Local housing still competitive within California

Rental affordability remains consistent while homeownership affordability declines

Description of indicator:

The NAHB/Wells Fargo Housing Opportunity Index represents the percentage of homes sold within a county that a median-income household can afford. Fresno County represents the San Joaquin Valley average and is contrasted to other benchmark cities within California. Rental affordability represents the income needed to afford each county’s two-bedroom Fair Market Rent (FMR), which includes rent and most utilities.

Why is it important?

Home ownership increases neighborhood stability and helps ensure that residents have a long-term vested interest in their community. Affordable housing is necessary for a community to absorb the additional workforce associated with economic growth. Home-ownership affordability affects a business’s decision to locate in a region.

As housing and rental prices increase, workers may be forced to spend disproportionate amounts of their income on housing, constricting spending on other necessities. Also, workers may be forced to relocate farther from their workplace, spending more time commuting and reducing their quality of life.

How are we doing?

Fresno County historically: In the past seven years, Fresno County’s home-ownership affordability rate has significantly declined, particularly in 2005. Home prices have risen more than 60%, more than three times that of rent. However, the income needed to afford a two-bedroom FMR has not risen as dramatically.

Fresno County as a representation of the San Joaquin Valley contrasted to other regions: Although home prices and rental affordability are decreasing, the San Joaquin Valley (as represented by Fresno County) is still the most affordable large metro area in California. Fresno County is nearly four times as affordable as Los Angeles County, three times as affordable as San Diego County and twice as affordable as San Francisco.

Plans for the future:

Plans for 2006 include the implementation of the San Joaquin Valley Affordable Communities Initiative. This will be a yearlong process of developing a consensus strategy to increase housing affordability for working families throughout the Valley. The Fresno Housing Alliance is also working on strategies to improve housing affordability.

For more information, visit www.angelfire.com/alt2/fhousingalliance