Solving the Bay Area housing shortage — new report ranks which ideas will work

Everyone from politicians to academics to your next door neighbor seems to have an opinion on how to solve the Bay Area's housing shortage. But which of those ideas will actually work?

A new report attempts to answer that question for Alameda County by analyzing 20 different proposed or recently enacted housing policies. The report by the business-backed Bay Area Council Economic Institute estimates how many units of housing each policy would generate - or eliminate - and how each would impact local residents' abilities to afford homes. It's only the second study to provide that analysis, following the Council's 2016 report focusing on San Francisco.

Jeff Bellisario, vice president of the Bay Area Council Economic Institute, hopes that injecting data into the Bay Area's controversial and politically charged housing conversation will help illuminate the best path forward for solving the region's dire shortage.

“We think the real key here is focusing on families and thinking about the households that are impacted by the housing crisis,” he said. “It's not just about new units created, it's not just about price … It's looking at this housing crisis holistically, and looking at these policies and really looking at them against each other to see which ones could work best.”

The Council's research favored building housing near transit hubs and strengthening enforcement of the Regional Housing Needs Allocation (RHNA) goals - the state-mandated number of new homes cities must approve. On the other hand, it found that banning short-term rentals and imposing strict rent control rules would actually make it harder for residents to afford housing in Alameda County.

If the county imposed all of the policies that the council deemed “positive,” more than 26,000 households that are struggling to afford housing - spending more than the recommended 30 percent of their incomes on housing - could move into a more affordable situation, according to the report. That's about 12 percent of Alameda County's housing-cost-burdened population.

The Bay Area Council says the region needs to build its way out of the housing shortage that has driven up home values for existing homeowners, but also has made it nearly impossible for many to buy or even rent a home. Alameda County has added nearly 125,000 jobs since the beginning of 2012, but permitted just 27,505 homes in that same period, according to the report.

That imbalance has driven prices through the roof, and almost 40 percent of Alameda County households spent more than 30 percent of their income on housing in 2016, the report notes, citing the Census Bureau's American Community Survey.

One of the most helpful things Alameda County communities can do to ease the housing shortage is to build homes near transit, according to the Council. For example, Fremont plans to build 3,600 new market-rate housing units around the Warm Springs BART station. That influx of housing would lower rents and home prices in that area of the county by 4 percent, providing housing affordability for 2,421 households that previously had been struggling to afford to live there, according to the report. The project also will include 400 units reserved for low-income families, bringing the total number of households helped up to 2,821.

The legislature also could help, according to the report. SB 680, signed by Governor Jerry Brown in July 2017, expanded BART's authority to pursue specially designated “transit-oriented development” - which often include streamlined approvals and extra density allocations. That bill has the potential to allow 1,384 new households to afford to live in Alameda County, according to the report.

The Bay Area Council report also saw great potential in policies that strengthen enforcement of RHNA allocations. Two bills passed last year, SB 166 and SB 35, attempted to give those rules more teeth. The Bay Area Council says such measures could allow 7,052 more households to afford to live in Alameda County.

Meanwhile, some policies that housing advocates have touted as solutions to the shortage actually would have the opposite effect, affording to the Council's report. Airbnb and other short-term rental platforms often are blamed for the housing shortage because landlords can use the websites to rent their properties to tourists instead of to long-term, local tenants. But the Bay Area Council found that banning short-term rentals in Oakland would deprive some homeowners of an income source, thereby making it more difficult for 231 households to live there.

The council also found that enacting strict rent control measures throughout Alameda County would prevent 10,353 households from being able to afford to live there. While capping the amount landlords can raise a tenant's rent each year can protect existing renters, it can deter landlords from renting their units, and even deter developers from building rental properties, according to the report.

“Over the long run, we see rent control as really putting a damper on housing construction,” Bellisario said.

But Kevin Zwick, CEO of Housing Trust Silicon Valley, says eliminating rent control isn't the answer.

“I think it's a hard public policy question, but I'm not convinced that we should have no renter protections on the books, because we can't build housing fast enough to provide better housing solutions for people who are clearly impacted by the housing crisis,” he said. “People can't keep up with 10 percent increases year over year.”