New Bay Area housing goals in question

But with COVID-19 suddenly upending everything from work and transportation habits to the financial backbone of the housing industry, some Peninsula officials are wondering whether it’s wise to re-examine the residential development targets.

“Maybe it is time to for everyone to just take our collective breath, pause and then kind of reassess where we all are at on this,” said San Mateo County Supervisor David Canepa, who serves as a representative to the organization known as ABAG.

Every eight years, the California Department of Housing and Community Development determines how many housing units should be built and works with regional bodies like ABAG to determine how many units are needed in each county and city.

ABAG develops a methodology for distributing to local governments a share of the total number of housing units needed across all income levels, also known as the Regional Housing Needs Allocation, or RHNA.

The most recent RHNA process has not advanced far enough for each city and county to know specifically how many units they will be expected to build, but early projections call for the region to develop twice as many units as was called for in the last cycle.

The process is leading to a draft methodology which should be completed in fall, with an expectation that an initial allocation should be announced in the spring of 2021.

And while local officials generally agreed the ramped-up production is necessary to make housing in San Mateo County more affordable and accessible, uncertainty lingers over the region’s capability to meet the mark set before the coronavirus outbreak.

“I just don’t know how we are going to hit the 440,000,” said Canepa, who has heartily advocated in favor of loosening development regulations to incentivize housing production in recent years.

Furthermore, he questioned whether so many units would be necessary as an increasing amount of large employers are allowing remote work arrangements with hopes of stemming coronavirus transmission.

The trend has given way to reports of many leaving the Bay Area in search of more affordable destinations. He also noted many have lost their jobs amid the pandemic, further weakening the local economy which previously drove the pricey housing market.

South San Francisco Mayor Rich Garbarino, also a regional representative to ABAG, shared a similarly skeptical view on the economics of the virus.

“If people aren’t working, how can they afford to buy housing? How are they going to pay rents? It’s just going to have an impact,” said Garbarino, alluding to the financial implications likely brought to the housing industry by coronavirus.

To that end, experts have speculated that the slowed economy may yield difficulties for some developers seeking funding with expectations that banks may be reticent to lend money.

These anxieties are heightened by local officials establishing rent moratoriums and other restrictions on the flow of money into the real estate sector, setting off a chain reaction of debt and risk sensitivities.

Garbarino said he already had reservations regarding the area’s ability to reach the production goal before the pandemic and those concerns have only grown as the virus has spread.

“The numbers are skewed as far as I’m concerned. … Nobody knows how long this pandemic is going to last and I’m not optimistic it is going to end any time soon,” he said.

Millbrae Councilman Wayne Lee, also a regional ABAG representative, said he believed collaboration between sectors will be essential to achieve the goals set out in the regional housing plan.

“If we don’t find a way to engage the entire public — meaning companies as well as governments — we’re going to be in the same place,” he said, acknowledging the housing production shortfall which has plagued the region and state over recent years.

For his part, Lee said he is particularly interested in catalyzing affordable housing construction and would like to see more below-market-rate units developed for essential workers and those forming the foundation of the Peninsula’s economy.

But he balanced that opinion against the recognition that COVID-19 will likely lead to a variety of changes in the housing sector which are difficult to imagine.

“We don’t really know how it will all play out,” he said.

Canepa agreed the future is uncertain, but said that should not dissuade officials from remaining committed to building housing and addressing the affordability crisis facing millions of Californians.

As part of that effort though, he said it is important to assure officials are working toward reaching goals that are attainable and realistic in uncertain times.

“You want to make sure if you have a goal, that it is within reach,” he said.

austin@smdailyjournal.com

(650) 344-5200 ext. 105