SAN JOSE — Even millennial techies with good jobs are feeling pessimistic about their housing prospects.
In fact, close to 75 percent of Bay Area millennials anticipate moving out of their current homes or apartments in the next five years — though only 24 percent expect to be able to afford the new place they desire.
Those numbers sat at the heart of a public conversation on the region’s housing crunch, presented Tuesday by the Urban Land Institute Silicon Valley. While the crisis affects all age groups, it’s millennials who increasingly, and especially, feel priced out.
“It’s ownership that I want,” Gabriel Alcantar, 29, told the group of panelists that presented an array of findings and opinions on creating a way forward. A Cal graduate, he is 29, a civil engineer in San Jose who was forced out of his North First Street apartment by a rent increase and now rents a room from a buddy. Single, burdened by about $25,000 in student debt and yet hoping to put down roots, he represented the cohort that was under the microscope at the Corinthian Grand Ballroom in the San Jose Athletic Club building.
Is there a solution to the millennials’ situation? Maybe.
“If we can get to creating starter homes again, there will be a market,” said Stockton Williams, executive director of the Urban Land Institute’s Terwilliger Center for Housing in Washington, D.C., which has put a focus on affordable and workforce housing. Keynote speaker at Tuesday’s event, Williams said that the nation’s 53 million millennials — often defined as ages 18 to 36 — represent one-third of the U.S. workforce. And the image of young techies pulling down big salaries doesn’t necessarily match reality: The national median income for millennials is $22,000; many live with parents and friends.
The conversation’s takeoff point was the Urban Land Institute’s report titled “Bay Area in 2015,” based on a survey of 701 adults and itself a drill-down from a larger survey, “America in 2015.”
Slicing and dicing information on housing, transportation and community, the Bay Area report finds the South Bay to have the greatest dissatisfaction with housing options: 33 percent of respondents there are less than happy with those options, compared with 24 percent in the Greater Bay Area and 16 percent nationally. And it reiterates well-known preferences of homeowners and apartment dwellers: to live near transit and conveniences in safe, walkable neighborhoods.
The panelists — a developer, a real estate analyst, a government planner, an academic — outlined a variety of paths toward bringing more affordable housing online. They included some that are widely touted whenever the housing bottleneck gets discussed: giving incentives to private developers; streamlining local regulations to pick up the pace of development; and using so-called inclusionary zoning, whereby municipalities require developers to include a certain percentage of affordable units in their projects.
Creating more affordability “is fundamentally about the redistribution of wealth, from the older to the younger, from the owner to the renter,” said Larry A. Rosenthal, adjunct professor at UC Berkeley’s Goldman School of Public Policy. He advocated the creation of land trusts as “entry points” for affordable development, the legalization of cottages and small backyard dwellings, and the “re-imagining” of modular housing. Suggesting that a renters tax credit could help financially strapped millennials, in particular, he predicted that a “pitched battle in favor of new forms of rent control” will be waged by millennials once they “galvanize themselves” around housing issues, as they have around other topics and political events, such as the presidential candidacy of U.S. Sen. Bernie Sanders.
Kim Walesh, San Jose’s director of economic development, pointed out that the city embraces strategies for mixed-use development and increased housing density — a turnaround from its original sprawling vision. San Jose’s general plan calls for 120,000 new units by 2040, all badly needed as 120,000 new millennials are expected to move to the city by 2035.
Starter homes would help the market, she said, suggesting 600- to 700-square-foot studio condos — a missing element in the current mix — as a good bet “to get people on the real estate elevator.”
Contact Richard Scheinin at 408-920-5069, read his stories at www.mercurynews.com/richard-scheinin and follow him at www.twitter.com/RealEstateRag
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Finding a Bay Area starter home: 5 tips for millennials (and others)
