Housing Affordability ♦ Housing Stock ♦ Housing Supply ♦ Homelessness
A sufficient supply of housing is available to all members of society, and new housing supports diverse communities and healthy environments. Local governments consider the housing needs of people of all income levels when planning for new development. Zoning regulations allow for higher density housing located in downtown areas and along transit corridors to meet the needs of our growing population, build community, support transit ridership, and help reduce greenhouse gas emissions.
After declining for several years, housing prices and rents in the county are on the rise and San Mateo County has some of the highest housing costs in the nation. Increased property values may be welcome news for many current homeowners, but for first-time buyers or people relocating to the area, it only exacerbates the difficulty of purchasing a home in the county.
- The annual median home price in San Mateo County increased 7% since 2016.
- Median Sales Prices have increased by 68% and 48% for homes and condominiums, respectively, since a 15-year low in 2001.
- As of 2015, 40% of San Mateo County residents were renters and 48% of them spent more than 30% of their income on rent, while 25% spent more than 50% of income on rent.
Out of Reach
The National Low Income Housing Coalition’s 2017 Report “Out of Reach” documents the shortage of affordable housing throughout the United States. Over half of all renters in the country are cost-burdened, meaning they pay more than 30% of their income on housing.
According to the Report, in order to afford a 2-bedroom unit at fair market rate in San Mateo County, a renter would need to earn an hourly wage of $58.04 (equivalent to annual income of $120,720 or 5.5 full-time jobs at minimum wage). San Mateo County is tied with San Francisco and Marin Counties with the highest rental costs in the U.S.
A lack of affordable housing limits the ability of people to live in the county and can reduce the availability of qualified workers for local jobs, thereby constraining economic growth. In response to high housing prices, many workers are forced to either live outside the county and face long commutes or stretch themselves financially and pay more than they really can afford for housing. Approximately 60% of those employed in San Mateo County commute in from other counties for work, which leads to increased traffic congestion and vehicle-related emissions.
- Households earning the median income in San Mateo County cannot afford to purchase the median priced home or condo in the county.
- Between 2016 and 2017, the median home price increased by 7%, the median price condo increased 5%, and the median rent increased by 1.4%. The rates of increase are lower than the increase between 2014 and 2015.
The Bay Area Regional Health Inequities Initiative produces the Displacement Brief, which reports that San Mateo County had the highest rate of gentrification and displacement in the nine-county Bay Area as of 2015. Gentrification is the loss of low cost housing that transforms to higher cost housing and displaces low-income residents who can no longer afford the price. 28% of San Mateo County has undergone advanced gentrification or displacement, compared to 22% for the region. An additional 28% of San Mateo County is at risk of gentrification, whereas 64% of San Francisco is at risk. Displacement is a hardship on families as the stress of moving and switching schools can lead to health impacts. See the Urban Displacement Project for an interactive displacement and gentrification map.[/smc-box]
- Ideally, the expected percentage of income allocated for housing is 30%.
Jobs-Housing Fit is the ratio of the low-wage jobs and affordable housing units in a region. The Nonprofit Housing Association published ratios for selected cities in the Bay Area. Data indicates that in the City of San Mateo, there are over 8 low-income jobs for each unit of affordable housing, and 3,556 affordable units are needed to reach a jobs housing fit of 2 jobs per unit which is still above the average jobs/housing ratio of 1.58 jobs per unit.
According to the map below, prepared using the Regional Opportunity Index mapping project, most neighborhoods in San Mateo County have a jobs housing fit ratio of 4 or higher.
State Senate Bills for Affordable Housing
In response to California’s housing crisis, a series of bills have been passed to tackle the various issues pertaining to housing. For example, SB3 – Veterans and Affordable Housing Bond Act of 2018 ensures that federal funding will be used to help veterans and, low and middle-income families obtain affordable housing. Other bills – like SB35 – hold cities accountable for the amount of housing they approve. In addition, SB2 was created in order to generate funding for affordable housing programs through fees on real-estate documents. Despite the push from elected officials, many organizations and special interest groups have expressed disapproval toward certain housing bills. For example, SB 827, a controversial housing bill that was introduced by Scott Wiener (D-San Francisco), proposed building taller and denser housing near transit stations. However, activists voiced concern that low-income families would be pushed out of their neighborhoods and their homes replaced with more expensive housing.
- The first-time buyer housing affordability index tracks the number of households in a geographic area that are able to afford an entry level home.
- An entry level home is defined as 85% of the prevailing median price.
- The first-time buyer housing affordability index assumes a down payment of 10%, which is not included in the monthly payment used to calculate affordability.
- In the past decade, housing affordability peaked at 54% in 2011, but has declined in San Mateo County each year since.
Funds for Affordable Housing Development
Jurisdictions may require inclusionary units, in-lieu fees, commercial linkage fees, and impact fees on new developments to generate funding for affordable housing projects.
- Inclusionary unit requirements direct housing developers to allocate a number of units set for Below Market Rates (BMR) to ensure that residents of various incomes are included in the development (these requirements do not apply to rental homes). The City of San Mateo requires inclusionary units in new housing developments. In other jurisdictions, developers may have the option to pay in-lieu fees instead of providing BMR units.
- Commercial linkage fees offset the cost of adding new housing needed for jobs located within the proposed commercial development. Menlo Park collects commercial linkage fees.
- Impact fees on market-rate residential development are intended to offset the cost of housing for workers who provide essential services for those in the new development.
To discover which jurisdictions in the Bay Area have inclusionary policies and development fees, see ABAG’s Bay Area Housing Policy Directory.[/smc-box]
- As of 2016, San Mateo County had 273,798 housing units, while California had 13,911,737.
- Nearly 43% of the county’s housing stock was built before 1959, and only 23% has been built since 1980.
- Less than 6% of housing stock in San Mateo County was built after 2000.
- Housing construction in the county is on the rise to accommodate an influx of workers in the Bay Area.
- 2017 produced the highest total number of building permits since 2002. However, the number is far short of the Regional Housing Need (details below).
Regional Housing Need Allocation
The county’s housing supply shortage is a primary driver of high housing costs. The Regional Housing Need Allocation (RHNA) is part of a state-mandated process that creates housing production targets for each county based on existing need and forecasted population and job growth. The goals are to increase the supply of housing and to ensure that local governments consider the housing needs of people of all income levels. Housing production targets are divided into income groups and calculated as a percent of the area median income (AMI). The 2014-2022 RHNA target for San Mateo County is 16,418 new housing units, with 43% of them required to be affordable housing (for very-low and low income residents).
- The 2015-2023 RHNA for San Mateo County is 16,418 new housing units, with 43% of these required to be affordable housing (very-low and low income), 17% moderate, and 40% above moderate.
- In 2015, Menlo Park and Foster City were the only jurisdictions with a number of issued permits that exceeded their allocation. For Menlo Park, the majority of these permits were for moderate-income households.
- Only Atherton, Foster City, Hillsborough, Menlo Park, Portola Valley, and Woodside issued permits for very low-income housing.
- San Mateo County as a whole has only issued permits for 3% of its very low-income housing allocation as of the new RHNA cycle beginning in 2015 extending to 2023.
- Woodside and Hillsborough were the only two cities to exceed the RHNA projected housing needs between 2007 and 2014. Foster City, Redwood City, and San Bruno built at least 50% of their RHNA projected housing needs as well.
- Between 2007 and 2014, 56% of the housing built in San Mateo County was at market rate.
Housing our Growing Population
As of January 2015, all twenty-one San Mateo County jurisdictions were required by the state to update the Housing Element of their General Plan. The Housing Element is a vital tool cities use to plan for housing to accommodate our growing and changing population. It outlines strategies and locations where cities have the best opportunity to meet housing goals, while ensuring that new development enhances the qualities that make our communities livable and unique. To aid in this effort, the San Mateo County Housing Element Update Kit, otherwise known as “21 Elements”, is a collaborative project that aims to encourage and assist with the production and certification of high quality Housing Elements in the county. More broadly, this collaboration intends to strengthen local partnerships and develop solutions to housing needs throughout the county. For more information, visit www.21elements.com.
Public participation is an integral part of the Housing Element update process. Municipalities have held, and will continue to hold, meetings to provide the public with opportunities to help shape their communities.
- In 2017, San Mateo County’s unsheltered homeless population decreased by 221 compared with 2015, a 12% reduction.
- The San Mateo County Human Services Agency has implemented several programs to decrease homelessness towards the county’s goals of zero unsheltered homeless by 2020 and zero homeless veterans.
- Last year there were 130 homeless veterans in the county, this year there are 40 sheltered and 20 unsheltered veterans.
- The Agency’s Homeless Outreach Team connects those who are chronically homeless with psychiatric and medical services with assistance from Street Medicine providers.
- Although San Mateo County’s unsheltered homeless population has decreased, a majority of the unsheltered homeless population is concentrated in a few cities: Pacifica, East Palo Alto, Redwood City, Menlo Park, and Half Moon Bay.
(jump to top of page)
Housing Support for Mental Health
Federal deinstitutionalization of mental health services in the 1960s was intended to enable patients to receive treatment in their own communities rather than far-off institutions. However, due to cuts in federal funding, some residents that need mental health support in California end up homeless, often self-medicating with illegal drugs rather than prescribed pharmaceuticals. The Mental Health Association of San Mateo County provides a solution to this problem by constructing studio apartment complexes with mental health support on-site. The organization is currently constructing a 16-unit facility in the North Fair Oakes area of Redwood City in collaboration with federal, state and local governments, foundations, and private funders. The apartments are designed to enable residents to live independently while receiving mental health services and being part of a community. To qualify, residents must have a low income, a history of homelessness, and documented mental health disability.
Median Rent. San Mateo County Department of Housing. (2016). Retrieved from: http://housing.smcgov.org/housing-statistics
Median Sales. San Mateo County Association of Realtors. (2016). Retrieved from: www.samcar.org/index.cfm/sales_statistics.htm
U.S. Census Bureau, American Community Survey, 2015, 1-year estimates. Healthcare Insurance Coverage. Retrieved from: https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml[/smc-hide]