San Diego and other California markets are among the least affordable nationwide because home building has not kept up with population growth, according to a study released Friday.
The online real estate service Zillow ranked U.S. metropolitan areas by the number of new housing permits for every every new 1,000 residents and found that six of the 10 areas with the lowest rate of building were in California. San Diego ranked fifth lowest nationally.
The report comes as San Diego struggles with neighborhood opposition to growth in such areas as Carmel Valley, Escondido and Bay Park while new residents continue to arrive. On Thursday, the Census Bureau reported that San Diego County added 41,000 residents between July 1, 2013, and July 1, 2014.
Here is how California’s metro areas compared to the U.S. average in building permits issued per 1,000 new residents over the period 2012-2014:
- Sacramento — 159
- Riverside — 167
- Los Angeles — 187
- San Diego — 188
- San Francisco — 193
- San Jose — 294
- U.S. Average — 384
Zillow said affordability is best in places that either have slow population growth — such as Detroit — or have met new growth by building new housing units — such as Chicago.
“As the economy continues to improve, more Americans are slowly moving off of their buddies’ couches and out of their parents’ basements into homes of their own, first likely as renters and then eventually as homebuyers,” said Zillow Chief Economist Stan Humphries. “Unfortunately, the supply of affordable homes, especially affordable rentals, is insufficient in many areas to meet this growing demand.
“As a result, the competition for those homes that are available can often be fierce, driving up prices and contributing to worsening affordability. More construction will help ease the crunch, and getting a mortgage is also getting easier, which will help more current renters transition to homeownership and further ease rental inventory shortages. But these fixes won’t happen overnight.”
In San Diego, Zillow estimates, mortgage payments currently take 34.0 percent of income while rents require 43.2 percent — both well over the national average.