New UC Berkeley tool paints grimmer picture of SF housing crisis

A new UC Berkeley study paints an even grimmer picture of San Francisco’s housing crisis.

Researchers from the school’s Terner Center for Housing Innovation published a new tool attempting to reframe the way affordability is typically measured.

Their analysis found that 55% of Californians would find it “difficult to get by” if they were to rent in San Francisco.

“My guess would be that San Francisco is probably the single most unaffordable county in the state,” said Issi Romem, a Terner Center research affiliate and co-author of the study.

For upwards of a century, most government agencies have measured housing affordability based on an income and cost analysis of the people that already live in that county, using metrics such as a rea median income , or the combined average household income for those living in a certain municipality.

Housing affordability is normally defined as the percentage of household income that goes towards rent or a mortgage, the study said. Households which spend more than 30% of their income on housing are considered “cost burdened.”

That measure often determines who qualifies for affordable-housing programs.

But Terner Center researchers argued that methodology is flawed because people who live in any given county already must be at a certain income level to reside there. As a result, they said, most studies underestimate housing affordability because residents of a certain area usually don’t represent the totality of income levels of most people across the state. Some people have been excluded from living in certain regions because of the cost of housing there — but their data isn’t part of most affordability metrics.

San Francisco data portrays The City as more affordable than it is because people who live there already have higher incomes, the Berkeley researchers argued.

“When we look at the cost of housing in a place ... we look at the ability to pay of the people who live in that place at the current moment,” Romem said. “What we set out to do here was break that assumption, and instead look at how affordable a place is not to the people who live there now, who are highly selected because we’ve had this half-century of population sorting taking place, but rather the people who might in a place if it were more affordable, or we may want to give the option to live there.”

In essence, the researchers want to find how affordable a county’s housing is for all California residents.

The organization created a method called “inclusive affordability,” which used 2022 data from the Federal Reserve’s Survey of Household and Economic Decisionmaking. The respondents answered a question — “Overall, which one of the following best describes how well you are managing financially these days?” — by choosing from the following replies: “finding it difficult to get by,” “just getting by,” “doing okay” and “living comfortably.”

Analysts then calculated respondents’ cost-to-income ratios, and found that higher ratios correlated with less financial comfort.

In addition to the 55% of Californians who would find it “difficult to get by” living in The City, another 14% said they could afford it while “just getting by.” Sixteen percent said they could afford it while “doing okay” and only 14% said they could afford it while “living comfortably.”

Researchers stressed that these affordability measurements are important because many key government policies are shaped by these metrics — including San Francisco’s state-mandated Housing Element, which calls for The City to build 80,000 new homes in less than 10 years.

Which San Francisco neighborhoods those units will be built in is based on affordability statistics tied to area median income levels, derived solely from data of city residents.

“Low income, very low income, extremely low income — all those things that have exact definitions are all pegged to the income distribution of residents, which is less and less meaningful the more sorted the population that lives in different places is,” Romem said. “In San Francisco, we’ve had decades of housing prices basically pushing out lower-income people and bringing in higher-income people instead of them. ... On average, those moving in are more affluent than those moving out.”