Fremont Residential Displacement Study Final — Fremont City Council, September 20, 2022

bae urban economics

Fremont Residential Displacement Study Report
Prepared for the City of Fremont
June 10, 2021
bae urban economics
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Table of Contents
EXECUTIVE SUMMARY ................................ ................................ ................................ ................ i INTRODUCTION ................................ ................................ ................................ .......................... 1 FREMONT DEMOGRAPHIC AND HOUSING TRENDS OVERVIEW ................................ ................ 2 Demographic Snapshot ............................................................................................................... 2 Alameda County Income Limits ................................................................................................... 4 Income Level by Race and Ethnicity ........................................................................................... 5 Housing Stock............................................................................................................................... 6 DISPLACEMENT ANALYSIS ................................ ................................ ................................ ........ 7 Multifamily Rent Trends ............................................................................................................... 8 Affordability of Multifamily Rental Market .................................................................................. 9 Multifamily Rental Vacancy Rate ............................................................................................. 10 Home Sale Price Trends ........................................................................................................... 11 Affordability of For-Sale Housing Market ................................................................................. 12 Housing Cost Burden ................................................................................................................ 15 Cost Burden by Race and Ethnicity .......................................................................................... 17 Overcrowding ............................................................................................................................. 18 Housing Choice Voucher Usage ............................................................................................... 19 Overall Residential Vacancy ..................................................................................................... 20 Change in Lower-Income Households ..................................................................................... 21 Change in Lower-Income Renter Households ......................................................................... 23 Housing Unit Type by Tenure .................................................................................................... 25 Affordable Housing Inventory ................................................................................................... 26 Recent Housing Unit Growth .................................................................................................... 27 School District Enrollment Trends ............................................................................................ 28 Special Needs Populations and Households........................................................................... 30 Displacement Risk for Special Needs Households ................................................................. 31 Commute Trends ....................................................................................................................... 33 Service Provider Survey Responses ......................................................................................... 34 Quotes from local Social Service Providers ............................................................................. 35 SUMMARY OF FINDINGS ................................ ................................ ................................ ......... 36

List of Tables
Table 1: Housing Units by Type, 2010-2020 .................................................................................. 6 Table 2: Affordability of Market Rate Single-Family Homes, Fremont, 2020 ............................. 13 Table 3: Affordability of Market Rate Condominiums/Townhomes, Fremont, 2020 ................. 14 Table 4: Housing Unit Overcrowding, 2015-2019 ........................................................................ 18 Table 5: Households by HUD Area Median Family Income (HAMFI) Level, 2010-2017 ............ 22 Table 6: Renter Households by HUD Area Median Family Income (HAMFI) Level, 2010-2017 23 Table 7: Type of Housing by Tenure, 2015-2019 ......................................................................... 25 Table 8: Change in Fremont Workers by Place of Residence, 2010-2018 ................................ 33

List of Figures
Figure 1: Fremont and Alameda County Demographic Snapshot ................................................. 3 Figure 2: 2020 Income Limits, Alameda County ............................................................................ 4 Figure 3: Household Income Level by Race and Ethnicity, Fremont, 2013-2017 ....................... 5 Figure 4: Average Multifamily Asking Rents, Q1 2010-Q1 2021 .................................................. 8 Figure 5: Affordability of Market-Rate Rental Housing in Fremont, 2020 .................................... 9 Figure 6: Multifamily Rental Vacancy Rate, Q1 2010-Q3 2020 .................................................. 10 Figure 7: Ratio of Median Home Sale Prices to Area Median Income for a Four-Person Household, 2012-2020.................................................................................................................. 11 Figure 8: Growth in Cost-Burdened Lower Income Renter Households, 2010-2017 ................ 15 Figure 9: Cost-Burdened Fremont Lower Income Renter Households, 2013-2017 .................. 16 Figure 10: Cost-Burdened Alameda Co. Lower Income Renter Households, 2013-17 ............. 16 Figure 11: Housing Cost Burden by Race and Ethnicity, Renter Households in Fremont, 2013- 2017 ................................................................................................................................................ 17 Figure 12: Housing Authority of the County of Alameda (HACA) Housing Choice Vouchers, March 2010-March 2020 .............................................................................................................. 19 Figure 13: Residential Vacancy Rate, 2010-2020 ....................................................................... 20 Figure 14: Change in Lower-Income Renter Households by Race and Ethnicity, 2010-2017 .. 24 Figure 15: Fremont 2015-2023 RHNA Progress .......................................................................... 26 Figure 16: Change in Housing Units, Fremont, 2010-2020 ........................................................ 27 Figure 17: New Housing Unit Growth by Type, 2010-2020 ......................................................... 27 Figure 18: Socioeconomically Disadvantaged Students by Ethnicity, Fremont Unified School District, 2019-20 ............................................................................................................................ 28 Figure 19: Fremont Unified School District Enrollment, 2014-15 to 2020-21 .......................... 29 Figure 20: Special Needs Populations and Households, Fremont .............................................. 30 Figure 21: Income Distribution by Household Type, Fremont, 2013-2017 ................................ 31 Figure 22: Housing Cost Burden Among Lower-Income Renters (up to 80% of AMI) Households in Fremont ....................................................................................................................................... 32 Figure 23: Service Provider Survey Responses ............................................................................ 34

EXECUTIVE SUMMARY
This study finds that lower -income Fremont residents have been experiencing residential displacement and are at risk of additional displacement pressure, to a greater extent than lower- income residents in Alameda County overall. The report demonstrates that re sidential displacement has occurred and is at high risk of continuing to occur without additional affordable units being prioritized for lower-income Fremont workers and residents.

KEY FINDINGS

Affordable rents for households with incomes equal to 60 percent of the area median income, the highest income level served by units funded through Measure A1 funds, are at least $400 per month lower than the average market-rate rent. For many lower -income households, the gap between the affordable rent and typical market-rate rents is significantly higher.

Lower Income
Fremont
Renters
Lower-Income
Alameda County
Renters

Housing Condition
85% 77% High housing cost burden
21% 13% Living in over-crowded conditions
High housing cost burden and overcrowding are indicators that households are struggling to afford housing and could be at risk of displacement.

The overwhelming majority of Fremont residents that would be eligible for units funded through Alameda County Measure A1 affordable housing funds are likely at risk of displacement due to high housing costs.

Market-rate rents in Fremont have increased substantially in recent years and are considerably higher than lower-income households can afford, increasing displacement risk for lower- income households.

Fremont, 57% Countywide, 44%
0%
20%
40%
60%

MARKET RATE MULTI -FAMILY RENT INCREASE
2010 TO 2020

Percent of
Households with
Extremely Low,
Very Low,
or Low Incomes:

24% for all Fremont
households
46% for Households with
One or More Persons with
a Disability
54% for Elderly Fremont
Households
Percent of
Lower-Income
Renter Households
with a High Housing
Cost Burden:

85% for all Fremont
households
93% for Large Family
Households
Percent
of Households
with Incomes
Below Poverty Level

3% for all Fremont family
households
10% for Fremont family
households with a single
female householder

These households are more likely than other households in Fremont to have low incomes.

Additionally, lower-income renter households in Fremont with special needs are more likely than other low-income renters in Fremont to have a high housing cost burden.

In 2010, 22% of Fremont’s workforce lived in Fremont.

By 2018, the proportion had decreased to 17%.

People that work in Fremont are increasingly commuting from more affordable locations in Alameda County and elsewhere.

Lower-income households and individuals in Fremont with special housing needs, including seniors, people with
disabilities, single parent households, and large families, are disproportionately at risk for displacement.

Data on commute flows suggest that an increasing share of the City’s workforce is commuting to Fremont from other cities, a sign that people working in Fremont are having an increasingly difficult time affording housing in Fremont.

iii

Fremont Net decrease of 450 lower-income households,
including both homeowners and renters, including
decrease of 205 lower- income renter households.

Alameda Lower-income households increased by 7,100,
County including a net increase of 5,790 lower-income renter households.

Decreases in lower-income renter households had an outsized impact on White, Black and African-American, and Hispanic and Latino households.

Disproportionately Impacted by Displacement in Fremont:

Lower-income households People with disabilities
Racial and ethnic minority groups Seniors Single-parent households Families with children Large family households

70% of the social service providers in Fremont that responded to a survey related to this study indicated that their clients have moved out of Fremont, are at risk of displacement, or are planning to move out of Fremont due to economic hardship or other reasons beyond their control.

Data suggest that many lower-income households in Fremont have likely already been displaced due to high housing costs.

Local social service providers indicate that Fremont’s most vulnerable households face considerable displacement risk and that some households have already been displaced.

Between 2017–2018 and 2020-2021 School Years:

The Fremont Unified School District (FUSD) has seen large enrollment declines at elementary schools, suggesting that younger families are being disproportionately affected. According to a recent analysis of enrollment trends at the FUSD, the enrollment declines are likely associated with housing affordability and increased housing costs. This has coincided with a gradual decrease in students receiving free or reduced-price meals, English learners, and Foster Youth, both in numerical terms and as a percent of total enrollment.

Since the 2017-18 school year, the Fremont Unified School District has experienced unexpected declines in student enrollment, indicating that families with children have been moving out of the City.

Continued increase in the City's overall population
Enrollment decreased by 2.2%

CONCLUSION
Renters in Fremont are at a greater risk of displacement than renters in Alameda County overall.

Data on commute flows, the decrease in the number of lower income households, survey results from local social service providers, and FUSD enrollment trends suggest that Fremont residents have likely already been displaced.

Lower-income Fremont renters have higher rates of high hou sing cost burden than the countywide average. Renter households in Fremont are also more likely to live in overcrowded units than are renter households in Alameda County overall . Fremont has also experienced more significant increases in market-rate rents than Alameda County overall and tends to have a lower rental vacancy rate. Fremont has experienced a decrease in lower-income households during recent years, while the number of lower -income households in Alameda C ounty has increased.

The analysis concludes that Fremont needs policies and programs that specifically support housing affordability and stability for lower income households, especially those households with incomes at or below 60% Area Median Income. For many lower-income Fremont residents, deed-restricted affordable rental housing, which is severely limited in supply, is the only housing option that could potentially provide affordability, stability, and protection from displacement.

Executive Summary graphics prepared by the City of Fremont 85%
21%
57%
+7,10074%
13%
44% -450
% OF LOWER-INCOME RENTER

HOUSEHOLDS WITH HIGH

HOUSING COST BURDEN
% OF RENTER

HOUSEHOLDS LIVING IN

OVERCROWDED UNITS

INCREASES IN MARKET-RATE
RENTS MARCH 2010 –MARCH
2021

CHANGE IN LOWER-INCOME
HOUSEHOLDS, 2010-2017
Displacement Study Highlights
Fremont Alameda County

1 INTRODUCTION
Displacement can have a range of negative effects at the individual, household, community, and regional levels. Often, individuals and households that are displaced must move further from their places of work, established childcare arrangements, and social support networks, while children in displaced households may experience a disruption in schooling. Widespread displacement often exacerbates inequalities in access to opportunity and patterns of segregation as lower-income households are increasingly excluded from higher -cost areas. In cities where residents have been displaced, these trends can have a negative impact on the economic, racial, ethnic, and social diversity of the local population. In addition, local employers in high-cost areas often have difficulty recruiting and retaining workers for lower-paying jobs that are necessary to support local economic activity. These trends can also lead to wo rkers commuting long distances to jobs in higher -cost communities, creating negative impacts in terms of both equity and the environment.

As a part of the City’s efforts to address displacement, the City of Fremont has instituted a local live/work policy for affordable housing developments in Fremont , which prioritizes affordable housing placements for individuals or households that live or work in Fremont. There are four affordable projects in the City of Fremont development pipeline that received funding through Alameda County Measure A1 funds . For cities to retain local preference on the Measure A1 funded affordable housing projects, Alameda County requires that cities that offer a local live/work preference prepare a displacement study to evaluate displacement trends within the jurisdiction. To respond to this requirement and in recognition of the negative impacts of displacement, the City of Fremont commissioned this study to evaluate the extent to which households in Fremont have experienced or are at risk of displacement, in order to inform City and County policies to mitigate displacement effects in Fremont.

This report provides data and analysis on various indicators that Fremont residents have been displaced or are currently at high risk of displacement. The analysis focuses on displacement impacts and displacement risk among lower -income households, consistent with the income levels served by units funded through Measure A1 funds.

The remainder of this report is divided into three chapters. The following chapter provides a brief overview of demographic and housing conditions in Fremont to provide baseline information for the displacement analysis. The next chapter provides data related to various indicators that Fremont residents have been displaced and indicators that existing Fremont residents are currently at risk of displacement. In particular, this analysis focuses on displacement impacts and displacement risk among lower-income households, consistent with the income levels served by u nits funded through Measure A1 funds. The final chapter summarizes the findings from the analysis.

2 FREMONT DEMOGRAPHIC AND HOUSING

TRENDS OVERVIEW
This chapter provides an overview of high-level demographic and housing conditions in Fremont and Alameda County to provide background for the displacement analysis provided in this report. The data in this section generally do not directly address whether Fremont residents have been experiencing displacement or are at risk of displacement but are instead included to provide insight to inform the displacement analysis provided in the following chapter of this report.

DEMOGRAPHIC SNAPSHOT
Fremont is demographically distinct from Alameda County a whole, with larger household sizes, higher overall household incomes, and a different distribution of the population among various racial and ethnic groups. As of 2020, Fremont had a population of approximately 231,600 residents and a total of 76,100 households, accounting for approximately 14 percent of the population in Alameda County and 13 percent of Alameda County’s households, according to data from Esri. The average household size was 3.02, much higher than the average countywide (2.73). A much higher share of households in Fremont are families (78 percent) than in the County overall (65 percent). The median age among Fremont residents was 38.5 in 2020, slightly higher than the median in Alameda County (37.9). Fremont has a large population of individuals of Asian descent, which comprise approximately 58 percent of residents in Fremont, compared to 32 percent of residents countywide. Non -Hispanic White residents represent the second largest racial or ethnic group in Fremont, comprising 21 percent of the City’s residents in 2020. Compared to t he countywide population, Fremont has a much lower proportion of Hispanic/Latino residents (14 percent) and Black/African American residents (2 percent).

Fremont has a large concentration of above moderate-income households, which comprise 59 percent of all households in Fremont compared to 44 percent of households countywide, with a correspondingly small concentration of lower -income households (24 percent ). Fremont and Alameda County have similar concentrations of moderate -income households (17 percent).

Units funded through Measure A1 funds would serve households with extremely low, very low, and low incomes, and therefore would not be available to households in Fremont with moderate or above-moderate incomes.

3 Figure 1: Fremont and Alameda County Demographic Snapshot

Sources: U.S. Department of Housing and Urban Development, 2013-2017 Comprehensive Housing Affordability Strategy (CHAS) data; Esri Business Analyst, 2020; BAE, 2021.

3.02 2.73

2.50 2.60 2.70 2.80 2.90 3.00 3.10
Fremont
Alameda County
Average Household Size

13.5%

22.4%

2.2%

9.8%

21.0%

30.2%

58.0%

31.8%

5.2%

5.8%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Fremont
Alameda County
Race and Ethnicity
Hispanic/Latino Black/African American White Asian All Other

21.5%

23.8%

24.3%

20.9%

27.1%

29.1%

12.5%

12.8%

14.6%

13.5%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Alameda County
Fremont
Age Distribution
Under 18 18-34 35-54 55-64 65 or older

8.2%

15.5%

7.2%

11.2%

8.6%

11.6%

17.2%

58.9%

44.4%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Fremont
Alameda County
Household Income Distribution
Extremely Low Income Very Low Income Low Income Moderate Income Above Moderate Income 4 ALAMEDA COUNTY INCOM E LIMITS
For the purpose of designing affordable housing programs and analyzing housing issues, households are often categorized as extremely low -income, very low-income, low-income, or moderate-income based on household size and how household income compares to the Area Median Income (AMI) for other households of the same size. Income limits for each household size and income group are established annually by State and Federal agencies.

In 2020, the median household income in Alameda County was $119,200 for a four -person household, $107,300 for a three-person household, $95,350 for a two-person household, and $83,450 for a one-person household. Lower income households are generally defined as those earning 80 percent of AMI or less. Figure 2 shows the maximum household income for extremely low-, very low-, low-, and moderate-income households of various sizes in Alameda County as of 2020, according to the income limits set by the California Department of Housing and Community Development.

Figure 2: 2020 Income Limits, Alameda County

Sources: California Department of Housing and Community Development (HCD); City of Fremont Housing Division; BAE, 2021.

5 INCOME LEVEL BY RACE AND ETHNICITY
Income levels for Fremont households vary by race and ethnicity. Figure 3 below shows the estimated household income distribution for households in Fremont by race and ethnicity, according to American Community Survey (ACS) data collected between 2013 and 2017 (the most recent available for this dataset), as provided in Comprehensive Housing Affordability Strategy (CHAS) data. Among Asian households, the household income distribution includes a larger share of households with moderate inc omes and above -moderate incomes than households in Fremont overall, with a correspondingly smaller share of lower -income households. Among all other racial and ethnic groups, the share of moderate-income and above moderate-income households is smaller than the share in Fremont overall, with a larger share of lower-income households. It should be noted that the CHAS data indicate that there are only a small number of American Indian/Alaska Native households and Pacific Islander households in Fremont, makin g the estimates for these households somewhat unreliable and subject to sampling error.

Figure 3: Household Income Level by Race and Ethnicity, Fremont, 2013-2017

Sources: U.S. Department of Housing and Urban Development, 2013-2017 Comprehensive Housing Affordability Strategy (CHAS) data; BAE, 2021.

6 HOUSING STOCK
Fremont’s existing housing stock is heavily dominated by single family units (both attached and detached), which make up 71 percent of the total cit ywide inventory. Fremont has approximately 77,300 housing units, comprising 13 percent of the countywide inventory as of 2020 (see Table 1). A significant share of the net increase in housing units in Fremont between 2010 and 2020 was due to a net increase in multifamily units, similar to Alameda County overall. However, compared to the County a larger share of the net increase in new housing units in Fremont during this period is due to an increase in single-family detached homes.

Table 1: Housing Units by Type, 2010-2020

Like Alameda County overall, Fremont is a majority-owner city. Renter households comprise 37 percent of households in Fremont, compared to 46 percent of households countywide. The average renter household size in Fremont is notably high, at 3.03 persons per household, compared to the County (2.67 persons per household).

Number Percent Number Percent Number Percent
Fremont
Single Family Detached 43,301 58.5% 44,700 57.8% 1,399 3.2% Single Family Attached 9,933 13.4% 10,192 13.2% 259 2.6% Multifamily 2 to 4 Units 2,429 3.3% 2,584 3.3% 155 6.4% Multifamily 5 or More Units 17,600 23.8% 19,107 24.7% 1,507 8.6% Mobile Home/Other 726 1.0% 726 0.9% - 0.0% Total Housing Units 73,989 100.0% 77,309 100.0% 3,320 4.5% Number Percent Number Percent Number Percent
Alameda County
Single Family Detached 309,306 53.2% 319,353 52.2% 10,047 3.2% Single Family Attached 44,280 7.6% 48,130 7.9% 3,850 8.7% Multifamily 2 to 4 Units 65,326 11.2% 66,731 10.9% 1,405 2.2% Multifamily 5 or More Units 154,629 26.6% 169,679 27.7% 15,050 9.7% Mobile Home/Other 7,831 1.3% 7,859 1.3% 28 0.4% Total Housing Units 581,372 100.0% 611,752 100.0% 30,380 5.2% Sources: State of California, Department of Finance, Table E-5, 2020; BAE, 2020. 2010 2020
2010 2020 2010-2020 Change
2010-2020 Change
7 DISPLACEMENT ANALYSI S
This chapter assesses the extent to which displacement has affected Fremont households and whether Fremont households are currently at risk of displacement based on an analysis of various data sources. In the context of neighborhood change, the term “displacement” typically refers to existing residents’ involuntary movement out of the community, usually due to increases in housing costs and strong demand for housing coupled with a shortage of options for lower-income households.

While there is a shortage of data that can provide direct information on whether displacement has occurred or whether households are at risk of displacement, there are various data sources that provide information that, taken together, provide an indication of the extent to which households are impacted by displacement. Data that could indicate that households have been displaced or are at risk of displacement include:
• Significant increases in residential rents and sale prices; • Rents and sale prices that exceed the affordability threshold for lower -income households;
• Low residential vacancy rates;
• Decreases in the number of lower-income households in Fremont over time; • The presence of lower -income households for which housing costs are equal to an inordinate share of households income;
• Overcrowding in residential units; and
• A shortage of units affordable to lower-income households; • Changes in commute patterns that demonstrate an increase in workers commuting from longer distances.

The following pages present data and analysis on these indicators to assess the extent to which Fremont households are impacted by displacement. The analysis focuses on lower -income renter households, as these are the households that would be eligible for units funded through Measure A1 funds , but also provides information on other types of households . In general, renters tend to be more susceptible to displacement than homeowners because renters are generally not protected from rent increases except as stipulated in their lease agreement, which may provide no protection from increases or only relatively short -term protection. In markets with increasing residential rents and a limited supply of affordable rental housing, lower-income renters are often vulnerable to displacement as property owners increase rents to match market rates. In contrast, homeowners’ housing cost s are not impacted by changes in the housing market after the homeowner purchases the unit, which generally gives homeowners a choice as to whether they sell their homes and move elsewhere . However, homeowners can be susceptible to displacement if their economic circumstances change or if home repairs become unaffordable, making them unable to stay in their homes. If there are limited affordable options locally, these residents could be displaced to other communities. 8 MULTIFAMILY RENT TRE NDS
Multifamily rental rates in Fremont have increased considerably in recent years, indicating that lower-income renters may be at risk of displacement due to rent increases. Between the first quarter of 2010 and the first quarter of 2020, the average monthly asking rent increased by $888 per unit in Fremont , or 5 7 percent, among market -rate multifamily apartment developments with five or more units. Over the same period, the countywide average monthly asking rent among these developments increased $720 per unit, or 44 percent, meaning that Fremont has been more heavily impacted by market-rate rent increases than the County overall.

As of March 1, 2021 , average asking rents were $2, 303 per unit in Fremont and $2, 235 in Alameda County overall , slightly down fro m the first quarter of 2020 . The slight decrease in average rents in Fremont and Alameda County since the beginning of 2020 are likely due in part to the impact of the COVID-19 pandemic. In Fremont, the decrease in rent is likely also due to the delivery of a large number of multifamily units in Fremont in 2020, which added a significant inventory of available units to the City’s housing supply. Rents in both Fremont and Alameda County appear to have stabilized in recent months, which is potentially an indication that further rent decreases are unlikely and that rent increases could resume over the next several months.

Figure 4: Average Multifamily Asking Rents, Q1 2010-Q1 2021

Note: Data reflect units in market rate multifamily complexes with 5 or more units. Quarter to date (QTD) 2021 reflects data as of March 1, 2021.

Sources: CoStar; BAE, 2021.

Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
$1,558
$2,446
$2,303
$1,618
$2,338
$2,235
$1,500
$1,600
$1,700
$1,800
$1,900
$2,000
$2,100
$2,200
$2,300
$2,400
$2,500
Avg. Asking Rent per Unit
City of Fremont Alameda County
9 AFFORDABILITY OF MUL TIFAMILY RENTAL MARK ET
Lower-income renters in Fremont are unlikely to be able to afford market -rate rents and may face displacement risk due to recent or future rent increases. Current market-rate rents in Fremont greatly exceed the affordability thresholds for lower income households in Alameda County. For households earning 60 percent of the area median income or less, average market rate rents exceed affordability thresholds by $400 per month or more. Larger lower income rental households face severe affordability challenges. For example, a housing unit that would be affordable to a family of four earning 60 percent of AMI would cost nearly $1,300 less than the current average market rent for a three-bedroom unit. Similarly, the affordable monthly rent for a family of three earning 60 percent of A MI is $800 less than the current average market rent for a two-bedroom unit.

Figure 5: Affordability of Market-Rate Rental Housing in Fremont, 2020

Notes:
(a) Market rents reflect average asking rates of units in multifamily properties with 5+ units in Fremont as of Q3 2020. (b) Maximum affordable housing costs are defined as 30% of gross monthly household income, the maximum amount that a household can spend on housing expenses without being considered cost burdened. Affordable rents account for the cost of utilities, based on Housing Authority of the County of Alameda 2020 allowances for tenant-furnished utilities and other services for a multifamily unit that uses gas cooking, heating, and water heating, as well as electricity for lights and appliances. The allowance is based on the number of bedrooms in the unit and a household is assumed to have one bedroom fewer than the number of people in the household.

Sources: California HCD, 2020; CoStar, 2021; Housing Authority of the County of Alameda, 2020; BAE, 2021. 1 Person 2 Person 3 Person 4 Person
(Studio) (1 BD) (2 BD) (3 BD)
Market Rent $1,752 $2,011 $2,487 $3,138
Utilities $58 $75 $94 $117
Max. Affordable Rent Less Market Rent
30% AMI (Extremely Low Income) ($1,124) ($1,302) ($1,700) ($2,276) 50% AMI (Very Low Income) ($668) ($781) ($1,112) ($1,624) 60% AMI (Low Income) ($439) ($520) ($819) ($1,298)
80% AMI (Low Income) $18 $3 ($231) ($645)
Household (Unit) Size
$862
$1,514
$1,841
$787
$1,375
$1,669
$2,011
$2,487
$3,138
$709
$1,230
$1,491
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500
Rent Affordable
at 30% AMI
Rent Affordable
at 50% AMI
Rent Affordable
at 60% AMI
One-Bedroom
Market-Rate Rent
Two-Bedroom
Market-Rate Rent
Three-Bedroom
Market-Rate Rent
2 person household 3 person household 4 person household 10 MULTIFAMILY RENTAL V ACANCY RATE
Despite recent upticks in vacancies in 2020, the multifamily vacancy rate in both Fremont and Alameda County has been extremely low since 2010, contributing to upward pressure on rents and leaving limited options for displaced households to stay in their communities. Between 2010 and 2019, the multifamily vacancy rate averaged just 3.6 percent in Fremont and 4.0 percent in the County . Multifamily vacancy rates in 2020 and the beginning of 2021 were uncharacteristically high in both Fremont and Alameda County . Data provided by CoStar indicate recent large increases in the numb er of vaca nt apartment units in Alameda County, likely due to the economic dislocation resulting from the COVID-19 pandemic. The upward trend in the vacancy rate in Fremont was more pronounced due to a large number of new units that were delivered during the first and third quarters of 2020 but has since decreased and is now lower than the countywide vacancy rate . Meanwhile, vacancy rates have also decreased in Alameda County overall, though to a lesser extent. These data indicate that the high vacancy rates in Alameda County, and particularly in Fremont, are likely temporary and not indicative of a long-term oversupply of rental housing.

Figure 6: Multifamily Rental Vacancy Rate, Q1 2010-Q3 2020

Note: Data reflect units in market rate multifamily complexes with 5 or more units. Quarter to date (QTD) 2021 reflects data as of March 1, 2021.

Sources: CoStar; BAE, 2021.

11 HOME SALE PRICE TREN DS
Growth in home sale prices in Fremont and Alameda County have considerably outpaced growth in household incomes since the Great Recession, making homeownership increasingly unobtainable for many lower-income households, with home sale prices in Fremont consistently higher than sale prices in Alameda County overall. In 2012, the median single family home price in Fremont was $578,250, roughly 6.2 times the area median household income for a four - person household. Due to rapid increases in home prices, price-to-income ratios have increased significantly since 2012, peaking in 2018 at a high of 11.7 for single family homes and 7.2 for condominiums and townhomes in Fremont . As of 2020, the median sale price for condominiums and townhomes in Fremont ($800,000) was 6.7 times the area median income for a four-person household, a significant increase from 3.0 in 2012. In Alameda County, the median sale price of single-family homes sold in 2020 ($1.0 million) was 8.5 times greater than the area median income, while the median sale price of condominiums and townhomes ($665,000) was 5.6 times the median income. As a result, many lower-income households in Fremont face increasing difficulties in buying a home in Alameda County, particularly in Fremont.

Figure 7: Ratio of Median Home Sale Prices to Area Median Income for a Four- Person Household, 2012-2020

City of Fremont 2012 2013 2014 2015 2016 2017 2018 2019 2020 Condos/Townhomes $280,000 $395,500 $470,000 $520,000 $567,000 $647,500 $750,000 $681,000 $800,000 Single Family $578,250 $711,000 $800,000 $893,000 $945,000 $1,047,000 $1,225,000 $1,139,500 $1,250,000 Alameda County 2012 2013 2014 2015 2016 2017 2018 2019 2020 Condos/Townhomes $240,000 $375,000 $431,000 $480,000 $535,000 $580,000 $650,000 $625,000 $665,000 Single Family $430,000 $598,000 $665,000 $730,000 $780,000 $850,065 $929,000 $912,000 $1,012,000 Note: Median household income reflects the Alameda County areawide median income for a 4 person household.

Sources: 2020 rereport.com; California Department of Housing and Community Development; BAE, 2020.

Median Sale Price

3.0 4.2

5.0 5.6 6.1 6.6 7.2

6.1 6.76.2

7.6 8.6

9.6 10.1

10.7 11.7

10.2 10.5

4.6 8.9

8.5 5.6

0.0 2.0

4.0 6.0

8.0 10.0

12.0 14.0
2012 2013 2014 2015 2016 2017 2018 2019 2020
Median Sale Price to
Household Income Ratio
Ratio of Median Home Sale Price to Area Median Income
Condos/Townhomes (Fremont) Single Family (Fremont)
Condos/Townhomes (Alameda Co.) Single Family (Alameda Co.) 12 AFFORDABILITY OF FOR -SALE HOUSING MARKET
The vast majority of lower and moderate-income households are not able to afford to purchase a home in Fremont and therefore are unable to benefit from the relative stability and protection from displacement that homeownership provides . Rising incomes combined with a limited supply have resulted in extremely high home sale prices in Fremont. In 2020, the median home sale price was $1.25 million for single family homes and $800,000 for condominiums and townhomes. An annual household income of $218,000 or more would be needed to afford a home with a sale price of $1.25 million, making Fremont’s median home sale price substantially higher than the price that most households in Fremont or elsewhere in Alameda County can afford. Sale prices for condominiums and townhomes, which have historically provided more affordable ownership options in the City, have also become unaffordable for most moderate - income households. Compared to renters, homeowners are more protected from displacement pressures because homeowners’ housing costs are not impacted by changes in the housing market after the homeowner purchases the unit. Due to the unaffordability of for-sale housing in Fremont, most low- and moderate-income Fremont renters are unlikely to be able to buy their first home in Fremont and therefore must continue renting, foregoing the relative stability that homeownership can provide, or leave the community to purchase a home. The City has helped address these challenges through its First Time Homebuyer program, which offers income eligible first time homebuyers with opportunities to purchase homes at below market prices (BMP). There are currently 299 BMP units in the City’s inventory.

13 Table 2: Affordability of Market Rate Single-Family Homes, Fremont, 2020

Amount
Above (Below)
Maximum 2020 Median
Income Affordable SF Sale Price
Income Level Limit (a) Sale Price (b) ($1,250,000)
Three Person Household
Extremely Low Income (up to 30% AMI) $35,250 $150,841 ($1,099,159) Very Low Income (31-50% AMI) $58,750 $251,347 ($998,653) Low Income (51-80% AMI) $94,000 $402,023 ($847,977)
Moderate Income (81-120% AMI) $128,750 $550,712 ($699,288) Four Person Household
Extremely Low Income (up to 30% AMI) $39,150 $167,399 ($1,082,601) Very Low Income (31-50% AMI) $65,250 $279,164 ($970,836) Low Income (51-80% AMI) $104,400 $446,563 ($803,437)
Moderate Income (81-120% AMI) $143,050 $611,810 ($638,190) Notes:
(a) 2020 household income limits for a three or four person household in Alameda County. (b) Based on an FHA mortgage with the following terms:

Percent of income for housing costs: 31%
Down payment as % of sale price: 3.5%
Annual interest rate: 3.13%
Loan term (years): 30
Upfront mortgage insurance: 1.75% of loan amount
Annual mortgage insurance: 0.85% of loan amount
Annual homeowners insurance: 0.30% of coverage amount
Annual property tax rate: 1.16% of home value
Sources: CA HCD, 2020; Federal Housing Administration, 2020; Freddie Mac, 2020; CA Dept. of Insurance; Alameda County Controller's Office, 2019-2020; rereport.com; BAE, 2020. 14 Table 3: Affordability of Market Rate Condominiums/Townhomes, Fremont, 2020

Amount Above
(Below) 2020
Maximum Median Condo/
Income Affordable Townhome Sale
Income Level Limit (a) Sale Price (b) Price ($800,000)
Three Person Household
Extremely Low Income (up to 30% AMI) $35,250 $79,167 ($720,833) Very Low Income (31-50% AMI) $58,750 $184,058 ($615,942) Low Income (51-80% AMI) $94,000 $341,307 ($458,693)
Moderate Income (81-120% AMI) $128,750 $496,482 ($303,518) Four Person Household
Extremely Low Income (up to 30% AMI) $39,150 $96,447 ($703,553) Very Low Income (31-50% AMI) $65,250 $213,088 ($586,912) Low Income (51-80% AMI) $104,400 $387,790 ($412,210)
Moderate Income (81-120% AMI) $143,050 $560,246 ($239,754) Notes:
(a) 2020 household income limits for a three or four person household in Alameda County. (b) Based on an FHA mortgage with the following terms:

Percent of income for housing costs: 31%
Down payment as % of sale price: 3.5%
Annual interest rate: 3.13%
Loan term (years): 30
Upfront mortgage insurance: 1.75%
Annual mortgage insurance: 0.85%
Annual homeowners insurance: $475
Annual property tax rate: 1.16%
Sources: CA HCD, 2020; Federal Housing Administration, 2020; Freddie Mac, 2020; CA Dept. of Insurance; Alameda County Controller's Office, 2019-2020; rereport.com; Redfin; BAE, 2020. 15 HOUSING COST BURDEN

There has been a notable increase in the number of extremely low-income renter households that are cost burdened (paying more than 30 percent of income on housing) in Fremont since 2010. Between 2010 and 2017, the number of cost-burdened extremely low-income renter households (those with incomes below 30 percent of the HAMFI) grew by 795 households, or 40 percent. Meanwhile the number of very low-income and low-income households that were housing cost burdened was relatively stable during this period.

Figure 8: Growth in Cost-Burdened Lower Income Renter Households, 2010-2017

Sources: U.S. Department of Housing and Urban Development, 2006-2010 & 2013-2017 Comprehensive Housing Affordability Strategy (CHAS) data; BAE, 2020.

Housing Cost Burden & Displacement Risk
Households are generally considered to have a high housing cost burden if they spend more than 30 percent of household income on housing costs. For lower-income households in particular, spending more than 30 percent of income on housing costs often means that households are struggling to afford housing and are unlikely to be able to afford any future rent increases. Lower-income households with high housing cost burden are often at risk of displacement in housing markets in which prices are increasing because they are vulnerable to rent increases that would force them to move or lead to nonpayment of rent and eventual eviction.
16 Housing cost burden among lower income renter households in Fremont is nearly universal and demonstrates that existing lower income renter households are vulnerable to the impact of future rent increases. In 2017, 85 percent of the lower income renter households (those with incomes below 80 percent of the HAMFI) in Fremont were housing cost burdened, spending more than 30 percent of their gross incomes on rent. Of the 7,900 lower income renter households that were cost burdened in 2017, 4,080 (approximately 45 percent of all lower - income renter households) were severely cost-burdened, or spent more 50 percent of their gross household incomes on rent. Lower-income renters in Fremont were more likely to have a high housing cost burden than renters in Alameda County overall. Countywide, 74 percent of lower income renter households were housing cost burdened as of 2017, with 42 percent spending more than 50 percent of their gross incomes on rent.

Figure 9: Cost-Burdened Fremont Lower Income Renter Households, 2013-2017

Sources: U.S. Department of Housing and Urban Development, 2013-2017 Comprehensive Housing Affordability Strategy (CHAS) data; BAE, 2020.

Figure 10: Cost-Burdened Alameda Co. Lower Income Renter Households, 2013-17

Sources: U.S. Department of Housing and Urban Development, 2013-2017 Comprehensive Housing Affordability Strategy (CHAS) data; BAE, 2020.

17 COST BURDEN BY RACE AND ETHNICITY
While housing cost burden for Fremont renters varies by race and ethnicity, the variation is likely attributable to differences in the income distribution between various groups and does not necessarily indicate differences in by race and ethnicity among lower-income renter households.

Figure 11 shows the level of housing cost burden among renter households in Fremont by race and ethnicity. The data shown is for renter households at all income levels and therefore this figure shows a smaller proportion of househo lds with high housing cost burden than shown in Figure 9 above. As shown, an estimated 37 percent of all renter households in Fremont pay more than 30 percent of their income on housing. Among Asian and Pacific Islander households, the share of renter households with a 30 -percent or higher housing cost burden is somewhat lower than the citywide average. Among all other households, the share of renter ho useholds with a 30-percent or higher housing cost burden is somewhat higher than the citywide average.

It should be noted that the CHAS data used for this analysis indicate that there are very few American Indian/Alaska Native households and Pacific Islander households in Fremont, making the estimates for these households somewhat unreliable and subject to sampling error. Despite these differences by race and ethnicity , it is likely that the prevalence of high housing cost burdens for lower-income renter households is relatively similar across racial and ethnic groups.

Figure 9 demonstrates that almost all lower -income renters in Fremont have a housing cost burden higher than 30 percent, leaving little room for variation between groups. In addition, the variation in the distribution shown below loosely corresponds to the distribution of household incomes by race and ethnicity shown in Figure 3, suggesting that most lower-income renter households in Fremont experience a high housing cost burden and associated displacement risk, regardless of race or ethnicity.

Figure 11: Housing Cost Burden by Race and Ethnicity, Renter Households in Fremont, 2013-2017

Sources: U.S. Department of Housing and Urban Development, 2013-2017 Comprehensive Housing Affordability Strategy (CHAS) data; BAE, 2021.

18 OVERCROWDING
Renter-occupied households in Fremont experience extremely high levels of overcrowding, an indication that renter households in the City are struggling to find and afford housing. The U.S.

Census defines overcrowded housing units as those that are occupied by more than one person per room, and severely overcrowded units as those that are occupied by more than 1.5 persons per room. As shown in Table 4, approximately 21 percent of the renter -occupied units in Fremont were considered overcrowded between 2015 and 2019, compared to approximately 13 percent countywide. The City of Fremont also accounts for a disproportion ate share of the County’s overcrowded renter-occupied households. Just 29,775 (11 percent) of the County’s total renter-occupied units are in Fremont, yet the City accounts for approximately 18 percent of all overcrowded renter-occupied units in the County.

Table 4: Housing Unit Overcrowding, 2015-2019

City of Fremont Number Percent Number Percent Number Percent Not Overcrowded 23,487 78.9% 44,409 96.7% 67,896 89.7%
Overcrowded (a) 6,288 21.1% 1,503 3.3% 7,791 10.3%
Severely Overcrowded (b) 1,822 6.1% 307 0.7% 2,129 2.8% Total Units 29,775 100.0% 45,912 100.0% 75,687 100.0%
Alameda County
Not Overcrowded 233,699 87.1% 298,053 96.5% 531,752 92.1% Overcrowded (a) 34,587 12.9% 10,838 3.5% 45,425 7.9%
Severely Overcrowded (b) 13,737 5.1% 2,681 0.9% 16,418 2.8% Total Units 268,286 100.0% 308,891 100.0% 577,177 100.0% Fremont Share of County Total
Not Overcrowded 10.1% 14.9% 12.8%
Overcrowded (a) 18.2% 13.9% 17.2%
Severely Overcrowded (b) 13.3% 11.5% 13.0%
Total Units 11.1% 14.9% 13.1%
Notes:
(a) The U.S. Census defines an overcrowded unit as one occupied by more than 1 person per room. (b) The U.S. Census defines a severely overcrowded unit as one occupied by more than 1.5 persons per room.

Sources: U.S. Census Bureau, American Community Survey, 2015-2019 five-year sample data; BAE, 2020.

Renter-Occupied Owner-Occupied All Occupied Units
19 HOUSING CHOICE VOUCH ER USAGE
The number of households with housing choice vouchers living in Fremont has declined almost every year since 2010, likely due to rapid increases in market rents and a dwindling supply of affordable and suitable units . As of March 2020, there were approximately 1,100 voucher recipients living in Fremont, a 23 percent decline from the 1, 440 voucher recipients that lived in the City in March 2010. Fremont accounts for a disproportionate share of the total decline in the Housing Authority of the County of Alameda’s (HACA) jurisdiction since 2010. While Fremont accounts for approximately 25 percent of all housing units in HACA’s jurisdiction, the decrease of 339 voucher recipients living in Fremont accounts for 48 percent of the total decline in voucher recipients throughout HACA’s jurisdiction (see Figure 12).

High market rate rents combined with a limited supply of units make existing voucher holders in Fremont especially vulnerable to displacement from future rent increases. Voucher recipients, particularly those with disabilities, have a n extremely difficult time finding appropriate housing in markets such as Fremont where average market rents are significantly higher than the HUD FMR used to determine maximum Section 8 rents . The escalation in market rents above the HUD FMR has led some landlords to cease accepting vouchers, which has reduced the inventory of units available to voucher holders in recent years. As of February 1, there were only six listings with units available in Fremont on the gosection8 website.1 Two of the six units had asking rents higher than HACA’s maximum local rent payment standard.

Figure 12: Housing Authority of the County of Alameda (HACA) Housing Choice Vouchers, March 2010-March 2020

Note: HACA's jurisdiction excludes the cities of Alameda, Berkeley, Livermore, and Oakland.

Sources: Housing Authority of the County of Alameda (HACA); BAE, 2020.

1 Gosection8.com provides the largest and most accurate listing of certified voucher program rentals in markets throughout the U.S.
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Fremont 1,441 1,423 1,420 1,331 1,259 1,147 1,069 1,067 1,061 1,054 1,102 HACA Total 7,139 7,293 7,537 7,563 7,352 6,944 6,540 6,490 6,535 6,443 6,437 Total Housing Choice Vouchers
0 -18 -21
-110 -182 -294 -372 -374 -380 -387 -339
0 154
398 424
213
-195
-599 -649 -604
-696 -702
-800
-600
-400
-200
0 200
400
600
Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Change in Number of Section 8 Vouchers Since March 2010 Fremont Total (All HACA Jurisdictions)
20 OVERALL RESIDENTIAL VACANCY
Due to strong demand and low levels of new construction, the residential market in Fremont has been tight since 2010. As of 2020, Fremont’s residential vacancy rate was only 3.6 percent, down from 4.0 percent in 2010. Housing market conditions in the County were also tight in 2020, with an overall estimated vacancy rate of 5.3 percent, down from 6.4 percent in 2010.

Most economists consider a residential vacancy rate of around five percent to represent a healthy level of structural vacancy that allows for turnover without indicating an oversupply of housing. The persistently low residential vacancy rate in Fremont is reflective of a significant shortage of supply to meet demand for housing in the City , contributing to housing cost increases and leaving few available options, particularly for lower-income households.

Figure 13: Residential Vacancy Rate, 2010-2020

Sources: State of California, Department of Finance, Table E-5, 2020; BAE, 2020.

21 CHANGE IN LOW ER -INCOME HOUSEHOLDS
Since 2010, Fremont has lost a significant number of low -income households, suggesting that lower-income households have been displaced due to high housing costs. Fremont experienced a net decrease of 450 lower-income households (those with incomes below 80 percen t of the HAMFI) between 2010 to 2017. This is in contrast to the County, which actually saw the number of lower income households grow by 7,100 households, or 3.4 percent. This suggests that lower-income households in Fremont have been more significantly impacted by displacement pressure than households countywide. Notably, Fremont lost a total of 1,390 low -income households (those with incomes between 50 percent and 80 percent of HAMFI) and 115 very low-income households (those with incomes between 30 p ercent and 50 percent of HAMFI).

This was offset by a significant increase in extremely low -income households (those with incomes less than or equal to 30 percent of HAMFI). Between 2010 and 2017, the number of extremely low -income households in Fremont grew by 21.2 percent (1,055 households), eclipsing the rate of growth in the County (12.0 percent). However, as shown in Figure 8, these changes have coincided with a large increase in extremely low -income households with a high housing cost burden, suggesting that many of these extremely low -income households are struggling to afford their housing.

Because household characteristics change over time, the trends shown in Table 5 could be indicative of multiple simultaneous demographic changes occurring alongside displacement, rather than displacement alone . The increase in extremely low -income households and concurrent decrease in low -income households could indicate that some low -income households in Fremont became extremely low -income households during this period. These changes could also indicate that some extremely-low-income households have been successful in securing housing in affordable housing developments that were constructed during this period, though the increase in extremely low-income households with a high housing cost burden suggests that such households are few in number . While the available data do not provide enough information to fully understand the nuances of the demographic change that occurred during this period, the overall decrease in the size of the City's low-income population, coupled with other demographic changes identified in this report, suggests that at least some of the decrease in Fremont’s lower-income population has been due to displacement.

22 Table 5: Households by HUD Area Median Family Income (HAMFI) Level, 2010-2017

Household Income Level (a) 2010 2017 Number Percent
City of Fremont
Extremely Low Income (≤30% HAMFI) 4,965 6,020 1,055 21.2% Very Low Income (>30% to ≤ 50% HAMFI) 5,395 5,280 -115 -2.1% Low Income (>50% to ≤ 80% HAMFI) 7,705 6,315 -1,390 -18.0% Moderate Income (>80% to ≤ 120% HAMFI) 11,790 12,630 840 7.1% High Income (>120% HAMFI) 39,105 43,385 4,280 10.9%
Total Households (b) 68,960 73,630 4,670 6.8%
Less Than or Equal to 80% HAMFI (a) 18,065 17,615 -450 -2.5% Household Income Level (a) 2010 2017 Number Percent
Alameda County
Extremely Low Income (≤30% HAMFI) 78,920 88,375 9,455 12.0% Very Low Income (>30% to ≤ 50% HAMFI) 58,335 63,840 5,505 9.4% Low Income (>50% to ≤ 80% HAMFI) 73,975 66,115 -7,860 -10.6% Moderate Income (>80% to ≤ 120% HAMFI) 93,820 97,975 4,155 4.4% High Income (>120% HAMFI) 226,960 252,770 25,810 11.4%
Total Households (b) 532,010 569,075 37,065 7.0%
Less Than or Equal to 80% HAMFI (a) 211,230 218,330 7,100 3.4% Notes:
(a) CHAS data reflect HUD-defined household income limits. Income thresholds are defined as a percent of the HUD Area Median Family Income (HAMFI).
(b) Totals do not equal the sum of individual figures due to independent rounding.

Sources: U.S. Department of Housing and Urban Development, 2006-2010 & 2013-2017 Comprehensive Housing Affordability Strategy (CHAS) data; BAE, 2020. 2010-2017 Change
2010-2017 Change
23 CHANGE IN LOW ER -INCOME RENTER HOUSE HOLDS
The City accounted for an inordinate share of the net decrease in low-income renter households countywide between 2010 and 2017, suggesting that low-income renter households in Fremont have been disproportionately impacted by recent displacement pressures in Alameda County.

Between 2010 and 2017, Fremont and Alameda County both experienced rapid growth in high- income renter households, while losing a significant number of low -income renter households (those with incomes between 50 percent and 80 percent of the HAMFI). As shown in Table 6, Fremont experienced a net decrease of 770 low-income renter households between 2010 and 2017, equal to nearly twenty percent of the net decrease of 4,115 low -income households countywide.

Table 6: Renter Households by HUD Area Median Family Income (HAMFI) Level, 2010-2017

Household Income Level (a) 2010 2017 Number Percent
City of Fremont
Extremely Low Income (≤30% HAMFI) 2,765 3,250 485 17.5% Very Low Income (>30% to ≤ 50% HAMFI) 2,535 2,615 80 3.2% Low Income (>50% to ≤ 80% HAMFI) 3,915 3,145 -770 -19.7% Moderate Income (>80% to ≤ 120% HAMFI) 5,360 6,200 840 15.7% High Income (>120% HAMFI) 9,710 12,515 2,805 28.9%
Total Renter Households (b) 24,285 27,715 3,430 14.1%
Less Than or Equal to 80% HAMFI (a) 9,215 9,010 -205 -2.2% Household Income Level (a) 2010 2017 Number Percent
Alameda County
Extremely Low Income (≤30% HAMFI) 60,905 67,065 6,160 10.1% Very Low Income (>30% to ≤ 50% HAMFI) 36,640 40,385 3,745 10.2% Low Income (>50% to ≤ 80% HAMFI) 42,385 38,270 -4,115 -9.7% Moderate Income (>80% to ≤ 120% HAMFI) 43,730 49,170 5,440 12.4% High Income (>120% HAMFI) 55,080 72,525 17,445 31.7%
Total Renter Households (b) 238,750 267,405 28,655 12.0% Less Than or Equal to 80% HAMFI (a) 139,930 145,720 5,790 4.1% Notes:
(a) CHAS data reflect HUD-defined household income limits. Income thresholds are defined as a percent of the HUD Area Median Family Income (HAMFI).
(b) Totals do not equal the sum of individual figures due to independent rounding.

Sources: U.S. Department of Housing and Urban Development, 2006-2010 & 2013-2017 Comprehensive Housing Affordability Strategy (CHAS) data; BAE, 2020. 2010-2017 Change
2010-2017 Change
24 The recent net decrease in Fremont’s lower-income renter population has had disproportionate impacts on the City’s White, Black and African American, and Hispanic and Latino populations.

Between 2010 and 2017, the number of lower-income renter households in Fremont decreased by approximately two percent overall. This decrease had a disproportionate impact of lower - income White, Black and African American, and Hispanic and Latino renter households, which decreased by 15 percent, 12 percent, and 11 percent, respectively. Meanwhile, the number of lower-income renter households from other racial and ethnic groups increased.

Figure 14: Change in Lower-Income Renter Households by Race and Ethnicity, 2010-2017

Note: Data shown reflect the difference between ACS data collected during the 2006-2010 period and ACS data collected during the 2013-2017 period.

Sources: U.S. Department of Housing and Urban Development, 2006-2010 & 2013-2017 Comprehensive Housing Affordability Strategy (CHAS) data; BAE, 2020.

White
(505)
Black /
African-
American
(90)
American
Indian /
Alaskan Native
30 Asian
265
Pacific
Islander
20 Other
245
Hispanic /
Latino
(190)
All Lower
Income
Renter
Households
(225)
-600
-500
-400
-300
-200
-100
0 100
200
300
400
12%
Decrease
11%
Decrease
2%
Decrease
15%
Decrease
25 HOUSING UNIT TYPE BY TENURE
Of the 29,775 renter households in Fremont in 2019, nearly 40 percent (11,441 households) lived in single-family units, which can indicate an increased displacement risk in strong housing markets like Fremont. Single family units tend to be larger than multifamily units and likely fill an important role in housing larger renter households in Fremont, consistent with the relatively large household size among Fremont renters (3.03 pe rsons per household). However, renters living in single -family homes can be particularly vulnerable to displacement in strong housing markets because they are susceptible to the same potential rent increases as other renters but could also be displaced if the owner decides to sell the home while sale prices are high.

Table 7: Type of Housing by Tenure, 2015-2019

Housing Type Number Percent Number Percent Number Percent City of Fremont
Single Family Detached 7,640 25.7% 36,445 79.4% 44,085 58.2% Single Family Attached 3,801 12.8% 6,484 14.1% 10,285 13.6% Multifamily 2 to 4 Units 2,070 7.0% 543 1.2% 2,613 3.5% Multifamily 5 or More Units 16,095 54.1% 1,711 3.7% 17,806 23.5% Mobile Home/Other 169 0.6% 729 1.6% 898 1.2%
Total Occupied Households 29,775 100.0% 45,912 100.0% 75,687 100.0% Average Household Size
Housing Type Number Percent Number Percent Number Percent Alameda County
Single Family Detached 58,176 21.7% 248,990 80.6% 307,166 53.2% Single Family Attached 21,185 7.9% 29,020 9.4% 50,205 8.7% Multifamily 2 to 4 Units 48,625 18.1% 9,365 3.0% 57,990 10.0% Multifamily 5 or More Units 138,711 51.7% 15,711 5.1% 154,422 26.8% Mobile Home/Other 1,589 0.6% 5,805 1.9% 7,394 1.3%
Total Occupied Households 268,286 100.0% 308,891 100.0% 577,177 100.0% Average Household Size
Note:
(a) Includes boats, RVs, vans, and any other non-traditional residences.

Sources: U.S. Census Bureau, American Community Survey, 2015-2019 five-year sample data; BAE, 2020.

Renters Owners

2.67 2.94 2.82
All Households
Renters Owners

3.03 3.13 3.09
All Households
26 AFFORDABLE HOUSING I NVENTORY
Fremont has a significant shortage of affordable units, leaving limited options for lower-income households that are priced out of market -rate rental and for -sale homes . The application process for affordable housing in Fremont is extremely competitive, with demand for affordable housing significantly exceeding the supply of affordable units. Affordable housing developments in Fremont have significant waiting lists, and many waiting lists for affordable units are currently closed due to excessive demand.

Recent development activity in Frem ont has consisted primarily of units for above moderate - income households. Although Fremont has already significantly exceeded its 2015 -2023 Regional Housing Needs Allocation (RHNA) target for above moderate-income units, it has fallen behind on its very l ow-income, low-income, and moderate -income housing production goals.

Fremont was allocated a total of 5,455 housing units across all income groups in the current RHNA cycle (2015 -2023), and as of October 2020, had already permitted more than 6,000 units. However, the vast majority (87 percent) of the permitted units to date have been above moderate-income units affordable to households with incomes over 120 percent of AMI, a situation not unique to Fremont. Southern California News Group Housing Permit Re port Card awarded Fremont a grade of C for 2019, higher than the statewide overall average of C minus on how well it is meeting its RHNA goals. Although the City is behind in meeting the RHNA goals in very-low and low-income categories, the City permitted a total of 785 affordable units as of October 2020. Slightly over half of these units were very low -income units, while 47 percent were low-income units with hundreds more affordable units in the pipeline, making a significant mitigating impact on displacement.

Figure 15: Fremont 2015-2023 RHNA Progress

Note:
(a) Data as of 10/6/2020. Sources: California Department of Housing and Community Development; BAE, 2020.

27 RECENT HOUSING UNIT GROWTH
Recent housing unit growth in Fremont has been more skewed towards single family units than recent housing unit growth in the County. According to California Department of Finance data, Fremont gained a total of 3,320 housing units between 2010 and 2020. Roughly half of the housing unit growth in Fremont since 2010 has been single family units (both attached and detached). Single family detached units in particular have accounted for a much larger share of the housing unit growth in Fremont (42 percent) compared to the County ( 33 percent). In Alameda County, recent housing unit growth has been more concentrated in multifamily units, with growth in units in buildings with five or more units accounting for roughly half of the total housing unit growth seen countywide from 2010 to 2020 . In Fremont, units in multifamily buildings with five or more units made up approximately 45 percent of the housing unit growth between 2010 and 2020.

Figure 16: Change in Housing Units, Fremont, 2010-2020

Sources: State of California, Department of Finance, Table E-5, 2020; BAE, 2020.

Figure 17: New Housing Unit Growth by Type, 2010-2020

Sources: State of California, Department of Finance, Table E-5, 2020; BAE, 2020.

28 SCHOOL DISTRICT ENRO LLMENT TRENDS
The Fremont Unified School District has a large population of socioeconomically disadvantaged students, many of whom are members of racial and ethnic minority groups . Approximately 7,170 students enrolled in the Fremont Unified School District are conside red socioeconomically disadvantaged (SED), meaning that these students are eligible for the free or reduced-price meal (FRPM) program; are migrant, homeless, or foster youth; and/or do not have any parents that are high school graduate s. A significant sha re (86 percent) of the socioeconomically disadvantaged students in the Fremont Unified School District are persons of color. Hispanic and Latino students account for 41 percent of the district’s SED students, despite Hispanic and Latino residents making up just 14 percent of the citywide population.

Figure 18: Socioeconomically Disadvantaged Students by Ethnicity, Fremont Unified School District, 2019-20

Sources: California Department of Education (ED-Data); BAE, 2021.

29 Since the 2017-18 school year, the Fremont Unified School District has experienced unexpected declines in student enrollment, indicating that families with children have been moving out of the City. Fremont Unified School District enrollment increased steadily between the 2014 -15 school year and the 2017-18 school year, with a total increase of 4.6 percent during this period.

Between the 2017-18 and 2020-21 school years, however, enrollment in the district decreased by 2.2 percent, despite continuing increases in the City’s overall population. The Fremont Unified School District has seen large enrollment declines at elementary schools, suggesting that younger families are being disproportionately aff ected. According to a recent analysis of enrollment trends at the Fremont Unified School District , the enrollment declines are likely associated with housing affordability and increased housing costs. 2 This has coincided with a gradual decrease in students receiving free or reduced-price meals, English learners, and Foster Youth, both in numerical terms and as a percent of total enrollment.

Figure 19: Fremont Unified School District Enrollment, 2014-15 to 2020-21

Note:
(a) Total enrollment is the certified California Basic Educational Data System (CBEDS) data count. Free and Reduced- Price Meal/English Learner/Foster Youth data was not available for the 2020-21 school year.

Sources: Davis Demographics Student Population Forecast Fall 2020/21 Report; California Department of Education (ED- Data); BAE, 2021.

2 This topic was discussed during the October 16, 2019 FUSD Board meeting (https://video.ibm.com/recorded/124274027?t=7738).

30 SPECIAL NEEDS POPULA TIONS AND HOUSEHOLDS
Fremont is home to thousands of special needs households and individuals , including a significant number of large families, seniors, and persons with disabilities, which are more likely to have affordable housing needs and may face considerable hardship if displaced. As of 2019, Fremont had approximately 19,215 senior households, 8,400 la rge households, and 1,675 single female headed households. More than 16,500 Fremont residents have at least one disability, including 9,080 seniors. These special populations often face unique housing problems due to physical limitations, health care cos ts, and income, which makes it more challenging for them to find and pay for housing. In addition, many special needs household rely on services and social networks in their communities and could face severe hardship if displaced. For example, single-parent households may rely on family or friends that live nearby to help with childcare or may have established other childcare arrangements locally. Individuals with disabilities may have established relationships with service providers or familiarity with local transit networks, making displacement particularly disruptive to their ability to meet critical needs. Seniors that are displaced could be forced to move away from necessary services and social networks. While displacement can negatively impact all types of households and individuals, special needs households are often disproportionately impacted by negative consequences from displacement.

Figure 20: Special Needs Populations and Households, Fremont

Sources: U.S. Census Bureau, American Community Survey, 2015-2019 five-year sample data; BAE, 2020.

31 DISPLACEMENT RISK FO R SPECIAL NEEDS HOUS EHOLDS
Special needs households in Fremont tend to have lower incomes than other households, indicating that these households may experience disproportionate displacement risk. Figure 21 shows the distribution of household income levels among all Fremont households, elderly households in Fremont ( defined by HUD as households with one or two persons, with either person 62 years of age or over), Fremont households that include at least one person with a disability, and large family households (defined as households with five or more people). As shown, elderly households and households that include at least one person with a disability are significantly more likely than average to be extremely low -income, very low -income, or low - income households, indicating that these types of special needs households could benefit disproportionately from housing that serves lower-income households. While comparable data are not available for female-headed households, ACS data collected between 2015 and 2019 indicate that 9.6 percent of female-headed family households in Fremont have incomes below the poverty level, compared to just 2.7 percent of all family households in Fremont. To the extent that lower-income Fremont households are impacted by displacement pressures , these data suggest that elderly residents , residents with disabilities , and female -headed households are significantly more likely to be impacted than the population at large.

In contrast, large family households in Fremont tend to have slightly higher incomes than average for Fremont households. However, these families are comparatively less likely to be served by the types of units that will be funded through Measure A1 funds regardless of household income level because of their need for large units.

Figure 21: Income Distribution by Household Type, Fremont, 2013-2017

Note: Data reflect HUD-defined household income limits. HAMFI stands for HUD Area Median Family Income. HUD defines an elderly household as a household with one or two persons, with either person 62 years or over.

Sources: U.S. Department of Housing and Urban Development, 2013-2017 Comprehensive Housing Affordability Strategy (CHAS) data; BAE, 2021.

32 Among lower -income renter households in Fremont , elderly households and large family households are more likely to have a high housing cost burden, potentially indicating a disproportionate displacement risk for these households. Figure 22 shows housing cost burden for lower-income (80 percent of AMI or less) households in Fremont, including all lower-income Fremont households, lower -income elderly households in Fremont, and lower -income large family households. The figure shows that 93 percent of large family households that are lower- income renters pay more than 30 percent of their income for rent, compared to 8 5 percent of all lower-income renter households in Fremont. While 83 percent of lower-income elderly renter households pay more than 30 percent of their income for housing, comparable to the citywide proportion among lower-income renters, this is likely because many of these households live in affordable senior complexes. Consequently, lower-income elderly renter households that do not live in affordable housing may still be disproportionately likely to have a high housing cost burden. Approximately 57 percent of lower-income elderly renter households pay more than 50 percent of their income on housing, a significantly higher share than lower income renters overall in Fremont (45 percent). These figures indicate that at least some of Fremont’s lower - income special needs populations that rent their homes are struggling to afford housing and at a greater risk of displacement than lower-income renters in Fremont in general.

Figure 22: Housing Cost Burden Among Lower-Income Renters (up to 80% of AMI) Households in Fremont

Notes:

Data reflect HUD-defined household income limits. HAMFI stands for HUD Area Median Family Income. (a) HUD defines an elderly household as a household with one or two persons, with either person 62 years or over.

Sources: U.S. Department of Housing and Urban Development, 2013-2017 Comprehensive Housing Affordability Strategy (CHAS) data; BAE, 2021.

33 COMMUTE TRENDS
Worker commute flows data shows an increasing mismatch between the City’s workforce a nd its labor force, indicating that many people working in local jobs might be having an increasingly difficult time affording housing in Fremont. The share of Fremont workers who also live in the City of Fremont has fallen significantly since 2010, a sign that housing production is not keeping pace with job growth in the City. In 2010, approximately 22 percent of Fremont’s workers lived in Fremont. A s of 2018, the share of Fremont workers residing in Fremont had declined to approximately 17 percent. Notably, there has been a significant increase in the number of Fremont workers living in more affordable cities such as Hayward, Oakland, and San Jose since 2010. Meanwhile, the share of employed Fremont residents commuting to work in Santa Clara County, San Mateo County, and San Francisco County has increased substantially since 2010.

This trend has coincided with a large increase in the number of higher income households living in Fremont.

Table 8: Change in Fremont Workers by Place of Residence, 2010-2018

Place of Residence Number Percent Number Percent Number Percent Alameda County 35,928 44.3% 44,901 39.9% 8,973 25.0%
Fremont 17,465 21.5% 19,415 17.3% 1,950 11.2%
Hayward 3,044 3.8% 5,114 4.5% 2,070 68.0%
Union City 3,266 4.0% 3,894 3.5% 628 19.2%
Newark 2,455 3.0% 3,083 2.7% 628 25.6%
Oakland 1,662 2.1% 2,738 2.4% 1,076 64.7%
Santa Clara County 21,401 26.4% 31,009 27.6% 9,608 44.9% San Jose 12,040 14.9% 18,554 16.5% 6,514 54.1%
Contra Costa County 4,542 5.6% 6,206 5.5% 1,664 36.6%
San Joaquin County 2,912 3.6% 5,235 4.7% 2,323 79.8%
San Mateo County 3,129 3.9% 4,448 4.0% 1,319 42.2%
Stanislaus County 1,311 1.6% 2,332 2.1% 1,021 77.9%
San Francisco County 1,494 1.8% 2,161 1.9% 667 44.6%
All Other Counties 10,338 12.8% 16,117 14.3% 5,779 55.9% Total Fremont Workers 81,055 100.0% 112,409 100.0% 31,354 38.7% Sources: Longitudinal Employer-Household Dynamics via OnTheMap, 2010 & 2018; BAE, 2020. 2010 2018 2010-2018 Change
34 SERVICE PROVIDER SUR VEY RESPONSES
Local s ervice providers report that displacement is a serious issue in Fremont , and disproportionately impacts racial and ethnic minority groups and special needs households and individuals. As part of this study , a survey was sent to dozens of representatives from local service providers to ask whether Fremont households are currently experiencing displacement or are at high risk of experiencing displacement. The service prov iders included agencies and organizations providing services to lower income households and individuals , persons experiencing homeless, elderly residents, residents with disabilities, and other vulnerable and underserved populations in Fremont as well as surrounding areas. Of the 21 service providers that responded to the survey, 15 said that their clients have moved out of Fremont due to economic hardship, are currently at risk of displacement, and/or are planning to move out of Fremont due to economic ha rdship or other reasons beyond their control . Service providers indicated that displacement pressure disproportionately impacts low -income households, with a sizeable portion of respondents also reporting that displacement disproportionately impacts racial and ethnic minorities, people with disabilities, and seniors. Some service providers also reported that displacement pressure disproportionately impacts single-parent households, large families, and families with children.

Figure 23: Service Provider Survey Responses

35 QUOTES FROM LOCAL SOCIAL SERVICE PROVIDERS

Many of our clients have definitely had to move
away. Their children are the ones who are deeply
affected. Young professionals have to work 2-3 jobs
just to be able to stay in Fremont. For those who
stay in California, they are moving to the Central
Valley, others to Florida or Texas.

The only way that clients are able
to stay in the Tri-City area is if
housing such as BMR, low-income
housing becomes available.

For the apartment buildings that offer units for low
income units, the lottery is like a real-life lotto. The wait time to turn in applications is extremely long.

Opportunities in Fremont [are] almost non-existent
and sadly many of our families are leaving the area.

36 SUMMARY OF FINDINGS
The City of Fremont has instituted a local live/work policy for affordable housing developments in Fremont, which the City plans to apply to four affordable housing projects in the development pipeline that have received funding through Alameda County Meas ure A1 bond funds . A live/work preference would allow individuals and households who live or work in Fremont and meet the eligibility requirements to have priority for units in these developments. Alameda County requires that cities conduct a displacemen t study in order to apply a local live/work preference to affordable housing developments funded through County Measure A1 bonds. The displacement study must demonstrate that a) Fremont residents are at greater risk of displacement than residents of Alameda County as a whole; b) current Fremont residents are being displaced; and c) a local live/work preference would prevent further displacement.

The information presented in this report demonstrates that all three of these conditions are met:

Fremont renters are at greater risk of residential displacement than renters of Alameda County overall, some lower-income Fremont residents have likely already been displaced, and a local live/work preference would help to prevent further displacement. Data on housing cost burden and overcrowding among Fremont residents strongly indicates that Fremont renters are more likely to be at risk of displacement than renters in Alameda County overall. Displacement risk disproportionately impacts households and individuals in Fremont with special housing needs, including seniors, people with disabilities, single -parent households, and large families. In addition, Fremont renters have experienced significant rent increases over the past decade, to a greater degree than renters in Alameda County as a whole. Moreover, t he number of lower- income renters in Fremont has decreased in recent years , while the number of lower -income renters in Alameda County overall increased slightly , suggesting that lower -income Fremont renters have already been disproportionately impacted by displacement . Data on commute flows, FUSD school enrollment data, and reports from local social service providers further indicate that Fremont households have been displaced, while many remaining lower-income households in Fremont continue to be vulnerable to displacement.

The findings in this report confirmed that Fremont renters are at greater risk of residential displacement than renters of Alameda County overall. Moreover, FUSD school enrollment data, commute trends, and survey responses from local social service providers are strong indicators that residential displacement has been occurring in Fremont. For many lower -income Fremont residents, a local live/work preference for affordable rental housing in Fremont is necessary to prevent displacement. Fremont’s lower-income renters are unlikely to be able to purchase a home and are therefore typically limited to renting market-rate rental units. These rental units are generally more expensive than lower -income households can afford and do not provide residents with protection from future rent increases. Even residents with Housing Choice Vouchers are often unable to find housing in Fremont due to the high cost and limited availability of rental units. These findings demonstrate the need for the City to have a local live/work preference policy for affordable rental housing, including for projects funded by Alameda County Measure A1 bonds, to mitigate displacement among Fremont’s vulnerable populations.

Fremont City CouncilSeptember 20, 2022

Fremont City Council
September 20, 2022