Vallejo may be losing its rep as an affordable Bay Area place to live, study shows

Even Vallejo, which is among the very few Bay Area cities where those priced out of the regional market have traditionally been able to go and still be in the Bay Area, is seeing people migrating out for more affordable digs, a new study shows.

The Metropolitan Transportation Commission and Association of Bay Area Governments recently released updated data for five equity indicators on Vital Signs. Findings from the latest data on jobs by wage level, housing affordability, displacement risk, migration, and poverty were all published earlier this month. A main finding is that even in Vallejo, where home prices and rents are lower than anywhere else in the Bay Area, people are being priced out.

While the share of renters “excessively burdened” by housing costs has generally increased across Bay Area counties since 1980, San Francisco renters have followed a different trend, according to the study’s authors. In 2017, they said, only 28 percent of San Francisco renter households were excessively burdened by housing costs — the city’s lowest share on record. This trend is largely because of rising incomes for renter households, as high housing costs lead many lower-income renters to seek cheaper housing outside of San Francisco, the authors said.

Displacement risk has become a regional issue in recent years, through a combination of rising housing prices, scarce affordable housing production and limited tenant protections in many cities, the authors said. While gentrification of urban neighborhoods has long created displacement risk, the problem can be just as acute in suburban communities like Concord, Hercules, Santa Clara and Petaluma, the authors said.

“Even cities known for providing affordable options to those displaced – such as Hayward, Antioch and Vallejo – have seen increases in displacement risk, leading some residents to seek more affordable housing outside of the region,” they said. “Displacement risk, or the share of lower-income households living in neighborhoods with declining lower-income populations, peaked in 2017. Displacement risk in jurisdictions in the North Bay and along the delta continued to rise in 2017. Cities like Vallejo and Antioch, once seen as affordable options for those that have been displaced, saw a growing number of residents at risk of displacement.”

Some 7,400 more residents moved from the East Bay to counties outside of the region than vice-versa, the report shows. Of those, more than 4,000 moved to San Joaquin County, suggesting that the East Bay, once seen as a more affordable option for housing in the Bay Area, is also becoming too expensive for many residents, leading them to seek cheaper housing outside of the region, the authors said.

While many people have moved outside the Bay Area in pursuit of lower-cost housing, relocation within the Bay Area region is even more common, the authors said. In 2015, there was a net flow of 14,800 people from the three counties closest to booming job centers – San Francisco, San Mateo and Santa Clara – to the more affordable counties of the East Bay, they said. Even within the East Bay, residents continue to relocate from Alameda County to lower-cost Contra Costa County, or north to Solano County, they said.

Those moving out of the Bay Area often choose the closest county beyond the borders of the nine-county region, the authors said. New arrivals to San Joaquin County are disproportionately from Alameda and Contra Costa counties, whereas residents relocating to locations like Los Banos in the Central Valley and Hollister in the Central Coast region often come from Santa Clara County.

Intra-state migration into the Bay Area appears to be driven by proximity to high-wage job centers, with the lion’s share of former Southern Californians choosing San Francisco, Alameda and Santa Clara counties as their new homes, the authors said.

The top five counties people are migrating into Solano County are from Napa, Alameda, San Francisco , Los Angeles and Contra Costa. The top five counties to which Solano County residents are moving are Sonoma, Yolo, Placer, Teton, and Sacramento, the study’s authors say.

“Yes, Vallejo is still one of the most affordable cities of all the Bay Area counties. I believe in every market there will be people priced out, but Vallejo is still very affordable. I believe Vallejo has upside for appreciation and people are still looking to purchase here. With all the projects the city has in the pipeline, I think this has benefited current homeowners and future home buyers looking to move here,” said Solano Association of Realtors President Doug Sprague of Coldwell Banker Solano Pacific.

Sprague said the median price of a home here as of the end of February is $380,000, compared to the median in December 2018, of $390,000. There are currently 158 properties on the market, here, he said.

Sprague added that he thinks the Fed’s recent announcement that there will be no interest rate increases for the remainder of 2019, “bodes well for the housing market here in Vallejo. We should see an increase in sales because of this and the traditional start of the home buying season.”