So how do other municipalities struggling with unaffordable home prices, approach housing policy and deal with regulations and land use?
I compare Honolulu to Santa Cruz on the basis of 1) high price of real estate and 2) high housing ratios: median house price divided by gross
annual median household income (also called the price to income ratio).
As of September 2011: Median home price was $672,500 in San Francisco and $570,000 in both Santa Cruz and Honolulu and in 2010, the Price to Income Ratio (or Median Multiple) was 7.2 in Santa Cruz and San Francisco vs 8.5 for Honolulu. For Honolulu, homes cost 8.5 times more than the gross annual income for an entire household. Per the Demographia Report, Honolulu has the highest median multiple of any city in the US. San Francisco and Santa Cruz tied as the 2nd most unaffordable US cities, with a Median Multiple of 7.2 each.
What the data shows is what we already know -- San Francisco pays workers on average more while housing costs less than Honolulu.
A median multiple of 3.0 or less is considered affordable. 5.1 and over is considered severely unaffordable. Or to get technical: this Median Multiple is: median house price divided by gross annual median household income. According to Demographia, the Honolulu median household income in 2010 was $68,200 and the median home price was $576,600. If you divide these numbers you get 8.5: the Median Multiple.
What the data shows is what we already know -- San Francisco pays workers on average more while housing costs less than Honolulu.
A median multiple of 3.0 or less is considered affordable. 5.1 and over is considered severely unaffordable. Or to get technical: this Median Multiple is: median house price divided by gross annual median household income. According to Demographia, the Honolulu median household income in 2010 was $68,200 and the median home price was $576,600. If you divide these numbers you get 8.5: the Median Multiple.
How the County of Santa Cruz addresses housing affordability can be found in their General Plan Housing Element. Recently discovered: County of Santa Cruz's estimate on the potential number of Accessory Dwellings or 2nd Units.
Instead of identifying specific properties, they limited their analysis to regions and used factors (ie. simple percentages). What the report doesn't quantify is the number of illegal units built -- ie. properties that have a 2nd unit but did not apply for a 2nd unit permit. But considering that Santa Cruz Housing Element states that they will be looking into ways of legalizing non permitted units, i suspect they are well aware of the problem. (see previous blog post on Santa Cruz affordability and rent restrictions)
References:
- Demographia's 2011 International Housing Affordability Survey
- Santa Cruz County Association of Realtors: http://www.scaor.org/marketstatistics.php
- Honolulu Board of Realtors - Sept Statistics: http://hicentral.com/pdfs/HBR.NRWeb.0911Stats.pdf
