Map It!: Housing in the North State
As we ramp up for the 2020 Economic Forecast Conference, we are setting aside this issue of the newsletter to explore data on housing in Northern California. Depending on where you live, the purported “housing crisis” may be a glaring reality or a remote memory, given that much of the state is witnessing the strongest construction growth of the past decade. Here, we dive into the American Community Survey,[1] the U.S. Census Bureau’s annual sampling effort, to better understand how households in our communities, our counties, and our region[2] are experiencing the housing environment.
When applying for a mortgage, prospective borrowers must demonstrate that their projected housing expenses will not exceed 30 percent of their monthly income, and over time, this figure has become a widely accepted benchmark for housing affordability. Although it is not an authoritative limit to housing expenses, it suggests an ideal equilibrium to aim for where it is likely that a household could sustainably meet all of its other month to month needs in addition to housing. Our first map is a visualization of what proportion of the households in each ZIP Code reported rental expenses totaling 30 percent or more of the household’s aggregate income.
[1] The data presented below are drawn from the 2017 American Community Survey 5-Year Estimates. For rural areas, these aggregations of data across five consecutive survey years provides more reliable, consistent figures.
[2] We focus our analysis on the twelve-county service region of California State University, Chico, including Siskiyou, Modoc, Trinity, Shasta, Lassen, Tehama, Plumas, Glenn, Butte, Colusa, Sutter, and Yuba Counties. This footprint is commonly referred to as the “North State” since coastal communities face a unique set of economic, environmental, and social conditions that are more like those of other coastal counties rather than those of inland counties.
Clearly, there are ZIP Codes in Siskiyou, Modoc, Lassen, Shasta, Trinity, Butte, Tehama, Yuba, and Sutter Counties where upwards of 80 percent of households spend at least 30 percent of their household income on gross rent (gross rent includes utilities and fuels). To gauge the extent to which affordable rental housing is a challenge in the North State, we also visualized the proportion of households in each ZIP Code that reported rental expenses totaling 50 percent or more of the household’s aggregate income.
Across Siskiyou, Trinity, Shasta, Tehama, Butte, and Yuba Counties, there are multiple ZIP Codes where more than 60 percent of households spend at least 50 percent of their income on rent. Though some of these areas overlap with urban centers where housing competition would be expected to drive prices above rural areas, the hotspots for high housing costs relative to incomes do not exclusively overlap with concentrated populations. It is likely that in rural areas, elevated household poverty driven by localized demand for unskilled labor in low-wage jobs, or by fixed incomes, could play into this skew towards proportionately large expenditures on rental housing.
Housing costs facing home owners present an entirely different set of drivers. Below, we conclude our snapshot of housing challenges in the North State by mapping the median percentage of household income spent by home owners with a mortgage on their housing expenses. In this case, housing expenses incorporate mortgage payments, mortgage insurance, premiums for other types of risk-based insurances (property, fire, flood), and utilities. The median value is the mid-point of all households’ reported housing expense totals by ZIP Code. High percentages of household income being diverted to housing costs point to areas where it may be difficult for a substantial portion of the local workforce to attain their dreams of homeownership given their wages. It may also be difficult for the workforce to live and work in the same community in these areas, and it is probable that some portion of the residents are commuting to neighboring areas for work so that they can afford a home.
Beyond simply having limited income, there are other reasons why housing expenses may consume a large percentage of homeowners’ wages. Access to utilities may be limited and costly in remote areas. It is also suggestive that many of the hotspots for high proportional costs of homeownership adjoin or overlap national forests. The elevated wildfire risk and incidence in these regions, and increasing costs of fire insurance, may be gradually shifting the financial accessibility of housing in these regions for mortgage holders or would-be mortgage holders. A decline in affordable housing access for rural communities could have rippling effects on the viability of our region’s rural workforce and the vitality of these places.
Are you ready to join the dialogue about solutions to the complex web of issues surrounding workforce upskilling and growth, housing access and affordability, and long-term economic resilience in Northern California? Register now for a deep dive into Housing for the North State's Future–Exploring Pathways to Meet the Needs of Workforce, Education, and Economic Development.