Scrambling for that starter home 

The latest trend reports on Bay Area housing prices displayed a disconcerting mixture of old news and new problems. Despite what is trumpeted as a nationwide home sales downturn, complete with rising foreclosures against homeowners holding risky adjustable-rate mortgages, San Francisco and San Mateo County remain among the country’s hardest markets for first-time buyers to enter.

A San Francisco starter home (85 percent of the median price) now costs $713,700, and only 19 percent of city households qualify for the $4,820 monthly payments, a one-fifth drop since 2003. San Mateo County starter homes cost $727,600 and are affordable by just 21 percent of county households, a one-third drop-off in three years.

The 2006 year-end analyses by the Association of Bay Area Governments and San Mateo’s City/County Association of Governments each showed The City and the Peninsula still among America’s Top 10 Least Affordable Housing Markets. In 2005, the latest year for which figures are available, the National Low Income Housing Coalition ranked San Francisco and San Mateo as No. 2 and 3 for nonaffordability — in a virtual dead heat behind Marin County.

Contra Costa, Alameda and even Santa Cruz counties could also be found a bit lower in the national Top 10 unaffordable list, giving the Bay Area no less than six slots of the Top 10. In terms of economic ramifications, although this indicates the greater Bay Area is still high among America’s most desirable locations, the warning signals suggest more than ever that housing scarcity and costliness are primary threats to our region’s continuing prosperity.

Entrepreneurs, managers and highly educated professionals are undoubtedly the key to driving business and job growth in the high-expense Bay Area. But this region becomes considerably less attractive managerially when homes cost considerably more than in other pleasant-lifestyle areas; and when the firefighters, teachers, retail clerks and restaurant workers necessary to maintaining a functional economy must choose whether their jobs are worth commuting from the nearest affordable homes in the Central Valley.

This year’s housing sales may be slowing slightly in outlying areas of the East Bay, but demand remains high in San Mateo and San Francisco; because little acreage remains available for new construction, obtaining permits is problematic and established neighborhoods reflexively resist increased density.

Attempting to ease the logjam, San Mateo County officials are seeking an initiative to allow cities to swap state-mandated affordable housing credits for cash stipends to neighboring cities with more room for housing development. Pending Assembly legislation would also allow counties to charge $25 for filing legal documents, which would generate a steady income for affordable housing trust funds.

Hopefully these small steps indicate a rising recognition by local government that the paucity of affordable Bay Area housing must be attacked regionally on all fronts.

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Staff Report

Staff Report

A daily newspaper covering San Francisco, San Mateo County and serving Alameda, Marin and Santa Clara counties.
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