by Rik Keller
This article presents data documenting housing growth rates and cost increases for the U.S., California, and the Sacramento–Roseville–Arden-Arcade MSA (Metropolitan Statistical Area; consisting of El Dorado, Placer, Sacramento, & Yolo counties) as a whole, as well as selected jurisdictions within the MSA and neighboring jurisdictions in Solano County.
The purpose of presenting this data is to provide context for land use policy discussions and to place local growth characteristics of Davis in context with the greater region. There are mistaken assumptions and falsehoods not supported by evidence that are frequently repeated in such discussions, and my hope is that this compilation of statistics will help guide discussion about the challenges our community faces with an eye to a balanced approach that includes a careful examination of evidence.
The data in Table 1 shows annual average housing unit growth rates from 2010 to 2017, along with average annual median market rate housing rent increase rates from 2011 to 2018 and average annual median house value increase rates from 2011 to 2017. See detailed notes below the table for sources used and explanation of the time periods. The data used is the best available to the author.
Figure 1 is a chart showing housing unit growth rates by geographic area on their own. Figures 2 and 3 show X-Y scatter plots with the housing growth rates plotted in the x-axis compared to housing rent increases and housing value increases, respectively, plotted in the y-axis. These are intended to show direct comparisons between the two sets of data, along with patterns and trends.
The following is a brief summary of several conclusions looking at the data focused on Davis. I hope that this article and data stimulate further discussion far beyond these few observations.
- Davis had an annual average growth rate for housing units of 0.48% from 2010-2017. As shown in Figure 1, this growth rate was very close to the rate for the United States as a whole (0.59%), California (0.50%), and the 4-county Sacramento MSA region (0.49%), as well as neighboring communities such as Woodland (0.52%) ,and Dixon (0.51%), and Solano County (0.46%). The housing growth rate in Davis was higher than Sacramento County (0.34%) and the city of Sacramento (0.17%), but lower than West Sacramento (0.82%). Placer County had the highest growth rate among counties in the region (0.99%), with the city of Roseville (1.39%) having the highest rate of increase in housing units.
- There were only two jurisdictions (Rancho Cordova and Roseville) that had annual housing growth rates higher than 1% from 2010-2017. This is of particular note because the City of Davis has an annual housing growth rate “policy guidance” of 1% that “represents a cap that is not to be exceeded except for units that are specifically exempted or allowed by the City Council as an infill project with extraordinary circumstances and community benefits” (source: City of Davis). As shown in the table, this 1% cap does not represent a limit to development in Davis compared to existing housing growth rates in the region that are generally far below 1% and projected to stay at low levels in the future.
- As shown in Figure 2, Davis experienced one of the lowest rates of rent increases in the region from 2011-2018. The city of Roseville had the distinction of having the highest rate of rent increases while it also had the highest rate of housing unit construction. It is often said in certain quarters that an increased housing supply is needed for greater housing affordability [For example, see this article published two days ago in the Davis Vanguard that called housing construction “the engine of affordability”: https://www.davisvanguard.org/2018/10/commentary-cant-build-blocked-litigation-rent-control-answer/] However, in Roseville’s case it is clear that the engine of housing construction has gone hand-in-hand with the highest rate of rent increase in the region.
- Similarly the Davis Vanguard and the development community in Davis often make statements suggesting that the City of Davis’ growth management land use policies make housing less affordable. The data shown in this article demonstrates that this simplistic viewpoint is misleading. While the housing supply in Davis has grown at rates similar to the region as a whole, Davis has experienced rent increase rates much lower than the regional average.
- Figure 3 shows that Davis also experienced THE lowest rate of housing value increase in the region from 2011 to 2017. This reinforces the above point and calls into question the idea that growth constraints in Davis have led to large housing price increases. Meanwhile, communities such as Elk Grove, West Sacramento, and Rancho Cordova that had some of the highest rates of new housing construction also had the highest rates of housing price increases.
Rik Keller is a university instructor in communication studies and social work. He has 17+ years of professional experience in demographic analysis and housing policy & analysis in Texas, Oregon, and California after obtaining his master’s degree in city planning. He is also a 10+ year Davis resident and a current renter.