Bay Area Housing: The Path Forward
Production
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Overview
Building housing at all 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 cannot keep up. Between 1970 and 2021, rents in the Bay Area increased by 96%, while median incomes grew by only 25% (adjusted for inflation). Too many families are forced to pay too much for housing, live in substandard housing, or move away from their community.
The State’s Regional Housing Needs Assessment (RHNA) requires the nine-county Bay Area to add more than 440,000 new homes by 2031. Of those homes, 180,000 must be available to lower-income households. For context, between 2015 and 2023, the Bay Area approved permits for ~190,000 new homes, with 44,000 set aside for lower-income households.[1]
Building in the Bay Area is challenging, with an average cost of $800,000 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 affordable housing (local control).
Government agencies can subsidize affordable housing 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. This agency is planning to place a $10-20 billion housing 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 limited housing options, and streamlining the 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] It is important to clarify that building permits do not always result in a housing start. Permits can be issued and then later be cancelled, voided, or expire.
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.
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.
Community Conversations
Through op-eds and speaking on panels, SFF is an important part of regional conversations around housing.
Read More on Producing Affordable Homes
Affordable housing production statistics
YIMBY Education Fund (September 27, 2023)
Metropolitan Transportation Commission (January 2023)
Terner Center for Housing Innovation (September 23, 2021)
Othering & Belonging Institute (October 7, 2020)
Terner Center for Housing Innovation (February 2023)
Terner Center for Housing Innovation (December 19, 2023)
Report to the City Council (October 19, 2023)
Report from the State Department of Housing and Community Development (October 2023)
Terner Center for Housing Innovation (August 30, 2023)
Terner Center for Housing Innovation (April 11, 2023)
Terner Center for Housing Innovation (August 4, 2022)
Terner Center for Housing Innovation (February 9, 2021)