Affordable/Workforce Housing Study
Chapter One

Chapter One

Monterey County Housing "Least Affordable in U.S."

California has nine of the ten least affordable housing markets in the United States, and Monterey County, according to a 2002 National Association of Home Builders survey, has the "least affordable housing in the United States." Housing prices have increased sharply in the Monterey Bay Area in the last five years. Land in the Peninsula is in short supply and is costly. The demand for housing far exceeds supply.

About 430,000 people live in Monterey County and only 40% own their own homes, compared to the national average of 60%. The economic base made up of agriculture, tourism, government and the military does not supply the high-salary, high-wage jobs demanded by the for-sale housing market. Nearly 50% of new jobs created in Monterey County in the next five years will be service industry jobs with annual wages between $20-40,000. 75% of tourism industry jobs start at minimum wage. Starting salaries in the county are $45,000 for policemen and $43,000 for registered nurses. (2001 figures)

Yet the median home price in Monterey County is $342,500 and the average sales price is $572,000. Increasing housing costs appear to be pressuring residents to relocate to more affordable outlying areas where longer commuting distances create their own set of social and environmental challenges. In some cases, residents may be driven out of the area altogether.

According to the 2001 Monterey County Housing Report, only 23% of county households could afford a single family home at the median price in 1999. The median price in Monterey County is twice the U.S. national average.

• 40% couldn"t afford the median rent.
• 60% are overpaying for housing.
• 43% of Monterey County housing is in need of rehabilitation.

The Association of Monterey Bay Area Governments (AMBAG) has estimated that the FORA jurisdictions (not counting the unincorporated County) will need to produce 3481 housing units by 2007 to keep jobs and housing needs in balance.

These figures indicate that there is a 2.5 times greater need for affordable housing than there is for above-moderate and market rate housing within the FORA jurisdictions.

Many groups, including the Mayors of Monterey County and the FORA board, have conducted workshops and studied housing issues hoping to find a formula that will alleviate the affordable housing shortage.

Mayors" Ad Hoc Committee on Housing Issues

Responding to the affordable housing crisis in 2001, the County Association of Mayors sponsored an Ad Hoc Committee on Housing Issues to make recommendations on "Possible Solutions to Resolve the Housing Crisis." The Ad Hoc Committee on Housing, made up of a distinguished group of professionals from the County, city and nonprofit housing agencies, made 100 recommendations--22 for immediate action, 49 for short term action, 29 requiring long-term action.

The Committee"s number two housing concern on its top ten list was "use Fort Ord now."

FORA Housing Discussions Identify Actions Needed

Much of what should be done in a campaign to develop more affordable housing at Ford Ord"and some of what stands in the way--was discussed in a FORA Board Housing Workshop on October 25, 2001.

Comments from Board members and the Public:

1. Tap the non-profit sector for help in designing workforce housing programs. (see comment #5)
2. Get "industry" guarantees as a mechanism to ensure affordable housing in the region, e.g. employer-based housing from the major segments of the economy in Monterey County.
3. Maintain long term affordability through permanent deed restrictions placed on housing units or use a land trust to accomplish affordability. (see comment #14)
4. Consider more leased land deals as a mechanism to increase affordable housing.
5. Build a mix of all housing types, including a mix of ownership and rental units.
6. Provide incentives to for-profit developers to build affordable housing.
7. Find additional funding to lessen the cost burden for reuse that falls on the jurisdictions.
8. Every jurisdiction needs to create its own fair share in the jobs/housing balance; if one or more cities are being called upon to do more than their share, there needs to be a regional approach to compensating these communities.
9. "Housing does not pay its share of costs for long term public services." So it is not as simple as just increasing tax revenue to address the public service costs associated with creating housing.
10. "Costs are local; revenues are regional." Costs to provide housing fall on the local jurisdictions, but revenues to create the housing are a regional responsibility.
11. CSUMB needs a full range of types and prices of housing to in order to entice faculty, employees and students.

FORA Lists Workforce Housing Strategies in Response to Congress

In August of 2002, FORA responded in a memorandum to the concerns raised by the Subcommittee on Military Construction that FORA was not producing affordable housing.

"FORA staff continues to work on specific programs that could access local resources to provide direct financial assistance to residents from northern Monterey County to purchase homes developed on the former Fort Ord. These include:

• Combining affordable housing redevelopment revenue sources;
• Accessing transient occupancy tax resources;
• Creating a workforce housing financial assistance fund;
• Seeking special grants to provide the financial resources necessary; and
• Pursuing negotiations with market rate developers to increase the amount of work force housing in their proposed developments."

[Return to Fort Ord Issues and Actions]

03.27.03