National Context Housing Crisis

• Supply and demand: When the demand for homes increases faster than the supply, prices go up.

• Underbuilding: The housing shortage has been brewing since the Great Recession, when a decade of underbuilding occurred.

• Millennials: The largest generation in U.S. history is reaching the prime age for first-time home buying.

• Zoning restrictions: Restrictive zoning laws make it difficult to build homes in areas with jobs.

• Labor shortage: Construction firms are having difficulty finding skilled labor.

• Material costs: The cost of raw materials, such as lumber, has spiked.

Here are some of the effects of the housing shortage:

• Affordability crisis: The housing shortage is the primary reason for the affordability crisis.

• Cost-burdened families: 70% of extremely low-income families are severely cost-burdened, paying more than half their income on rent.

• Homelessness: The shortage contributes to homelessness.

California Housing Context

Past Historical Housing

The post-World War II housing boom was a period of rapid home construction and price increases driven by a number of factors, including:

Economic prosperity: The 1944 Veterans Administration loan program and tax benefits for home ownership increased demand for new homes.

Military mortgages: Returning members of the military were able to get affordable mortgages.

Migration: Many Americans moved from cities to suburbs due to the growing demand for single-family homes and the widespread ownership of cars.

New technologies and materials: New materials and technologies were developed to build better and cheaper living units.

New house designs: New house designs focused on privacy, efficiency, and an informal style of living.

Lifted restrictions: Restrictions on home building were lifted after World War II.

More than 40 million new homes were constructed between 1946 and 1975. By 1950, annual home construction had reached an all-time high of 1,692,000

Present California Housing Crisis

Housing shortage

California has been experiencing a housing shortage since the 1970s. In 2017, the state was estimated to be short 3-4 million housing units. The gap between the number of homes needed and the number built has been growing for decades.

High housing costs

Housing costs in California have been rising rapidly for decades. From January 2020 to September 2024, monthly payments for a mid-tier home grew 75% and for a bottom-tier home grew 80%. This is much faster than the growth in average hourly wages (22%) and rents (34%).

Home ownership

California has the second lowest rate of home ownership in the nation, behind New York. Home ownership is especially low among young adults, and Blacks and Latinos of any age. Supply chain problems

The COVID-19 pandemic caused supply chain problems that drove up material prices.

Gentrification and corporate landlords

Real estate speculation has driven community housing options into private homes. Corporate landlords spend millions of dollars fighting renters' rights and opposing rent control.

Inequality

The housing crisis is contributing to growing inequality and limiting opportunities for younger Californians.

Fewer homeowners

Homeownership rates are at their lowest since the 1940s.

CA 2019 SB - 8/9/10

The Housing Crisis Act of 2019, as amended by SB 8 (California Government Code Section 66300 et seq.), prohibits the approval of any proposed housing development project (“Project”) on a site (“Property”) that will require demolition of existing dwelling units or occupied or vacant “Protected Units” unless the Project replaces those units as specified below. The replacement requirements below apply to the following projects:

Discretionary Housing Development Projects that receive a final approval from Los Angeles City Planning (LACP) on or after January 1, 2022,

Ministerial On-Menu Density Bonus, SB 35 and AB 2162 Housing Development Projects that submit an application to LACP on or after January 1, 2022, and

Ministerial Housing Development Projects that submit a complete set of plans to the Los Angeles Department of Building & Safety (LADBS) for Plan Check and permit on or after January 1, 2022.

Senate Bill (SB) 9 (Chapter 162, Statutes of 2021) requires ministerial approval of a housing development with no more than two primary units in a single-family zone, the subdivision of a parcel in a single-family zone into two parcels, or both.

SB 10 provides tools for local governments to zone for up to ten homes per parcel in transit-rich areas, or urban infill sites. SB 10 maintains local control, as a local legislative body must pass a resolution to adopt the plan.

Sacramento Specific Needs

Sacramento County needs more affordable housing, and the number of homes needed varies by source:

Sacramento County Housing Need Report 2024

Sacramento County needs 63,118 more affordable rental homes to meet current demand.

California Housing Partnership Corporation

Sacramento County needs 58,383 more affordable rental homes for low-income families.

SACOG's 2020 Regional Housing Needs Allocation

The Sacramento region needs to plan for the construction of nearly 27,000 housing units for moderate-income residents and more than 60,000 units for low- and very-low-income earners.

Sacramento is California's fastest-growing major city, and is a popular destination for people looking for more affordable housing options than the Bay Area. However, Sacramento is still facing a housing crisis, with 83% of extremely low-income households paying more than half of their income on housing costs.

https://chpc.net/wp-content/uploads/2024/05/Sacramento_Housing_Report.pdf

https://chpc.net/wp-content/uploads/2019/05/Sacramento-HNR-2019.pdf

https://sachousingalliance.org/2023-sacramento-region-housing-needs-reports/

What behind Sacramento’s Missing Middle Housing (MMH) Interim Ordinance rule

Under the new Missing Middle Housing (MMH) Interim Ordinance rule, the City of Sacramento will substitute a maximum floor area approach for conventional density restrictions, allowing residential buildings up to 2.5 stories on land formerly set aside for single-family houses. Along with cottage courts and smaller residences on limited lots, this implementation of the Missing Middle Housing (MMH) Interim Ordinance rule allows a range of housing configurations including four-plexes, six-plexes, and even ten-plexes. These new multi-unit homes bridge the gap between single-family homes and more expansive apartment complexes by harmonically merging into current communities without changing their identity.

Site Specific Context

City of Sacramento Sites (5 max)

Pocket/ Greenhaven

East Sac

Land Park

City College

South Sac

Del Paso Heights

Oak Park

Context r1 zoning map - add source

Context FAR - add source