San Francisco has never been cheap when it comes to finding housing, but a recent Urban Institute report breaks down just how unaccessible the City by the Bay has become in recent years. With high demand, skyrocketing home prices, and woefully insufficient housing inventory, San Francisco also serves as an extreme but potent example of the affordability challenges facing California as a whole, as well as many other markets around the country.
As reported in an Urban Institute post entitled “The Bay Area’s housing crisis, in four charts,” the San Francisco Bay area remains a popular job hub, but lack of affordable housing supply, rising construction costs, tight credit, and other factors have turned the region into a perfect storm of unaffordable housing. As seen in the Urban Institute chart below, the number of Bay area homes priced above $1 million has increased significantly during the decade between 2007 and 2017. As the Urban report puts it, “the $3 million home has become the next frontier.”
Needless to say, this has left lower-income families and minorities behind as the city has continued to grow. The Urban report states, “The extreme competition for housing units has driven up prices and credit standards, making it difficult for low-income people to access homeownership. The current housing inventory does not meet the needs of essential members of the community, including teachers, firefighters, and police officers.”
However, it’s not just about affordability. In the Bay area, as with many other regions in California, the bottom line comes down to there simply not being enough houses to match demand. According to Urban’s Housing Affordability for Renters Index, 24.3 percent of San Francisco area renters can afford to buy a home if they wanted to. There simply aren’t enough homes to keep up. That’s not as bad as in Los Angeles, where the Renters Index rating is only 18 percent, but it still leaves a lot of room for improvement.
To see more of Urban Institute’s findings, click here.