Housing Permits

Where are we permitting new housing units?

Housing Permits

Read the introduction
Definition: 
Housing growth is measured in terms of the number of units that local jurisdictions permit throughout a given year. A permitted unit is a unit that a city or county has authorized for construction.

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.

Regional Performance
Permits for new housing remain well below levels seen in the 1970s and 1980s, despite an affordability crisis and a significantly larger population.

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.

Historical Trend for Housing Permits

 
 
Regional Distribution
In 2016, fewer than one in five units for which permits were issued could be classified as affordable housing – that is, housing affordable to very low-and low-income households.

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

 
Local Focus
Housing for above moderate-income households made up the vast majority of permits issued in 2016 for all Bay Area cities.

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

1990s 2000s Today
 
Top Cities and Unincorporated Areas for Permitted Units 1990 through 1999
  1. San Jose: 2,880 units/year
  2. San Francisco: 1,450 units/year
  3. Oakland: 1,170 units/year
  4. Santa Rosa: 810 units/year
  5. Fremont: 740 units/year
Top Cities and Unincorporated Areas for Permitted Units 2000 through 2009
  1. San Jose: 2,830 units/year
  2. San Francisco: 2,180 units/year
  3. Oakland: 1,460 units/year
  4. Oakland: 1,010 units/year
  5. Brentwood: 930 units/year
Top Cities and Unincorporated Areas for Permitted Units 2010 through 2013
  1. San Francisco: 2,800 units/year
  2. San Jose: 2,700 units/year
  3. Dublin: 700 units/year
  4. Oakland: 560 units/year
  5. Sunnyvale: 540 units/year
Average number of units:
2,831
per year
Type of Permits
Majority Multi-Family
Majority Single-Family
Average Units Per Year
50 units
100 units
500 units
1,000 units
National Context
Even with a strong economy and steady population growth, the Bay Area continues to issue permits for housing at a slower rate than Sunbelt metros.

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

 
Sources: 

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)

http://www.mychf.org/cirb/

U.S. Census Bureau: Building Permit Survey – via Federal Reserve Bank of St. Louis

New Private Housing Units Authorized By Building Permit (1988-2015)

https://research.stlouisfed.org/fred2/

U.S Census Bureau: Decennial Census

No link available (1960-1990)

http://factfinder2.census.gov (2000-2010)

California Department of Finance

Table E-8: Historical Population and Housing Estimates (2001-2009)

Table E-5: Population and Housing Estimates (2011-2016)

http://www.dof.ca.gov/Forecasting/Demographics/Estimates/

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)

https://www.census.gov/programs-surveys/popest.html

Image: Flickr (Creative Commons license), Photographer: Thomas Hawk, 3016243694_ddea307810_o.jpg

Methodology Notes: 

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:

 

 

Clayton, 1990-2007

Lafayette, 1990-2007

Moraga, 1990-2007

Orinda, 1990-2007

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.

 

 

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