San Bernardino County Affordable Housing Solutions
California’s Legislative Analyst Office estimates that the state needs anywhere from 1.8 million to 3.5 million new homes by 2025 to absorb existing demand and future population growth. The current construction pace of fewer than 80,000 new homes per year falls short by 100,000 homes a year of meeting even the lowest estimate of demand. Much of the construction is also taking place away from major population centers where land is comparatively cheaper and further from areas where most of the job growth is occurring. This will compound traffic congestion, energy consumption and offset savingings of lower housing cost with more expensive and time consuming commutes. “As affordability becomes more problematic, people 'overpay' for housing, 'over-commute' by driving long distances between home and work, and 'overcrowd' by sharing space to the point that quality of life is severely impacted" according to the California Department of Housing and Community Development in its housing assessment last February. The most visible sign of the crisis is homelessness. In 2017, HUD estimated the California had approximately 134,000 homeless people, 21% of the national total, despite having only 12% of the nation’s population.
The housing shortages are creeping ever higher on the income scale. In 2016, according to the 2018 housing assessment of the California Department of Housing and Community Development, the state faced a shortfall of more than a million units for households earning between 50% and 120% of the median wage; only for households earning 120% of the median or more was there even a modest surplus.
Declining home ownership rates, falling vacancy rates, an increasing population and job growth in Southern California all contribute to rising rents. Practically, this means average rent increases of $149 a month in Orange County, $136 a month in Los Angeles County and $124 a month in the Inland Empire.
While each of the counties are experiencing similar problems, there are also distinct problems. Los Angeles County renters are particularly burdened by the reality that the construction of new housing has lagged for decades in the county. Though there have been improvements in recent years, nearly 60 percent of the county’s housing was built before 1970. With a home ownership rate of 45.1 percent as of 2015, this leaves renters with few options in the county.
Higher rents are driving many people out of the coastal counties and into the Inland Empire, and the region’s historically high vacancy rates have begun to fall. With the homeownership in San Bernardino County dropping from 62.6 percent to 57.2 percent and in Riverside County from 68.4 percent in 2010 to 64 percent in 2015 over the same period, the region’s rental market is under greater pressure. San Bernardino County needs 72,032 more affordable rental homes to meet current demand.
After a dramatic decline in the median home price due to the mortgage and financial crisis, the median home price was stable at approximately $150,000 for the 34 month period between September 2009 and June 2012. Since that time, the County’s median home price has risen to $335,000. This compares to a high of $380,000 in November 2006, during the housing bubble. Although prices are rising, sales are subdued due to a lack of inventory.
As defined by the U.S. Department of Housing and Urban Development, housing is considered affordable when a person pays no more than 30 percent of their income toward housing costs. Housing costs for renters include rent plus utilities, and for homeowners, include mortgage payments, taxes, insurance, and utilities. When a person pays more than 30 percent of their income toward housing costs, they are considered housing cost burdened. When a person pays more than 50 percent of their income toward housing costs, they are considered severely housing cost burdened.
As an example, working full-time at a minimum wage of $15 an hour (the California statewide minimum wage as of 2022 as set by Senate Bill 3), a renter or homeowner would be able to afford $780 per month in housing costs, and if they were paying more, they would be considered housing cost burdened. The average rent for an apartment in San Bernardino is $1,145. A studio apartment averages $794.
Existing affordable housing programs assist only a small proportion of low-income Californians. Most low-income Californians receive little or no assistance. Subsidies and voucher programs exist to help low-income families spending more than 30% of their income on housing. But those programs are oversubscribed, and unlikely ever to be fully funded; providing housing assistance to all low-income Californians who don't get it now would cost tens of billions of dollars, according to the state legislative analyst, making it the largest state expenditure outside of education.
Community Revitalization and Investment Authorities (CRIAs), provide a way for local governments to fund various types of economic revitalization programs, including low- and moderate-income housing, using tax-increment financing. New housing plans should focus on mixed-income communities – a strategy proven to lift families out of poverty when located near jobs. Mixed-income communities enable all residents to create new social ties that often result in improved household and community assets for all. Evidence for the efficacy of these communities can be found in cities around the world and across a variety of economic contexts. In Vienna, for example, private developers collaborate with the city to build affordable housing, renting half of all new apartments to lower-income residents. Rents are regulated by the city for a set period of time so that no residents pay more than 20 to 25 percent of their income for housing.
Vienna’s innovative social housing projects demonstrate the city’s commitment to affordability, high-quality architecture, energy conservation, and resident participation. In addition to other infrastructure systems and facilities, the effectiveness of the housing program has helped in making the city one of the most livable cities in the world, as judged by The Economist and Monocle in 2012, and as the city that offers the world’s highest quality of life, according to Mercer’s Quality of Living survey for the past four years. The city continues to add new units that are subsidized, about 5,000 annually, and available to lower income residents, housing developments do not devolve into middle-class enclaves nor do they become stigmatized concentrations of poverty.
In Cupertino California, the Vallco shopping mall has few tenants remain at the mall, an AMC Theater and a couple of restaurants, but it is largely abandoned. Developers from Sand Hill have a plan, called Vallco Town Center, includes 2,402 housing units along with 1.8 million square feet of office space. The City of San Bernardino is moving forward with a new development and reuse plan for the 48.2 acre Carousel District site in heart of downtown. “Concepts being considered for this mixed-use development include residential market-rate housing and retail redevelopment with future phases of office, educational, and/or additional housing.”
California Partnership encourages the inclusion of affordable housing in the redevelopment plans. A key mindset in the development and sustainability of cities is the realization that housing is more than a product. It is a system that integrates financing and revenue generation, policy, land use and transit. Now is the time to make systemic changes in secondary cities that often are less politically complicated and more open to public/private ventures and entrepreneurs with creative ideas who can improve the lives of San Bernardino County residents.