The June 2021 report, “New Housing in High-Productivity Metropolitan Areas: Encouraging Production,” responds “to requests in committee reports accompanying the FY 2019 and FY 2020 annual federal appropriations, that the U.S. Department of Housing and Urban Development (1) identify metropolitan areas with high housing costs and low [housing] production, and (2) recommend best practices for localities and states to help encourage the production of new housing in high-cost metropolitan areas.”
“HUD was asked to look beyond high-cost jurisdictions to high-productivity jurisdictions — places where a high value of goods and services is produced in relation to the number of jobs. (The term is not used in this report to refer to the creation of housing units.)”
The 31-page report sees the dearth of new affordable housing in high cost, high productivity areas as having “a negative impact on the nation’s economic output.”
It “identifies metropolitan areas with high housing costs … and high productivity. It then identifies strategies that can be used across a wide range of state and local jurisdictions to increase housing production to better enable households of all income levels to access high-productivity areas.”
The report notes, “California, which has the greatest number of high-cost jurisdictions, has enacted scores of legislative actions to address its housing needs, but continues to be unable to produce enough units to satisfy the demand.”
“Exhibit 1 provides a list of the 25 metropolitan areas with the highest price-to-income ratios. Metropolitan areas in California dominate the list.” Those in the region of APA California Northern Section include, ranked according to highest ratio of median home value to median household income, 2015-2019:
- 1 Santa Cruz-Watsonville, CA
- 3 San Francisco-Oakland-Hayward, CA
- 4 San Jose-Sunnyvale-Santa Clara, CA
- 9 Santa Rosa, CA
- 10 Salinas, CA
- 11 Napa, CA
Four of the “10 most expensive metropolitan areas based on housing wage, 2020,” are in Northern Section:
- 1 San Francisco, CA
- 2 San Jose-Sunnyvale-Santa Clara, CA
- 3 Santa Cruz-Watsonville, CA
- 6 Oakland-Fremont, CA
“The different measures of calculating unaffordability tell a consistent story,” the report notes. “Five metropolitan areas show up across the rankings: Honolulu, San Francisco, San Jose, Santa Cruz-Watsonville, and Santa Maria-Santa Barbara.”
“Six metropolitan areas are identified consistently as high productivity”— places where a high value of goods and services is produced in relation to the number of jobs: “Austin, Boston, Dallas, San Francisco, San Jose, and Seattle. Nine metropolitan areas appear as both high-productivity and high-cost places: Los Angeles, San Francisco, and San Jose, CA; Stamford, CT; Boston, MA; New York-Jersey City; Bend and Grants Pass, OR; and Seattle, WA.”
Section 4 of the report looks at “solutions to explore,” including financing, tax policy, and infrastructure financing.