This is arguably the biggest issue facing local elected officials in the Bay Area. The red hot real estate market is making it very hard for many people to live here. Local municipalities must work to make sure new development accommodates the needs of people from all income levels.
Regional Housing Needs Assessment
The first question to ask is how much affordable housing do we need. Fortunately, there is a government agency, the Association of Bay Area Governments (ABAG), who is tasked with figuring this out. Every eight years they develop a Regional Housing Needs Assessment (RHNA). RHNA is a “state-mandated process to identify the total number of housing units (by affordability level) that each jurisdiction must accommodate in its Housing Element.” It is based on the Area Median Income.
A list of Fremont’s RHNA numbers for the eight year period from 2007 to 2014 is shown in the table below. Only 15% of the very low income units specified in the RHNA numbers were actually built in Fremont. And only 6% of the low income units were. On the other hand, 162% of the above moderate (i.e. market rate) housing was built.
Unfortunately, numbers like these are not unique to Fremont, nor unique to this time period. At a recent (2/16) Council meeting staff presented the progress in the current eight year period (below). Many permits will be issued soon for the Warm Springs and other developments will only continue this trend. (The 4,000 units at Warm Springs will have 86% of their units at market rate. The RHNA numbers specify that only 34% of all future development should be at market rate.)
This is a regional issue. The figures for Alameda County or the SF Bay Area as a whole are similar to those for Fremont. Unfortunately, the RHNA numbers are not only never met, cities rarely come anything close to meeting them. Our current requirements for new development are obviously woefully inadequate to address this issue.
Can’t Afford to Live Where They Work
Another figure that is used to assess affordable housing needs is the number of lower wage workers in a community divided by the number of housing units that those workers could afford. As shown below, this number is 8.30 for Fremont. That means for every eight people that work at a lower end job in Fremont, there is only one place that these people can afford. In Fremont, this means that nearly 6,000 people who work here have to commute from somewhere else.
As seen in the table below, other cities have similar values. San Jose has over 21,000 people who have to commute there to work. If you wonder why the Bay Area freeways are so crowded, this is a significant reason why.
The picture to the right shows how home prices roughly decrease as one gets further from Cupertino where the average home price is over a million dollars. As the graphic indicates, if you can’t qualify for a higher end home, you have to drive and drive to find one you can afford.
I was proud that Fremont was one of the better cities in the Bay Area with a requirement that new development must either build or fund affordable housing equivalent to 15% of the units they were building. Our old ordinance actually had this number going up to 20% starting January 1, 2015.
Then came the Warm Springs development. The developers came up with a plan where they would only have to provide 12.9% affordable housing. Instead of increasing the affordable housing requirement, the City actually lowered it to accommodate the Warm Springs developers. The Planning Commission and the Human Relations Commission suggested that the rate should not be lowered from the current 15%. In the end, the new requirement is 13.4%. I voted against this change.
The Alameda County Board of Supervisors recently (4/16) put a bond measure on the ballot for this November. Money from this bond will go towards building more affordable housing.
I will likely endorse this bond measure. However, I believe that this problem should also be solved by making legislative changes that require developers to provide more funding when building new development. Obviously, the old requirements weren’t enough leading to the situation where we have to do a bond measure.
A fair solution would be to have BOTH the taxpayers and the developers pay more to help resolve this issue.
Rents in Fremont and the surrounding area are rising at a rapid rate. Many people are being priced out of their homes, let alone not being able to afford to buy a home.
Given this, I brought this issue to the City Council as a referral and asked staff to look into the options we have. I brought this referral up last year but as of this writing (5/16), it has not come back to the Council.