Housing in the Valley costs less than Bay Area and SoCal. That doesn't mean it's cheap

Fresno County remains one of the state's more affordable areas for housing, compared to coastal a parts of California. But because wages tend to be lower in the Valley than those other regions, housing isn't exactly cheap for many local families.

A series of reports issued last week by Next 10 and Beacon Economics indicates that despite the statewide growth in the number of low-wage jobs, an increasing shortfall in the number of houses and apartments is driving housing costs up, and that is forcing a migration of lower-income families out of the state. At the same time, analysts say, upper-wage earners who can afford higher rents are flowing into California, driving up the housing demand in areas where jobs are concentrated.

"More than a million people left California, net, from 2006 to 2016, and the primary reason was the high cost of housing," Next 10 founder F. Noel Perry told The Bee. "Most of them were in the low-income category."

But Perry and Adam Fowler, director of research for Beacon Economics, said it is likely that higher housing costs in the Bay Area and Southern California are also propelling more people to inland parts of the state, including the Valley, in search of lower housing costs.

"If there's a cap on the housing supply or if communities allow very little new housing, it forces people to get creative," Fowler said. "They'll move (to outlying communities) and drive more, and that bids up the (housing) prices there or create another overcrowding situation. … There is a real ripple effect."

Across the Valley and the state, unemployment rates are lower than they've been in years. "At a high level, the California economy has been doing very well post-recession," Perry said. We're seeing increases in job growth in low-, middle- and high-income sectors."

But most of the jobs that are being gained in California are in lower-wage fields, including hospitality and service jobs. Even with increases in the minimum wage, Perry added, "low-income people are still not able to make it."

As a result, California has a higher proportion of people who are "house burdened," or spending 30 percent or more of their monthly income for housing, than almost any other state in the country, Perry said. The U.S. Census Bureau's 2012-16 American Community Survey estimated that more than 41 percent of California homeowners with a mortgage pay at least 30 percent of their household income for housing, and a whopping 56.4 percent of rental households pay 30 percent or more of their income on rent.

In Fresno County, the median rate for rental housing — the point at which half of homes or apartments cost more and half cost less — was estimated at $901 per month. That compares to the statewide median monthly rent of almost $1,300, according to the census estimates. Across California's 58 counties, the median rent figure ranged from a high of $1,764 in Marin County to a low of $681 in Modoc County.

In the Valley, the median rent was tabbed at $847 per month in Tulare County, $889 in Kings County and $963 in Madera County.

The Next 10 / Beacon Economics report follows an analysis by the California Housing Partnership about the need for more affordable housing for extremely low-income renters in Fresno County.

But Perry and Fowler said the shortage runs across all levels of housing because of one basic economic principle.

"Supply and demand is the whole ballgame," said Perry. "The housing supply has not kept up with demand over the last 30 years." He added that the number of new homes and apartments needed on an annual basis fell short of what was needed. "Now we're way behind, and we have a growing population."

Fowler urged caution when the conversation turns to affordable housing. "If the Bay Area tells us anything, it's that housing is always affordable to someone," he said. Even as lower-income households migrate out of the high-cost communities in and around San Francisco and the Silicon Valley, "there is an inflow of high-income earners."

"If you're not increasing the supply, there's still always someone that it's going to be affordable for," Fowler said. "We need an old-fashioned market-rate (housing) supply as well as affordable housing" for low-income families.

A needs assessment by the state's Department of Housing and Community Development estimates that as of 2015, the city of Fresno alone was in need of nearly 28,000 more housing units — houses or apartment units — to begin to meet its anticipated demand through 2023 for income levels from very low to above moderate.

Costs are not uniform

Even though Fresno County's median housing cost is well below the statewide figure, and is almost half of what it is in Marin County, prices are hardly uniform across the county.

In the heart of downtown Fresno and a few other surrounding neighborhoods, the median costs range from under $300 to $650 per month. In much of northeast and northwest Fresno, the medians are far higher – $1,250 a month or more, and as much as $1,800 or more in some pockets of northeast Fresno and Clovis.

But lower-income households in Fresno County tend to feel the strain of housing costs on the family budget to a greater degree than more affluent homes. The 2012-16 census estimates indicate that of almost 300,000 owner-occupied homes and rental houses and apartments in the county, more than 90,000 are households making less than $35,000 a year and paying at least 30 percent of their income for housing – either a mortgage and other costs of ownership, or rent for a house or apartment.

Across all income levels, the number of households that are "housing burdened" in Fresno County is more than 125,000.

How much does housing cost in Fresno?

An analysis of U.S. Census Bureau data illustrates the median monthly cost of housing (owned or rented) in Fresno County by census tract. Click on a tract to see details for that area, including the total number of occupied housing units, median monthly cost, and number of rental units and median monthly rent. Source: U.S. Census Bureau 2016 American Community Survey. Map: Tim Sheehan / The Fresno Bee.

Fowler and Perry said that closing the gap in housing needs will require a two-pronged approach that involves not only generating construction of more houses and apartments, but also ensure that families have incomes to be able to afford them.

"There's no silver bullet that's going to solve the housing problem for us," Perry said. "It's going to take a series of many decisions at the state level and by cities and counties." He added that most decisions affecting the availability of housing take place with city councils and county boards of supervisors. "Those are the jurisdictions that will make the decisions about housing development projects," he said.

"We have to build more housing, it needs to be in the areas where job growth is occurring, and it needs to be affordable for families," Fowler added.

This story was originally published May 4, 2018 at 4:18 PM with the headline "Housing in the Valley costs less than Bay Area and SoCal. That doesn't mean it's cheap."