Beach homes under $400,000: This is the last affordable city on California's coast

About 6½ hours north of San Francisco, the road careens across a treacherous stretch of Highway 101 ominously called Last Chance Grade. From there, the highway dips down past a 2-mile beach and a scattering of hotels, a weathered aquarium, low-slung commercial strips and mostly empty parking lots.

Seagulls circle over the harbor. Plaintive fog horns bellow. Fishing boats bob in their slips. Blink, and you might end up at the Oregon border.

Or linger at the North Coast's last stop. Where else in California can you buy a three-bedroom home on a generous lot, within a short walk or drive of a beach, for less than $400,000? In most of the state, nowhere.

It is possible, however, in Crescent City, the only incorporated town in all of Del Norte County, a rugged, mostly unpopulated and northernmost California county where about 80% of the region's 1,230 square miles are state or national parks. Crescent City and the immediate area is home to one of the state's largest Dungeness crab catches, two historic light houses, a maximum security prison, an annual "Star Wars" festival and some of the world's tallest trees.

"It's a bit like living on an island," said Adam Goldstein, an entrepreneur who moved to Crescent City about eight years ago from the Bay Area.

It's also one of the last affordable coastal cities in California.

On the North Coast, average home sale prices were far lower than any other place along California's coastline: $407,000 in Eureka, $411,000 in Fortuna, roughly $480,000 in McKinleyville and $485,512 in Arcata (all in Humboldt County), according to a Chronicle analysis.

It's a different world from the exclusivity of other beach towns such as Malibu, where average homes sell for $3 million, or Montecito on the Santa Barbara Coast, where homes sell for $5.2 million on average.

Crescent City too boasts dramatic seascapes - but also volcanic sea stacks, herds of Roosevelt elk, a famously wild and never-dammed river and rainy weather earning the region comparisons to the Emerald Isle. And the average home price was $353,000.

"It is quote-unquote affordable," said Eric Wier, Crescent City manager. "But that doesn't mean it's affordable for the people who live here."

Crescent City has a population of nearly 7,000, and that includes, by Thursday's count, 1,845 inmates at Pelican Bay State Prison, a major employer and economic engine for the area. About 40% of the workforce is employed by some form of government, including the prison, schools, the county and city.

The timber industry cratered four decades ago, and the fishing industry has struggled through tsunamis, declining salmon runs and other economic and ecological hits. Wages in Crescent City remain low, and poverty rates are higher than the state average, according to a county report, limiting what residents can spend on housing as prices rise. The city reported that the median value of housing has more than tripled since 2000.

Wier said a recently built 56-unit apartment complex was fully leased before tenants moved in, and a fourplex drew nearly 30 applications within days. More than 500 families remain on a waiting list for housing vouchers.

Bridget Lacey, grants and economic development manager for the city, said tourism-related taxes far outpace other sources of revenue and property taxes are minimal. Crescent City needs visitors to come and spend money.

Lacey said the city's population triples in size around the Fourth of July when a major festival takes over the city's beachfront park with food and tchotchke vendors, fireworks, live music and a parade.

"I remember as a kid camping out on the beach and watching fireworks," Lacey said. "It still takes over the entire town. Everyone comes home."

Visitors exceed 1 million annually, outpacing locals countywide 37 to 1. The proliferation of second homes and vacation rentals is adding pressure to a relatively small housing stock and an extremely tight rental market (vacancy rates hover at 2%). So far the city hasn't placed any limits on vacation rentals (the city's most recent data, from 2024, reports there were 22 vacation rentals within city limits), but last month the City Council told staff to study potential limits and come back with recommendations.

Several school district hires had to back out of contracts because they couldn't find a place to live, according to a city housing report. Some local workers live 30 miles north across the state line in Brookings, Ore.

"Our battle here is inventory," said Kurt Stremberg, a longtime real estate agent.

The toniest neighborhood is Pebble Beach with homes overlooking dramatic sunsets. Stremberg said million-dollar home sales were once rare, but they have increased in recent years.

He has had clients from out of the area reach out wanting to buy homes near a golf course, but, he advises them, the one golf course in all of Del Norte County has struggled to stay open. The entire county is home to about 27,000 residents and, apparently, not enough play golf. The current owner is considering redeveloping the course into housing, he said.

High interest rates and low wages have made it difficult for many local residents, especially young couples, to buy homes.

"That's what's making it difficult for us, we're really dependent on the out-of-area buyer," Stremberg said.

Keeping the region open for business and travel is another challenge. There are two roads in or out: Highway 101 leading south into Humboldt County or north into Oregon and Highway 199, a scenic but narrow route through rugged canyons from the coast to Interstate 5.

Just south of town, Highway 101's Last Chance Grade is so prone to landslides and battered by storms, it shuts down completely on average nine times every year, according to Caltrans, cutting off the only route between Del Norte and Humboldt counties. The only way around is an hourslong detour through the mountains or north into Oregon. The problem is so severe, the state has a $3 billion plan to dig a tunnel.

Starting in May, Caltrans is launching a major overhaul of Highway 199, which will require the highway be shut down completely from 10 a.m. to 2 p.m. on Tuesdays through Thursdays for the next year.

Visitors can fly from Oakland and Los Angeles into Del Norte County Airport, which was built during World War II as a training ground for pilots to test their mettle against powerful Pacific Ocean winds, said airport director Sean Rosenthal.

Growing up in Santa Cruz, Rosenthal said he didn't know Crescent City existed until he met his wife, who has family in town. They moved to Crescent City from Alaska in 2018 and found it a perfect fit for their outdoorsy, reclusive, cozy life. He started as a city building inspector and she took a job at Pelican Bay. Two years ago, he was tapped to run the airport given his experience in the U.S. Air Force and as a private pilot.

"If you love the outdoors, it doesn't get any better," Rosenthal said.

President Lyndon B. Johnson established Redwood National Park in 1968, and Congress expanded it a decade later, in 1978. The park system was designated a UNESCO World Heritage Site in 1980 and today protects about 45% of the world's remaining old-growth coast redwoods.

The region, some say, is still adjusting to the public takeover of so much territory, which has limited development. But it has preserved vast swaths of towering forests and rivers that are the region's greatest economic assets.

One million visitors come annually, and these wildernesses have been the movie sets where dinosaurs roamed in "Jurassic Park" (in Prairie Creek Redwoods State Park), where E.T. soared above land on a bicycle (in Redwood National Park) and the Forest Moon of Endor, home to the Ewoks in "Return of the Jedi" (in Jedediah Smith Redwoods State Park).

Cindy Vosburg, director of the local chamber of commerce, said a state jobs initiative is funneling millions of dollars into the area for projects such as a new performance art center, heavy equipment training program and, potentially, processing plants for meat and seafood, which Vosburg said could be a job and food access game changer.

"Just like any other community we go through the highs and lows - and right now we're at a high," Vosburg said.

Crescent City is the most tsunami-prone place on the California coast, which is both a local challenge and an inspiration (inspiring nameplates like Tsunami Lanes bowling alley and SeaQuake Brewing pub and restaurant). Just offshore, an underwater ridge funnels that energy and shoots tsunamis toward the city and its harbor.

In 1964, a magnitude 9.2 earthquake hit Alaska and triggered a massive tsunami that laid waste to 29 city blocks in Crescent City, wiping away the historic downtown. The city rebuilt quickly, earning the nickname "Comeback Town, USA." But Wier said the buildings thrown up in the 1960s were drab and the city's core has lacked a sense of "there" ever since.

The city is now planning to revamp its core by improving waterfront corridors and walkways, redesigning underused public spaces, upgrading building facades with better aesthetics, and creating a central civic square.

"We have redwoods, we have the ocean, we have this amazing setting, and we need to lean into it," Wier said.

But for lunch, drive down the coast and pick up some Chester's Chicken at the Pem-Mey Fuel Mart in Klamath, find a picnic spot at the river mouth, and "watch all the incredible magic," said Larry Altstatt, a local surfer who lived in Crescent City off and on as a child and returned a decade ago.

Munching chicken strips by the sea this week, Altstatt said he and his wife watched in awe as, they believed, six condors soar overhead. With 10-foot wingspans, California condors are a stunning and rare sight. The continent's largest flying birds, condors were driven to near extinction last century, but scientists with the Yurok Tribe, the state's largest, launched a recovery program. They have so far released 26 condors into the wild in Redwood National Park since 2022. In March, the tribe announced it had spotted the region's first condor egg in more than a century.

At the Klamath River, Alstatt said they watched, stunned, as the condors split off in pairs and soared away. Then a huge bald eagle flew by. Gray whales surfaced in the waves off shore. Altstatt, 79, returned a decade ago after years bouncing between beach towns - Santa Cruz, Monterey, Huntington Beach, the North Shore of Oahu.

"I got homesick, and I came back home," Alstatt said.

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