How bad is our housing crisis? Pretty bad
Housing and homelessness. In recent meetings with the Sentinel Editorial Board, Santa Cruz's newly elected Mayor
Fred Keeley said that during the recent election, residents overwhelmingly cited these two issues as most important for the city to work on.
Regarding housing, younger people said they simply can't afford to buy or rent a home in our county, where prices have hardly gone down even with higher mortgage interest rates.
For older residents, the question becomes, “How will my kids be able to stay in Santa Cruz County?”
Yes, the median sales price of a home in Santa Cruz County dropped slightly in December from a month previous — to $1.175 million, from $1.245 million, a trend seen in many metro areas and counties throughout the state. But in the city of Santa Cruz, the average sales price of a home in Santa Cruz was $1.34 million in December, up 2.9% since last year.
The average price of a rental in Santa Cruz was $3,334 for a 700-square-foot apartment, according to Rent Cafe.
But with little inventory for sale, or rent, many real estate professionals don't expect a sudden drop of any consequence. And it almost goes without saying, these prices are out of affordable range for many, if not most, local residents.
It's probably little solace to those looking to buy or rent here, but the housing shortage also is at the heart of the state's biggest problems, including homelessness, poverty, income inequality, clogged freeways, pollution from long commutes and a sense of community.
Just one in five residents in our region can comfortably afford to buy a home, according to the California Association of Realtors. At the same time, nearly a quarter of the region's renters spend over 50% of their income on housing costs.
For cities and counties on the coast, NIMBYism has ruled, as jurisdictions make it difficult to build housing because local political leaders know their constituencies don't want to see high-rise apartment buildings and/or housing aimed at lowerincome residents.
The state of California has said there needs to be between 1.8 million and 2.5 million homes coming online by 2025 to ease the shortage that has driven up rents and home prices. The state also has moved to ensure that more housing will be expedited and indicated it will analyze, through the Housing Accountability Unit, created by order of Gov. Gavin Newsom in 2021, why it takes so long and is so difficult to build homes and apartments. The first target of the new bureau was the city of San Francisco, where it takes an average of 974 days for a development to get approved, according to self-reported data from the city.
As our region and the Bay Area struggle with a chronic housing shortage and milliondollar home listings, more than 80% of regional residents in a recent poll said housing affordability in their communities is a major problem, and, as Keeley indicated, 74% said homelessness is also a huge concern. The poll was conducted by the nonpartisan Public Policy Institute of California.
It's enough of a concern that the San Francisco metro area lost more than 116,000 residents, or 2.5% of its population, in 2021, according to census data. The South Bay also lost tens of thousands of residents, according to our Bay Area News Group.
How much housing locally? In August 2021, the state Department of Housing and Community Development provided the Association of Monterey Bay Area Governments (AMBAG) with what is needed: for the Santa Cruz, Monterey counties' region, 33,274 total units across four income categories by 2031. Of this, the city of Santa Cruz will need 3,736 more units; Watsonville more than 2,053 units; Capitola, 1,336; Scotts Valley, 1,220; and the unincorporated area, 4,634 units.
That's a lot of housing for a county where not much has been built in recent years. For instance, the new county goal is more than three times the area's current goal for a period ending this year — a goal that has not been met.