It’s no secret that the Bay Area has more jobs than housing.
But a new analysis of 20 metropolitan areas in the U.S. reveals just how much wider that gap is getting here compared with other major employment hubs, adding fuel to political and legal clashes over the region’s notorious unaffordability and strict building rules.
For every new home permitted in the San Francisco and San Jose metro areas from 2009-2019, there were more than three jobs created, according to a report released Wednesday by libertarian-leaning think tank the Manhattan Institute. In San Francisco, home to the worst “jobs-housing mismatch” of the cities studied, there were nearly 3.5 new jobs for every new home. In San Jose, it was 3.2 jobs.
Outside California, each new housing permit equated to 1.7 jobs in Denver, 1.5 in Austin and 1 in Durham.
“Many of the successful metros are struggling to shift housing patterns to permit higher density,” wrote Manhattan Institute senior fellow Eric Kober, the study’s author. “Actions are increasingly being taken at the state and local levels to lift the many regulatory impediments that stop new housing from being built.”
Still, the disconnect between jobs and housing has proved lucrative for some in the Bay Area. Housing prices, rents and average incomes increased more here than in most other cities during the same period.
The pressure is mounting, however, for households bringing in less than $75,000 a year. Workers in the San Jose and San Francisco metro areas are forced to spend more of their incomes on housing than those in almost any other place, Kober found — a tenuous balancing act that could jeopardize the economic future of both the Bay Area and the rest of the country.
“When high-wage, high-productivity metros exclude many of the workers who would want to work there, but can’t find housing that meets their needs and that they can afford,” Kober wrote, “the national economy grows less than it could have.”
The idea of dense development has long been controversial in much of the Bay Area. Concerns about traffic, greenhouse gases and neighborhood character abound in many of the same single-family neighborhoods that have seen home prices surge to record highs during the pandemic. For a new generation of Yes-In-My-Backyard housing advocates, the question is how much longer homeowners should be allowed to keep gaining while would-be buyers and renters remain locked in cutthroat competition.
As the Manhattan Institute report shows — with its eagerness to point out the pitfalls of regulation — housing anxiety has gotten so extreme that it’s blurring ideological lines. In the Bay Area, pro-growth urbanists and anti-regulation libertarians now routinely square off against longtime homeowners, environmentalists, Realtors and “residentialist” politicians over where to build housing that most agree is badly needed.
“You end up with this collective action problem,” said Laura Foote, executive director of pro-housing lobbying group YIMBY Action. “Every city wants to say, ‘Well, make the next city over do it.’”
A housing shortage isn’t a quick or easy thing to fix — and it’s also getting worse in top destinations for Bay Area transplants, like Austin. But the tension is set to boil over in the coming months, as the process of coming up with local housing plans to meet new state building targets moves ahead.
State officials are currently calling on the Bay Area to plan for an unprecedented 441,176 new homes between 2023 and 2031 as part of the “Regional Housing Needs Allocation” program. As part of that program, the Association of Bay Area Governments then doles out local housing mandates for cities, towns and counties.
At least a half dozen local governments are already weighing their options to appeal their mandates in a bid to build fewer new homes. It’s uncharted territory after the state program was strengthened in recent years to require cities to “affirmatively further fair housing,” and to enact new penalties for non-compliance — a prospect that Palo Alto Mayor Tom DuBois has warned could prompt “a revolt of cities.”
Advocates like Foote want to up the pressure on California cities that have fallen short of new housing goals for decades, and instead skew toward building new high-income housing or tying up controversial projects in long review processes.
“It’s like moving the broccoli around on your plate,” Foote said. “We can’t let it continue.”
One such battle over local building plans came to a head Tuesday night in the North Bay suburb of Corte Madera, where the town council voted to appeal its current direction to build 725 new homes. The town already approved more housing than it was required to in the last six years — 270 new homes, 195 of them catering to high-income residents, town records show — so officials argue that the town should only be required to build 500 homes this time around.
“Corte Madera has proven its commitment to thoughtfully plan for, facilitate, and integrate new housing development into our community, helping to address the region’s affordability and equity issues,” the town council wrote in a letter to state housing officials. The letter also cited a lack of public transit, flood risks and a projection that the city could actually lose jobs in the coming years to justify the appeal.
Even renters who can afford Corte Madera’s $4,000-a-month average rent are increasingly vocal about a lack of long-term options in a city where the median home now sells for $1.7 million, according to the National Association of Realtors. Despite the environmental concerns raised in Corte Madera’s housing appeal, research by the Bay Area Council shows that workers priced out of inner suburbs often commute greater distances for affordable housing, adding to traffic and emissions.
While the political gears turn, YIMBY Action is part of a pro-housing coalition training 400 volunteer “housing element watchdogs” across the state to keep an eye on their own cities’ housing plans. The advocacy group is also suing the state to increase housing requirements, and supporting state and local efforts to eliminate single-family zoning — an increasingly common proposal to help address decades of housing segregation.
With statewide housing reforms slow to materialize in a state famous for its deference to “local control,” Foote expects a tangled web of bureaucratic appeals, lawsuits and activist campaigns as Bay Area cities chart a path forward.
“Now we’re living through the local control way,” she said.
Lauren Hepler is a San Francisco Chronicle staff writer. Email: lauren.hepler@sfchronicle.com; Twitter: @LAHepler
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