SAN DIEGO– As the price of housing skyrockets, it’s becoming even less affordable for some homebuyers. A new report on the 2022 housing affordability by ethnicity conducted by the California Association of Realtors found a gap remains wide between certain ethnic groups.
“It’s very challenging here in Coastal California to provide affordable housing, the value of the land is quite high,” said Tony Kranz, Encinitas mayor.
Kranz said the city is planning for 2,100 multi-family units, mostly to rent and some to purchase. Currently, 500 units are under construction in Encinitas. Kranz said 20% of the projects will be set aside for low and very low-income residents. Kranz admits 20% will not be enough to create the required 860 low-income units to become state compliant. Kranz said their current plan includes about 360 affordable units so far.
“Because of that are you looking to have more low-income housing? Maybe instead of 20% or higher?” FOX 5 asked.
“We are always considering that,” Kranz said. “The challenge is that there is a place we have to be. We have to do studies that confirm whatever percentage we require the developer can still develop at that percentage. In order for people to work here and live here no question we need (state) subsidies.”
Sujata Raman with the San Diego Housing Commission added, “We all want to close the racial gap, the homeownership gap, the wealth gap.”
The recent report on housing affordability shined a light on a racial homeownership divide. The association states 21% of all Californians earned the minimum income to purchase a home. The association found that 32 percent of white/non-Hispanic buyers could afford a median-priced home in 2022.
The report showed that 31% of Asian buyers can afford a median-priced home. The number fell to 12% for Black and Hispanic/Latino buyers for the same-priced home.
“One being, their debt-to-income ratios which is usually 45% for a mortgage loan are much higher than other racial classes. And two the lack of down payment resources, which is not having enough money saved up to be able to buy a home.”
“Seventy-five percent of the buyers we serve through my program are already of color. We have shown that down payments are very crucial to communities of color for them to buy a home and as we expand the programs provide more assistance, we think the gap should get narrower in the coming year,” Raman said.
Kranz said after the projects they have planned they are still short 150 units, which they need to meet their housing requirements. Kranz said the city can up-zone with voters’ approval or find city-owned land to convert to affordable housing.
Click here to view the California Association of Realtors 2022 Housing Affordability by Ethnicity report.