The Bay Area housing market clearly has rebounded from the Great Recession, as reflected by the 21,000 permits issued in 2016. Still, permit levels have remained flat over the past four years, remaining 13 percent lower than just one decade ago and well below the peaks of the 1970s and 1980s. Over the long term, much of this decline is attributable to slowing development patterns in Contra Costa and Alameda counties as the region’s mid- and late-20th century suburban communities were built out. North Bay counties saw a similar slowdown in units for which permits were issued. In Sonoma County, for example, the total number of units for which permits were issued has dwindled as single-family residential development declined in Santa Rosa.
In contrast to population statistics, which reveal past trends, information on housing permits acts as a leading indicator of likely growth in the near future. During the period of expansive growth across the Bay Area over the last half-century, most of the permitted units in the region were single-family homes. As growth returns to Big Three cities, permitting rates have shifted toward a prevalence of multi-family homes, which range from duplexes to apartment buildings. This trend is most noticeable in cities closest to the Bay. Most of the units permitted today will be constructed in the next few years.
Despite a growing population and workforce, the number of permits issued in the Bay Area in 2016 remained flat, failing to meet the demand for more housing and further exacerbating the region’s housing affordability crisis. The lack of permitting activity has even even more pronounced for affordable units. Just 11 percent of units for which permits were issued will be affordable to very low- and low-income households, despite the fact that these households constitute around 40 percent of all households in the region. San Francisco leads the region in issuing permits for affordable housing, approving nearly 30 percent of the region’s affordable housing since 2014.
2016 Housing Permits by Affordability Level
Permits for housing affordable to low- and moderate-income households largely are concentrated in inland communities far from major job centers. Cities like Pittsburg, Pleasanton, and Antioch experienced surges in permits for low-income housing, while moderate-income housing permits soared in suburban Livermore, Vacaville, and San Ramon. Among the Big Three cities, San Francisco issued the most permits for both very low- and low-income housing units. San Jose issued nearly as many permits for very low-income units, but fell short of San Francisco’s low-income permit total. A notable exception to this geographic trend was Mountain View, which permitted over 100 low-income units in 2016.
Housing Growth by City and Unincorporated Area by Decade
- San Jose: 2,880 units/year
- San Francisco: 1,450 units/year
- Oakland: 1,170 units/year
- Santa Rosa: 810 units/year
- Fremont: 740 units/year
- San Jose: 2,830 units/year
- San Francisco: 2,180 units/year
- Oakland: 1,460 units/year
- Oakland: 1,010 units/year
- Brentwood: 930 units/year
- San Francisco: 2,800 units/year
- San Jose: 2,700 units/year
- Dublin: 700 units/year
- Oakland: 560 units/year
- Sunnyvale: 540 units/year
While the Bay Area issued more permits per capita than its peers in the Northeast, it continued to fall short of permitting rates seen in Sunbelt metros. Metros across the southern United States issued permits for housing as substantially higher rates since 1990, mostly consisting of permits for single-family homes. In contrast, the Bay Area had one of the highest shares of multi-family housing permits in the nation, falling just short of New York, Chicago, and Los Angeles with nearly 70 percent of permits authorizing multi-family development.
Metro Comparison for Housing Permits
Construction Industry Research Board
Table 3: Residential Units and Valuation (1967-2010)
No link available
California Homebuilding Foundation/Construction Industry Research Board
California Construction Trends (2011-2015)
U.S. Census Bureau: Building Permit Survey – via Federal Reserve Bank of St. Louis
New Private Housing Units Authorized By Building Permit (1988-2015)
U.S Census Bureau: Decennial Census
No link available (1960-1990)
California Department of Finance
Table E-8: Historical Population and Housing Estimates (2001-2009)
Table E-5: Population and Housing Estimates (2011-2016)
U.S. Census Bureau: Intercensal Estimates
Intercensal Estimates of the Resident Population (1980-1989)
Population Estimates (1990-1999)
Annual Estimates of the Population (2000-2009)
Annual Estimates of the Population (2010-2015)
Image: Flickr (Creative Commons license), Photographer: Thomas Hawk, 3016243694_ddea307810_o.jpg
Single-family housing units include detached, semi-detached, row house and town house units. Row houses and town houses are included as single-family units when each unit is separated from the adjacent unit by an unbroken ground-to-roof party or fire wall. Condominiums are included as single-family units when they are of zero-lot-line or zero-property-line construction; when units are separated by an air space; or, when units are separated by an unbroken ground-to-roof party or fire wall. Multi-family housing includes duplexes, three-to-four-unit structures and apartment-type structures with five units or more. Multi-family also includes condominium units in structures of more than one living unit that do not meet the single-family housing definition. Each multi-family unit is counted separately even though they may be in the same building. Total units is the sum of single-family and multi-family units. County data is available from 1967 whereas city data is available from 1990. City data is only available for incorporated cities and towns. All permits in unincorporated cities and towns are included under their respective county’s unincorporated total. Permit data is not available for years when the city or town was not incorporated.
Permit data is missing for the following cities and years:
San Ramon, 1990
Building permit data for metropolitan areas for each year is the sum of non-seasonally adjusted monthly estimates from the Building Permit Survey. The Bay Area values are the sum of the San Francisco-Oakland-Hayward MSA and the San Jose-Sunnyvale-Santa Clara MSA. The counties included in these areas are: San Francisco, Marin, Contra Costa, Alameda, San Mateo, Santa Clara, and San Benito. Permit values reflect the number of units permitted in each respective year.