San Luis Obispo County is one of the least affordable places to buy a home in the United States — even more so than notoriously expensive areas like New York City and Honolulu, according to a new report by the National Association of Home Builders.
The San Luis Obispo-Arroyo Grande-Paso Robles metro area was the seventh least affordable of 237 metropolitan areas in the final quarter of 2018. According to the report, less than 14 percent of the homes on the market were affordable for a median income family during that quarter.
The median family income for SLO County in late 2018 was $80,600, according to the report.
The report analyzed cities and metro areas around the United States to determine which are the most affordable for homebuyers. It compares annual median family income for the area with current sales prices, mortgage rates and property taxes and insurance to create an affordability index.
San Luis Obispo is more unaffordable than even the infamously expensive New York City — which ranked 23rd in unaffordability — and Honolulu, which ranked 25th.
Local affordability impacts
Part of the county’s affordability problem has to do with the lengthy approval processes developers must go through prior to breaking ground, said Andrew Hackleman, executive director of the Home Builders Association of the Central Coast.
Building additional housing is important to improving the area’s affordability, Hackleman said, citing Gov. Gavin Newsom’s pledge to build 3.5 million homes in California over seven years.
When it’s clear a housing development is a good fit for a community, local leaders should take action and approve it without delay, he said.
“This is, in a very real way, robbing the next generation of the opportunities the previous generation has enjoyed,” Hackleman said.
Jobs and income also play into the county’s affordability problem, said Mike Manchak, executive director of the Economic Vitality Corp. of San Luis Obispo County.
The quality of residents’ jobs can constrain their ability to buy homes in a competitive market, Manchak said. It’s also bad for the community when companies — including Really Right Stuff and Weatherby Inc. — leave the area because the cost of living is so high for their employees, he said.
“One solution to the county’s affordability challenge can be improved by higher wages and higher-skilled jobs through business growth and attraction, particularly with the closure of Diablo Canyon,” Manchak wrote in an email.
The Home Builders Association and the EVC are both participating in the San Luis Obispo County Housing Summit, which will examine potential housing solutions in March.
West Coast, expensive coast
Unsurprisingly, the 17 most unaffordable housing markets in the country were all in California; leading the pack was the king of expensive cities, San Francisco, where only 6 percent of the homes available in the final quarter of 2018 would be affordable for a median-income family.
Other unaffordable markets included Los Angeles, Santa Cruz, Salinas, Anaheim and Santa Ana.
If that’s enough to make you want to hightail it out of the state, maybe consider Cumberland, Maryland or Kokomo, Indiana — the two most affordable metro areas in the country, where almost 95 percent of homes are affordable for median income families.
Here are the 10 least affordable areas:
San Francisco-Redwood City-South San Francisco
Los Angeles-Long Beach-Glendale
San Jose-Sunnyvale-Santa Clara
San Luis Obispo-Paso Robles-Arroyo Grande