Paul Jensen, the community development director for San Rafael, north of San Francisco, explained that in a liberal town known for anti-development sentiment, a recent increase from a 10 to 20 percent requirement has proven unrealistic. Jensen said the city may scale back the requirement to avoid stalling development completely.   

Oakland, which is experiencing unprecedented real estate investments and concerns about gentrification, has no inclusionary housing program. However, since 2016, it has required developers of housing to pay impact fees. By 2020, the fees will amount to $13,000-$24,000 per unit built.  

The Potential for Statewide Action 

The potential for state legislation looms large over discussions of regional housing solutions. Legislation filed by State Senator Scott Wiener of San Francisco would override local zoning to require greater density and remove some parking requirements near transit or jobs. Many local governments opposed the bill, which was blocked this year but could re-emerge in 2020, because it would remove some local control over land use. Some critics argue the bill doesn’t do enough to incentivize the production and preservation of affordable housing, and many suburban residents see the bill as a threat to local character and the value of their homes.  

Some cities are independently embracing the bill’s approach through local zoning changes. In San Jose, the recent decision to allow Google and other developers to build taller buildings near Diridon Station will have a similar impact as the proposed bill. 

Emma Zehner is communications and publications editor at the Lincoln Institute. 

Photograph: San Francisco Planning Director John Rahaim led a tour of the Transbay Transit Center at the 2019 American Planning Association annual conference. Credit: Anthony Flint.