Bay Area housing crunch lacks required production

New supply is well below the market’s job creation

Bay Area housing crunch lacks required production

The housing crunch in California’s Bay Area is worsening as sluggish production is far outpaced by the strong labor market.

In 2017, only 14,900 new units were added to the 9-county region according to data released last week by the Metropolitan Transportation Commission (MTC) and the Association of Bay Area Governments (ABAG).

Meanwhile, an estimated 52,700 jobs were created in the region according to the California Employment Development Department.

The housing crunch was further impacted by wildfires which destroyed almost 4,500 single-family homes in the Sonoma and Napa counties.

The data further shows:

  • Permits for single-family homes largely have stagnated since 2008, with some 5,000 permits issued regionwide each year. Meanwhile, permits for multifamily projects nearly doubled to 15,000 units in 2016 from 8,000 units in 2009.
  • Multifamily projects in San Francisco and San Jose have dominated Bay Area housing production since the end of the Great Recession, with the region's two largest cities adding nearly 42,000 new units — or roughly 40% of all new Bay Area housing —since 2010.

The figures are part of the agencies' Vital Signs performance-monitoring initiative.