The housing market refers to the supply and demand for homes, and the health of the housing market is driven by the availability and type of housing units and housing prices. In a tight housing market, prices of homes skyrocket due to low supply (i.e., few units are available) and high demand (i.e., many are seeking to reside or invest in the area).
Skyrocketing housing prices can fracture a community. Households who choose to stay may be forced to make unhealthy trade-offs, such as spending a larger percentage of their income on housing and leaving less money to spend on nutrition, health care, and other essential needs. High housing costs may also force households to live in crowded conditions and/or live in poorly maintained, but more affordable, housing. These choices are associated with a spectrum of health issues from food insecurity to psychological stress. Other households may choose to move out of the county. This out-migration can result in longer commutes, which are associated with lower physical activity, overweight/ obesity, higher stress and high blood pressure. The combined impact of these housing choices can increase the risk of developing chronic diseases, such as heart disease and diabetes. The out-migration may also lead to a loss of both workers and young families. The decision for young families to move is reflected in Napa school enrollment which has experienced gradual decline of 1% annually since 2015.
Napa County has both a strong demand and decreased supply of housing. In 2016, both the state and Napa County experienced low availability of housing stock for sale or rent, 2.3% and 2.6% respectively. Between 2011 and 2016, the available housing supply in Napa County and statewide dropped, with Napa County’s supply deceasing nearly 23% in those 6 years (graph on the right). Vacancy type further describes the type of housing stock available. In 2016, nearly half of housing vacancies in Napa County were comprised of seasonal, recreational or occasional use and second homes (sold, but not occupied) (graph below). Conversely, less than a quarter of all vacancies in Napa County were units for rent or sale; statewide about 30% of vacant units are for rent or sale. Units in the “other vacant” category may be vacant for a variety of reasons, including, but not limited to, foreclosure, legal proceedings, preparing for rent/sale, current repair/renovation, and homes that have been abandoned. The cause of this tight housing market is two-fold: 1) Napa County is an attractive area to live based on its proximity to Bay Area job centers and lower housing prices than many of the nearby metropolitan areas, notably San Francisco and Oakland, and 2) Napa County is a premier vacation destination for people looking to purchase second homes. Recent natural disasters have further tightened the housing market.
Subsidized (or informally, "affordable”) housing refers to a government system that alleviates housing costs for moderate- to low-income residents. This includes public, non-profit and co-operative housing; housing assistance vouchers from the US Department of Housing and Urban Development (i.e., section 8), grants or direct payments; and even loans and tax credits. As communities become “hot” or popular, affordable options for lower-income residents (who are more likely to depend on access to transit, stores and jobs that popular communities offer) may shrink. Subsidized housing helps these residents afford to live in communities with increasing costs, and provides a safety net for people hit with unexpected financial challenges, such as job loss or divorce (AARP Livable Communities (LC) Index). In 2017, Napa County had over 130 active subsidized units per 10,000 people, which was slightly higher than California’s overall of about 116 units per 10,000 people (graph to the right).
Another piece to affordable housing initiatives is inclusionary zoning (IZ), which requires housing developments to have a certain portion or percentage of units affordable by moderate- to low-income residents. IZ is a popular tool for governments to get the private market to subsidize affordable housing. IZ can lessen gentrification and provide stability and security to moderate- to low-income individuals and families. However, several critics point to IZ’s effect on the housing supply, further tightening the housing market (many similar arguments are made for rent control, listed below). Napa County currently has an inclusionary housing ordinance; projects that do not observe the policy will be required to pay an in-lieu fee. Funds from this fee along with the housing trust (section below) are used to construct or rehabilitate affordable housing units.
Housing trust funds are established by government agencies to dedicate portions of public funding to protect, create and promote affordable housing. These funds can be used for a variety of housing needs and are especially important for creating housing opportunities for people with lower incomes in areas where high demand drives up prices (AARP Livable LC Index). Napa County is one of 135 counties nationwide and one of California’s 11 counties to have a housing trust fund, which was established by the Napa Valley Housing Authority in 1992. California also has a fund created in 1985 under the Department of Housing and Community Development.
From the AARP LC Index, “Foreclosures affect millions of Americans and have devastating financial and economic consequences for homeowners and communities alike. To help minimize the risk and impacts of foreclosures, states can regulate mortgage practices, mediate foreclosures, abolish deficiency judgments that make homeowners liable for debt, and enable communities to manage foreclosed properties.” California regulates mortgage servicers, abolishes deficiency judgements and provides tenant foreclosure protections.
From the AARP LC Index, manufactured housing, or mobile home, communities can provide affordable housing options for lower-income families who own their units but not the land underneath. In most states, this land could be sold without giving residents advance notice or any opportunity to purchase the property themselves. California does provide some protections by requiring the owner to provide at least 30 day notice before listing the community property for sale; however, there are many limitations (e.g., the notice is only obligatory for active resident associations and the owner is not required to negotiate in good faith with the residents).
Rent control, or the governmental management or capping of rent, is limited in California; only 15 cities (none of which are in Napa County) have rent control policies. For the cities that do have ordinances, regulations are limited by the Costa-Hawkins Rental Housing Act, passed into California state law in 1995. This act protects a landlord’s right to raise rent to market price once a tenant vacates (i.e., no “vacancy control”) and also prevents cities from enacting rent control on single family homes, condominiums and units built after February 1995. A proposition to repeal the act was on the 2018 November California ballot but did not pass. In light of the shortage of affordable and available housing statewide, many proponents advocate rent control’s benefits: lower rent, reduced rates of gentrification, community stability and increased security for vulnerable populations. However, others argue that stronger rent control will make the housing crisis worse due to decreased supply from threats to landlords and businesses.
From the AARP LC Index, homes built for easy access are becoming more necessary as the population lives longer. At a minimum, a house should be visitable for someone in a wheelchair, which entails a zero-step entrance, wide doors and hallways and a ground-floor bathroom. Currently, neither Napa County nor California have established voluntary or mandatory policies to have housing with accessible features.
For more information – Visitability
The Make Them Visible Foundation (MTVF) raises funds and awareness for organizations combating poverty and homelessness. MTVF produced the video below as as a social experiment to reveal how our society sees our homeless neighbors.
Bay Area Regional Health Inequities Initiative. (2016) Displacement Brief. Retrieved November 5, 2018 from http://barhii.org/housing-affordability-and-health/
Dieleman, F., & Clark, W. A. (2017). Households and Housing Choice and Outcomes in the Housing Market. New Bruswick: Routledge.
Office of Health Equity. (2018). Healthy Communities Data & Indicators Project. Retrieved November 5, 2018 from https://www.cdph.ca.gov/Programs/OHE/Pages/HCI.aspx
Thorsby, D. (2018). Your Guide to the Housing Market. Retrieved November 5, 2018 from https://realestate.usnews.com/real-estate/articles/your-guide-to-the-housing-market
Conley, A. (2018). Examining the efficacy of rent control: An empirical analysis for consideration of rent control in Seattle (Doctoral dissertation).
Diamond, R., McQuade, T., & Qian, F. (2018). The effects of rent control expansion on tenants, landlords, and inequality: Evidence from San Francisco (No. w24181). National Bureau of Economic Research.
Rosen, K. T. (2018). The Case for Preserving Costa-Hawkins-The Potential Impacts of Rent Control on Single Family Homes. UC Berkeley Fisher Center.