Bay Area jobs-housing rebalance needs government upgrade: builder group

The San Francisco Bay Area needs to be creating far more homes than it has been to house all the new hires in the bigger-than-expected job boom, but the region's approach to housing creation needs serious remodeling to end the crisis-level shortfall, according to the leader of a major homebuilder group.

Version “2.0” of the nine-county region's growth strategy - Plan Bay Area 2040 - provides for more housing units than the 2010 original, but it still falls far short in righting the jobs-housing imbalance, said Bob Glover, executive officer of Building Industry Association of the Bay Area, which represents roughly 400 home constructors.

Since 2010, there have been 543,500 new jobs in the Bay Area, while local governments have approved 114,700 new housing units, he said at North Bay Business Journal's Construction Industry Conference in Santa Rosa on May 12. Problem is, homes built is lagging well behind the regional plan's projections, while the number of new jobs added has been far higher than expected, Glover said.

“That's about 200 percent of the expected job growth and negative 50 percent of the expected housing growth,” he said. “That adds up to 4.7 jobs per housing unit, and we're already facing a critical jobs-housing imbalance in the Bay Area.”

When developed by the Association of Bay Area Governments and the Metropolitan Transportation Commission to implement Senate Bill 375, Plan Bay Area envisioned construction of 930,000 homes. But critics convinced planners to cut that ultimately to 660,000. Challenge led to the 820,000-unit goal in the 2.0 plan. Trouble is, at the current rate of building 18,000–20,000 units annually since 2010, the likely total built will be about 550,000 by 2040, Glover said. And the state Legislative Analyst Office estimates about 1.2 million jobs will be created by then.

“It's getting more and more difficult the housing we need here in the Bay Area,” Glover said.

The cost of local fees, environmental mitigation and various levels of government regulation are nearly keeping pace with the jump in housing prices, he said.

But can the Bay Area “build its way out of the problem”? No and yes, Glover said.

“Short term, dropping 200,000 units into the Bay Area is probably not going to happen in the next year or two,” he said. “But long term, I would ask, ‘When was the last time we tried?'”

He pointed to the 1971 pace of building 65,000 homes a year to meet housing demand, and the median prices of California and U.S. homes were similar at the time. But the average median price of a U.S. home now is $231,000, while for a California home it's $770,000.

“If we really cared about economic sustainability, if we care about housing our current and future residents, we need to get serious, we need to start coming up with solutions,” Glover said.

Inclusionary zoning adds to the cost of market-rate construction and produces very few units, while also preventing more units from being added to the supply, Glover said. Such zoning mandates a percentage of new units built in that area be preserved for lower-income residents.

Accessory and junior accessory dwelling units, such as those championed by Marin County's Lilypad Homes and Marin Builders Association are helpful, he said. Really, federal, state, regional and local funding is needed to build affordable housing.

“This is a societal problem and it just shouldn't be borne on the backs of new construction,” he said.

A hopeful opportunity Glover pointed to for the coming year is the MTC's new Committee for Affordable and Sustainable Accommodations. CASA is a blue-ribbon task force intended to come up with “game-changing solutions.”

Jeff Quackenbush (jquackenbush@busjrnl.com, 707-521-4256) covers construction, commercial real estate and wine.