A nationwide study conducted by Wallethub found that Berkeley and San Francisco are tied for last place in home affordability, as measured by home price as a percentage of income.
The study found that, on average, home prices are about 13 times greater than annual incomes in Berkeley and about 14 times greater in San Francisco. The cities tied for last place — along with Glendale, Santa Monica and Santa Barbara — because all cities where home prices were at least 11.5 times greater than annual income were awarded zero points for home affordability, according to Diana Popa, Wallethub’s communications manager.
“There’s no one cause (for the affordable housing crisis),” said Sid Lakireddy, president of the Berkeley Property Owners Association. “But you can point to a lot of bad policy that’s been made over the years.”
Lakireddy said the establishment of rent control in 1980 contributed to the current housing crisis by disincentivizing the creation of new housing. Paired with more stringent building regulations and population increases in recent years, this policy, he said, set off a domino effect that led to the city’s current housing affordability crisis.
Igor Tregub — vice chair of the Housing Advisory Commission — said, however, that the affordable housing crisis was not spurred by rent control but rather by the establishment of the 1995 Costa-Hawkins Rental Housing Act, which allows landlords to establish initial rent rates independent from rent ceilings whenever a unit undergoes a change in tenancy.
“I am convinced that rent control remains the most … effective displacement prevention measure in Berkeley,” Tregub said.
While Lakireddy suggested deregulation could encourage development and address the housing crisis, Tregub said increased regulation ensures that the housing created in Berkeley is affordable.
Tregub added that the city’s recent increase of its mitigation fee from $28,000 to $34,000 per unit, and the increase in the percentage of on-site affordable units that can be built in lieu of the mitigation fee from 10 percent to 20 percent, are “some of the most progressive, inclusionary housing requirements … in the country.”
Between 2007 and 2014, 51 percent of new Berkeley buildings deemed necessary by the Association of Bay Area Governments’ regional housing need allocation standards were issued permits. Of the total permits issued, 93 percent of permits for above moderate-income housing have been issued, while 4 percent of permits for moderate-income housing, 21 percent of permits for low-income housing and 25 percent of permits for very low-income housing have been issued.
“There are some people in Berkeley who say there is too much development going on, and I think they’re wrong,” said Councilmember Kriss Worthington. “We’re getting skewered for luxury housing, but the solution isn’t to ban luxury, it’s to make more affordable housing.”