Bay Area Housing: The Path Forward – Production -The San Francisco Foundation

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Bay Area Housing: The Path Forward
Bay Area Housing: The Path Forward – Production

Bay Area Housing: The Path Forward – Production

Bay Area Housing: The Path Forward

Production

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Overview

Streamlining and Investing in Construction of Homes at All Income Levels

Building housing for tenants at all income levels and diversifying housing options are crucial strategies for creating more inclusive communities. Bay Area families are caught between rising housing costs and wages that are not keeping up. Between 1970 and 2021, rents in the Bay Area increased by 96% while median incomes grew by only 25% (adjusted for inflation).[1] Too many families are forced to pay too much for housing, live in substandard housing, or move away from their communities.

The state’s Regional Housing Needs Assessment (RHNA) requires the nine-county Bay Area to add over 440,000 new homes by 2031.[2] Of those homes, 180,000 must be available to lower-income households. For context, between 2015 and 2023 the Bay Area approved construction permits for about 190,000 new homes, with 44,000 set aside for lower-income households.[3]

Building in the Bay Area is challenging, with an average cost of $640,000 to build a new affordable home. The costs are driven by high land and labor costs, complex regulations, and the desire of some jurisdictions to limit housing construction and density (local control).[4]

Government agencies can subsidize affordable housing construction through loans, grants, and tax incentives, which help developers build new affordable homes. The Bay Area Housing Finance Authority (BAHFA) is a new regional agency poised to provide funding for affordable development throughout the nine-county Bay Area. It plans to do that by placing a $10-20 billion housing bond on the 2024 ballot to address these needs on a regional scale.

Government agencies, particularly at the state level, are increasingly adopting and implementing policies that encourage housing development. Recent efforts include allowing churches and nonprofit colleges to build affordable housing on their land, eliminating restrictive single-family zoning rules that have prevented the construction of denser housing, and streamlining the building-permitting process for affordable housing.

These efforts are making a difference. State, regional, and local leaders have prioritized housing and homelessness solutions, proposing more money and streamlining efforts to make California and the Bay Area more affordable.

[1] Metropolitan Transportation Commission, Vital Signs Website

[2] Plan Bay Area 2050

[3] State Department of Housing and Community Development, Housing Element Implementation and APR Data Dashboard

[4] Bay Area Council Economic Institute, How Much Does it Cost to Construct One Unit of Below Market Housing in the Bay Area?

Our Priorities

Seed funding and low-interest loans

We accelerate affordable housing development by providing seed funding and low-interest loans.

Increasing public funding

We support legislative efforts to increase public funding for building more affordable housing.

Racial equity and economic inclusion

We support increased flexibility and innovation in the housing sector to meet demand for affordable production while ensuring the sector becomes increasingly inclusive of all residents’ needs and advances racial equity and economic inclusion.

Fostering collaboration

We foster collaboration to move the needle across the entire Bay Area region.

Production in Action

Examples of SFF grantees building more affordable housing.

Emerging Developers Program

Richmond Neighborhood Housing Services recently launched its 5th cohort of the Emerging Developers Program, a 3-month long educational program designed to provide industry professionals with the knowledge and technical skills to develop infill units and single-family homes. Richmond Neighborhood Housing Services will coordinate and align resources between community-based technical assistance providers and lenders to maximize the resources targeted directly at Black-led development and real estate-related firms.

Rendering of East 12th Street.

East Bay Asian Local Development Corporation

SFF’s Bay Area Community Impact Fund loaned $2 million to the East Bay Asian Local Development Corporation (EBALDC) to provide much-needed affordable housing for the Bay Area. EBALDC is a critical, community-based, nonprofit organization that aims to build healthy, vibrant neighborhoods in Oakland and the East Bay. They serve 6,000 people annually in Alameda and Contra Costa Counties. 86% of EBALDC’s residents and program participants identify as people of color, and 87% of EBALDC’s residential households report incomes at less than half the area median income.

Family of Loan Funds

SFF initiative Partnership for the Bay’s Future supports the production and preservation of affordable homes in five Bay Area counties through its family of loan funds. Managed by Local Initiatives Support Corporation Bay Area (LISC), these funds are designed to address the lack of affordable homes—a reality that disproportionately impacts households of color—by bridging funding gaps throughout the region’s rental housing market. With a goal of investing at least $500 million by the end of 2025, the family of loan funds focuses on protecting the Bay Area’s most vulnerable residents and promoting the region’s long-term economic success and racial diversity. 

Policy Change

Examples of policy solutions that create systemic change

SFF supported budget advocacy to invest in the creation of the Bay Area Housing Finance Authority (BAHFA).  BAHFA is transforming the way affordable housing is financed in the region and encourages collaboration across all cities and counties to solve the Bay Area’s affordable housing challenges together. BAHFA secured $20 million from the FY 2021-22 State Budget to implement five pilot programs- including a regional online portal allowing tenants to search and apply for affordable housing. BAHFA is working to bring immediate housing benefits to the region, including a potential regional bond measure to generate $10 to $20 billion to build more affordable homes and help keep existing homes affordable.

SFF supported the Affordable Housing on Faith Lands Act (SB4) (read about our endorsement). SB4 unlocks the potential of faith-based properties for affordable housing development. “Congregations and faith-based organizations are embedded in the tapestry of who the Bay Area is. It is natural for congregations and faith-based organizations to dive deep into the solution of building affordable housing for low-income communities of color,” said Michelle Myles Chambers, Director of the FAITHS program.

Bringing more resources to the field

A powerful community of donors is helping provide the deeply needed resources to fuel this work.

Northern California Grantmakers and SFF partnered to host Pathways to Housing Justice, a three-part series designed to help a community of funders identify opportunities to support addressing our housing crisis. The path forward is not one-size-fits-all. The series discussed opportunities such as building broad coalitions to secure legislative victories, investing in affordable housing, and supporting advocacy and power-building work.

As part of the Bay Area Housing for All leadership team, SFF has helped raise critical funds from institutional and individual donors and private and community foundations to support the creation of and campaign for a regional affordable housing bond.

SFF initiative Partnership for the Bay‘s Future’s family of loan funds has helped pool $404 million in investments from a community of donors to support the production and preservation of affordable homes in five Bay Area counties. With those funds, they have financed over 4,200 new homes. 50% of the units are reserved for households classified as “Extremely Low Income,” and 90% are for those classified as “Low Income.” Managed by the Local Initiatives Support Corporation Bay Area (LISC), these funds address the lack of affordable homes by bridging funding gaps throughout the region’s rental housing market. 

Bright Spots

In addition to SFF grantees, our whole community is working hard to address our housing needs. Here are some bright spots.

Financing

Established in 2021, the California Housing Accelerator jumpstarts affordable housing projects stuck in the funding pipeline due to competition for scarce Low-Income Housing Tax Credits and tax-exempt bonds, providing financing to developers through forgivable loans to facilitate construction. According to the State Department of Housing and Community Development, the Accelerator has awarded funding to 58 projects with nearly 5,000 units throughout the State.

New Construction

Completed in 2019, Villas on the Park in San Jose’s Downtown offers 83 studio Permanent Supportive Housing units for formerly chronically homeless individuals with priority placement for those living in the neighborhood surrounding St. James Park. Developed by PATH Ventures and Affirmed Housing, residents receive enhanced onsite services.

Housing on Surplus Government Land

In 2024, the City of Mill Valley entered into an agreement with EAH Housing to develop 45 affordable rental units on a city-owned parcel located on Hamilton Drive. Once complete, the development will provide housing for lower-income households with annual incomes between $40,000 and $140,000/year (depending on affordability and household size). New State laws have prioritized building affordable homes on government-owned land.

Housing on Surplus Government Land

The Valley Transportation Authority has leased several sites in the South Bay Area for affordable housing development, including Tamien Station, which will provide 135 new affordable homes adjacent to light rail and CalTrain. VTA has seven sites in its development pipeline, requiring a minimum of 25% of the homes in each development and 40% of the total built on VTA properties to be affordable.

Housing on Private Faith Land

The Trinity Center, a nonprofit affiliated with St. Paul’s Episcopal Church in Walnut Creek, worked with Resources for Community Development to build a 44-unit affordable housing development on its property in 2019, replacing two structures formerly used for daytime services for the homeless. All units are restricted to families earning 30-40% of the area median income, with half of the residents set aside for Section 8 voucher holders. A new State law will streamline future development of projects on faith-owned land.

Community Conversations

Through op-eds and speaking on panels, SFF is an important part of regional conversations around housing.

Bay Area Housing: The Path Forward – Production