THE DREAM OF HOMEOWNERSHIP remains out of reach for millions of Bay Area residents despite state and local efforts to boost housing production, according to members of a panel discussion on housing that convened in Hayward on Tuesday.
During the discussion hosted by American Community Media at the Hayward Public Library, state Sen. Aisha Wahab, D-Fremont, said the Legislature needs to do a better job of diversifying its approach to housing policy.
“The housing conversation at the state level and even nationally is very siloed into one topic — production and supply and that is absolutely incorrect and doesn’t do justice to the housing crisis as a whole,” said Wahab, chairperson of the Senate Housing Committee.
She said the state does need more housing production, but despite all the policies that have been enacted over the past few years to boost supply, developers only built about 100,000 new units in 2023, for example, while the need is estimated to be closer to 2.5 million.
She said that if left to continue at this pace, it would take three generations to build the housing the state needs today.
“Supply and demand is largely a fallacy and false narrative that has been pushed by industry groups,” Wahab said.
Instead of relying so much on market forces and production, she said the state should also focus on quantifying the number of vacancies in the rental market, including how many units are off the market because they’re being used as short-term rentals, and identifying exactly who owns which properties in which jurisdictions.
“We also see a deep concern about transparency,” Wahab said. “Every single transparency law in California, when we are talking about rents and evictions and a database of who owns the home and is it a private equity firm that owns the home or whatever, those bills die immediately.”
She also said that cities and counties are incentivized by the market to build more market-rate and above-market-rate homes at the expense of affordable housing because they bring in more sales and property taxes.
“Supply and demand is largely a fallacy and false narrative that has been pushed by industry groups.”
Sen. Aisha Wahab, D-Fremont
“People won’t admit that but that is the honest truth of it,” she said.
Derek Barnes, CEO of the East Bay Rental Housing Association, said roughly 27 percent of his organization’s 1,500 member-landlords say they have vacancies — either because they’re briefly between tenants or the units have been empty for a long time.
“I think that there’s a real opportunity to help those owners bring those units back into the market with some education, some resources,” Barnes said.
He also said 55 percent of EBRHA members own four of fewer units, most are over 60 years old and about 21 percent live in the buildings they also use as income property.
“I would hope that we would be able to look at the specific needs of those smaller owners,” Barnes said.
The pressures building in the homebuyer and rental housing markets are worrisome to longtime industry observers.
Echoes of the 2008 crisis
Maeve Brown, executive director of Housing and Economic Rights Advocates, a nonprofit legal services organization, said she sees parallels to the 2008 housing crash and the massive wave of foreclosures that followed.
Brown said people are carrying a lot of debt, the average mortgage for people 65 years old and older is about $265,000 and the number of mortgage default notices has gone up 44 percent this year compared to last.
“This pattern looks very much to me like what we saw in the lead up to the great foreclosure crisis,” she said.
Cities like Hayward are doing what they can to encourage affordable housing construction, but even the low-income units that are built are too expensive for many buyers, said the city’s housing manager Christina Morales.
“Seventy percent of our tenants are earning less than the median income so their income doesn’t match the price point of the type of housing that is being developed, so there’s that big disconnect between the population and what the market can produce on its own,” Morales said.
She also said that as incomes rise for the region’s highest earners, the area median income threshold increases, which leaves people on the bottom income rung even further behind when it comes to qualifying for certain types of affordable housing.
Morales said the city has some tools it can employ to encourage the production of lower-cost housing, including an ordinance that requires developers to build a percentage of their project as affordable or contribute to the city’s fund for building affordable projects.
The city has also lowered the income level it takes to qualify for many affordable units.
“Hayward has ways to try to level out the playing field,” she said.