The Rising Cost of Housing in Alameda County

Why is housing so unaffordable in Alameda County and the Bay Area?

The most fundamental reason housing is so expensive in Alameda County and the Bay Area is because we don’t have enough of it. There are a lot of reasons this is the case, but here are key reasons that we are experiencing such an extreme affordable housing challenge.

One of the biggest factors limiting housing supply over the last 50 years is land use and entitlement process rules that make building housing difficult and expensive. Across our region, there are limits on where and how much housing can be built, in particular where multi-family/apartment buildings can be built. Between 2015-2021, cities and counties across the region permitted only 35% of the affordable homes needed.

Money is limiting the housing supply

Building affordable housing has always required substantial public funding, and there is a shortage of funding for affordable housing. In the 1980s, the federal government reduced the amount of funding for affordable housing significantly, which has made it harder to build throughout the country. Today in the Bay Area, we continue to lack sufficient public funding to enable the development of affordable housing at the levels needed for our communities. As of 2023, there are 32,944 affordable homes in the Bay Area that are ready to be built, but can’t advance until they secure more public funding.

Together, restrictive zoning and the gap in funding have limited the supply of affordable housing, while we have seen continued regional growth and demand.

Widening income inequality

As of 2020, 3.5 million Bay Area residents – about half of all residents – are living in low- or very low-income households, accounting for 46% of all families in the region.

Strikingly, 68% of Black residents and 72% of Latinos are low or very low income, compared with just 35% of White residents. 

A high rate of homelessness

Approximately 37,000 unhoused people in the Bay Area in 2022, a 10% increase since 2019. We are also seeing growing rates of homelessness in outer counties that previously did not have significant populations of unhoused people, such as Contra Costa and Sonoma counties.

Instability for low-wage workers

57% of the Bay Area’s 3.5M low-income residents are rent-burdened, meaning they pay more than 30% of their income. This leaves people susceptible to extreme financial challenges if they experience a life crisis such as an illness or job loss. Based on this, it is estimated that about 575,000 people are at risk of homelessness.

Migration and strain on housing options. While not all people face homelessness because of the high costs of housing, we do see that many people face poor choices when it comes to finding an affordable home

We can plan to build homes, but we need a substantial funding source to actually build them and preserve the existing affordable housing we already have.

A proposed bond measure 

  • $10-20 Billion to invest in affordable housing
  • Requires voter approval
  • Funds dispersed over 10+ years 

To give a sense of what this would cost property owners, a $10 billion bond would mean approximately $100/year in additional property taxes for someone who owns a $1 million home.

a page from BAHFA presentation. It shows that 80% of funds return to where the funds originated and 20% to BAGFA to distribute

The “80/20 Split

  • That is, if we pass a Regional Housing Bond then 80% of the funds return to our county and some large cities (including Oakland), to be directly administered by the local governments.

The remaining 20% of the funds are retained by BAHFA to be strategically invested across the region.

The amounts here are based on a “return to source” methodology, whereby counties and cities will receive direct allocations in proportion to their contribution to the bond.

a graph that shows home much potential money could happen for AC County and Oakland if a bond is passed

So, if Alameda County county contributes a relatively larger share of tax revenue, it gets a relatively larger share of the bond funds.

There are two, parallel planning process that correspond to these two pots of the money: one is regional, and the other is local. There are many similarities between the processes, but also some important differences.

A timeline graph that shows what the Regional Housing Bond from Fall 2023 to 2025

The timeline is a key difference. For the regional funds, by law BAHFA must complete their Expenditure Plan in Spring of 2024 – prior to the ballot.

In contrast, the law gives Alameda County and the other counties more time – the earliest our expenditure plan can be due is February 2025.

With the leadership of Supervisor Miley, Berkeley’s Mayor Arreguin, and others – we are here because Alameda County is leveraging our prior successful experience with Measure A-1 to get a jumpstart on the process.