“Housing is among the most basic human rights, the literal foundation where we rest our bodies, nurture our families and live much of our lives,” notes Plan Bay Area 2050. But in our region, and indeed across California, housing is unaffordable for too many residents.

This wasn’t always the case. In the late 1960s, Californians could buy the average home at a price of roughly three times their household income. Today, the average house in California will cost more than seven times the average household income. It’s always been more expensive to buy a home in California compared to the rest of the country, but that gap has grown to a chasm.

Is it the breathtaking beauty, year-round temperate weather, and access to good jobs that make our housing so expensive? These certainly drive demand for our special spot on the globe. But the main reason is that housing supply has, for a long time, failed to keep pace with a growing population. It is estimated that the state should have built 70,000 to 110,000 more housing units each year than it actually built from 1980 to 2010. In the last ten years alone, the state added 3.2 times more people than housing units.

“What we call luxury housing isn’t luxury because of the quality of the building or the amenities. It’s essentially any home in places where no new housing is being built, or where supply is lacking. A small bungalow in East Oakland is not luxury, it’s just priced like it.”

Amanda brown-stevens, Greenbelt alliance

To determine how many homes are needed, the state mandates the development of a Regional Housing Needs Allocation, or RHNA, every nine years. The RHNA determines the total number of new homes an area needs to build — and how affordable those homes need to be to meet the housing needs of people at all income levels. The most recent RHNA for the Bay Area identified a need of more than 441,000 housing units in the Bay Area from 2023-2031. A longer term view, offered by SPUR, estimates a need for 2.2 million more homes in the Bay Area by 2070.

A number of factors play into why more housing hasn’t been built in the Bay Area over the past several decades, including the high cost of building in California, resistance by cities and citizens to growth, and a drop in federal and state funding and tax credits for affordable housing development. We talk more about these factors in the “Produce” section of this Issue Brief.

At the same time, income inequality has grown. Wages for low income workers have been flat since 1979 even as rents and housing prices continued to climb, leaving an ever larger proportion of the population in a precarious situation. Today, 56% of Bay Area residents are cost burdened by housing, meaning they spend more than 30% of their income on housing, and many of those are spending more than 50% of their income.

Source: California Housing Partnership analysis of 2000-2019 Census ACS data

This housing burden falls disproportionately on people of color. Decades of exclusionary policies, such as redlining, kept Black residents in particular from generating wealth through homeownership, relegated them to less desirable areas, and prevented investment in their communities. The result is that today, white Californians are twice as likely as Black Californians to own their home. As home ownership is the key tool for wealth generation in our country, this plays a significant role in wealth disparity between Black and white families today.

Why Does This Matter?

The impacts of high housing prices in the Bay Area are many, from companies struggling to recruit talent, to even middle-income families being unable to buy a home. The most visible and devastating from a human suffering perspective is homelessness.

Homelessness has grown hand in hand with rising housing costs in the Bay Area. There are many factors behind the rise of homelessness — mental health and substance abuse play a role in some cases — but financial hardship (e.g., eviction, job loss, health care bills) is the #1 reason that people fall into homelessness, and data show that where rent burdens are high, homelessness increases. The tragedy of homelessness falls disproportionately on our Black neighbors who are overrepresented in the Bay Area homelessness population 5 to 1 compared to the general population.

“The combination of high housing costs, low wages, and the lack of a robust social safety net promises a steady stream of new individuals and families being forced out of their homes and into motels, cars, or tents.”

Battery Powered focused on our city’s unhoused population in the winter of 2018. Thousands of people have been helped out of homelessness since we covered that theme. But the homeless population overall has only grown. That’s because new households are falling into homelessness every day, primarily as a result of our housing crisis. In fact, two to three people became homeless in 2019 for every one person who was moved from homelessness to housing in the Bay Area. In short, if we cannot prevent new people from becoming homeless, we cannot solve the homelessness crisis in the Bay Area. As such, in this theme, we will dive into how to prevent people from becoming homeless in the first place by addressing the housing crisis. Our guiding question is:

How can we ensure that all Bay Area residents have access to affordable housing and homelessness is rare?

Our Focus

Three areas of work have been broadly agreed upon as necessary to ensure housing affordability: Protection, Preservation and Production. Battery Powered will explore each area to understand what is needed, but will make more limited choices within each about where our philanthropic investments are best placed.

One choice is to focus on extremely and very low-income renters, as this will have the most direct impact on preventing homelessness. Our Protect and Preserve pillars below will focus on these households. At the same time, housing is needed across all income levels to address the imbalance of supply and demand that is driving high housing costs in the Bay Area. Under the Production pillar, we will take a broader approach, supporting policy and innovation that will boost both market rate and affordable housing supply.

	Protect current residents from becoming homeless. Through legal services and rental assistance, we can prevent a brief economic hardship or dispute from turning into eviction and homelessness.
	Preserve existing affordable housing. By supporting nonprofits and community land trusts to purchase and protect properties, we can maintain and expand the existing stock of affordable housing.
	Produce new housing across the income spectrum with an emphasis on affordable and deeply affordable housing. Philanthropy can play many roles; we are interested in advocacy for and implementation of policies that support smart housing development, as well as supporting smaller or emerging developers to produce infill housing.

Across each focus area, we are interested in programming that advances climate smart development, addresses racial inequities in housing, and aligns with the Plan Bay Area 2050 adopted by the Association of Bay Area Governments and Metropolitan Transportation Commission.

Paths Not Taken. Economic mobility and strengthening the social safety net are two critical areas of investment that we have chosen not to focus on. These approaches bolster income and lift people out of poverty, making housing costs less of a burden on families. However, to include these areas of work would broaden an already dense and expansive theme. Instead we have decided to focus on the supply-side issues which are a primary driver of the housing crisis today.

Read next topic: Protect →

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