Sonoma County gets low grade for housing affordability in real estate report
More than three quarters of Sonoma County’s households cannot afford to buy a median-priced home here because they do not earn enough to make the monthly mortgage payment of nearly $3,500, a new report said Tuesday.
The California Association of Realtors’ housing affordability report said just 23 percent of Sonoma County households earned the minimum annual income of $138,760 to purchase a median-priced home at $640,000 in the fourth quarter of last year.
The county’s median household income fell far below that level at $80,400, according to the Census Bureau’s latest estimate.
Statewide, 28 percent of households earned the $122,340 needed to buy a median-priced home at $564,270. Nationally, 54 percent of households made the $55,850 threshold to purchase a median-priced home at $257,600.
Monthly payment costs included taxes and insurance on a 30-year fixed-rate loan, assuming a 20 percent down payment and an effective composite interest rate of 4.95 percent.
Local officials and real estate brokers said the report confirms California has a housing crisis, and Gov. Gavin Newsom concurred Tuesday in his State of the State address.
“California should never be a place where only the well-off can lead a good life,” he said. “It starts with housing, perhaps our most overwhelming challenge right now.”
Newsom said he was committing $250 million in support to cities and counties to revamp their bureaucratic processes to approve more housing and $500 million more in grants when they achieve their goals.
The governor cited Santa Rosa and Anaheim as “local governments that do what’s right,” but did not elaborate.
Russ Heimerich, a spokesman for the state Business, Consumer Services and Housing Agency, said Santa Rosa has gained recognition for promoting housing recovery in the wake of the 2017 wildfires, including permission for developers seeking to build housing near the city’s two train stations to put up to twice as many market-rate apartments as would otherwise be allowed by promising to construct additional affordable housing.
Moves to make it easier and less expensive to build secondary homes led to more “granny unit” applications last year than the city had in the entire preceding decade.
Santa Rosa is also considering changes to promote downtown development, such as loosening restrictions on residential density, parking requirements and limits on building height.
“I think it shows we have a lot more work to do,” said David Rabbitt, the Sonoma County Board of Supervisors chairman, referring to the housing affordability report.
Rabbitt said it is time for “a good, honest discussion” about what’s needed to expand the local housing stock.
“Right now the incentive in the market rate (for housing) is to build a bigger home for lots of money,” he said. Builders who pay for land and development fees can add the fourth and fifth bedrooms to new homes for comparatively little money, he said.
At the same time, thousands of homes are not built “because they don’t pencil out,” Rabbitt said.
Local governments need to consider allowing smaller homes on smaller parcels, as well as cutting the cost of fees and time needed to secure permits, he said.
But when new housing is proposed in a neighborhood, residents often complain it will increase traffic, Rabbitt added.