Revised Report
February 2025
SANTA CLARA COUNTY
REGIONAL HOUSING
MARKET ANALYSIS
Prepared for
Santa Clara County Urban County and HOME Consortium
P
repared by
Root Policy Research
www.rootpolicy.com
Attachment 3
ROOT POLICY RESEARCH
Table of Contents
Background……………………………………………………………….1
Demographic Context
Population ............................................................................. 3 Race/Ethnicity ....................................................................... 5 Households ........................................................................... 6 Household Income ............................................................... 7 Workforce .............................................................................. 9
Housing Profile
Housing Production .......................................................... 12 Vacancy ............................................................................... 15 Age of Housing Stock ........................................................ 15 Type of Housing ................................................................. 17 Homeownership ............................................................... 18
Vulnerable Populations Needs Assessment
People Experiencing Homelessness ............................... 19 Special Needs Households ................................................ 21 HUD-Defined Housing Problems ..................................... 23
Affordability Analysis
Defining Affordability ......................................................... 25 Market Trends .................................................................... 27 Affordability Gaps ............................................................... 30
Summary of Key Findings ……………………………………37
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Santa Clara County Regional Housing Market Analysis
Background
Background
This component of the Consolidated Plan supplements the HUD-required Needs Assessment (NA) and Market Analysis
(MA) sections. It provides additional detail on housing market conditions for Santa Clara County and local communities within the county.
Geographic Areas. This report uses HUD -defined
geographic groupings that determine eligibility to receive HUD block grant funds. “Participating Jurisdictions” refers to entitlement communities receiving direct grants from HUD but collaborating on reporting requirements. “Urban County” jurisdictions can receive the Community Development Block Grant, or CDBG, from the County. The “HOME Consortium” is the group of jurisdictions eligible to receive the HOME Investment Partnership Program funding through the County.
Participating Jurisdictions are the c ities of Cupertino, Gilroy, Milpitas, Mountain View, Palo Alto, Santa Clara, Sunnyvale, and the Santa Clara Urban County Program.
The Urban County Program includes the unincorporated
communities within Santa Clara County, in addition to seven small jurisdictions: the cities of Campbell, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, Morgan Hill, and Saratoga.
The HOME Consortium consists of the cities of Cupertino, Gilroy, Palo Alto, and the Urban County.
*The City of San José is an important regional partner, but is developing their HUD -required Consolidated Plan separately and therefore, not listed as a “Participating Jurisdiction.” Data for San José is included throughout this report for context.
A note on methodology. The data used for the market
analysis come from a variety of sources. In all cases, the data represent the latest, most readily available data to describe the housing market. Primary data sources include:
American Community Survey (ACS) estimates from the
United States Census Bureau (national, state, and county metrics reflect 1 -year ACS estimates while sub -county geographies reflect 5-year ACS estimates);
Comprehensive Housing Affordability Strategy (CHAS) data from HUD.
Various market sources including Zillow Research and
CoStar Group.
It is important to note that data contain a margin of error— meaning the actual market data could be larger or smaller than the estimate. Margin of error risk is greater in small
geographies. Given this, the data in this section should be interpreted as sug gesting a likely number or magnitude of change rather than a definitive number or percentage,
especially in smaller jurisdictions.
Data labeled as “CHAS” are from a proprietary dataset
maintained by the U.S. Department of Housing and Urban
Development (HUD) and, at the time this section was prepared, newer data were not available. Use of these data for part of the analysis is required for the HUD Consolidated Plan.
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Santa Clara County Regional Housing Market Analysis
Background
Figure 1. Participating Jurisdictions and Urban County
Source: Root Policy Research.
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Santa Clara County Regional Housing Market Analysis
Demographic Context
Demographic Context
This section provides an overview of population and
households as context for the subsequent housing market and affordability analyses.
KEY FINDINGS:
The t otal p opulation in Santa Clara County is relatively stable and the distribution of household types is similar to the state overall. The county’s racial and ethnic profile, however, is distinct from the state with a higher proportion of Asian residents and fewer White and Hispanic residents. Santa Clara County incomes are higher than the state
overall and have increased faster than the state in recent years, though not enough to keep up with housing prices. Dominant employment industries in the county pay e ither very high wages (manufacturing and professional services) or very low wages (health care and accommodation/food
services). In-commuting is on the rise increasing from 39% in 2012, to 41% in 2017, and to 44% in 2022).
POPULATION. Santa Clara County is home to about
1.9 million residents, about half of whom live in the City of San José. Population growth was modest but positive from 2010 through 2017, flat through 2020 and then declined for the two years following the COVID -19 pandemic. Recent estimates show a return to positive growth through 2023. Figure 2 Shows total population and the year-over-year population growth for Santa Clara County 2010 through 2023.
Figure 2.
Santa Clara County
Population, 2010-
2023
Source:
2010-2023 ACS and Root Policy
Research..
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Santa Clara County Regional Housing Market Analysis
Demographic Context
Among Participating Jurisdiction and Urban County communities, Gilroy, Los Gatos, Milpitas, Morgan Hill, and Unincorporated areas had the strongest growth (see figure 3).
Figure 3.
Population
Changes,
Participating
Jurisdictions, 2013-
2023
Source:
2013, 2018, and 2023 ACS, and Root
Policy Research..
Jurisdiction 2013-2023 2018-2023
S
anta Clara County 1,862,041 1,937,570 1,877,592 1% -3%
San José 968,903 1,026,658 990,054 2% -4%
Participating Jurisdictions
Cupertino 59,080 60,614 58,886 0% -3%
Gilroy 49,767 55,525 58,561 18% 5%
Milpitas 67,695 77,457 78,216 16% 1%
Mountain View 75,477 80,993 82,363 9% 2%
Palo Alto 65,234 67,019 67,231 3% 0%
Santa Clara (city) 117,817 126,209 129,239 10% 2%
Sunnyvale 143,315 152,323 153,455 7% 1%
Urban County Program 264,920 275,402 285,292 8 % 4%
Campbell 39,856 42,470 42,848 8% 1%
Los Altos 29,389 30,588 30,736 5% 0%
Los Altos Hills 8,126 8,517 8,367 3% -2%
Los Gatos 29,809 30,922 32,773 10% 6%
Monte Sereno 3,413 3,492 3,459 1% -1%
Morgan Hill 38,832 43,876 45,152 16% 3%
Saratoga 30,335 30,886 30,335 0% -2%
Unincorporated 85,160 84,651 91,622 8% 8%
California 38,332,521 39,557,045 38,965,193 2% -1%
United States 316,128,839 327,167,439 334,914,896 6% 2% Total Population Population Change Pop Change Chart
2013 2018 2023
-20% -10% 0% 10% 20%
2013-2023 2018-2023
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Santa Clara County Regional Housing Market Analysis
Demographic Context
RACE/ETHNICITY. Santa Clara County’s racial and
ethnic profile is distinct from California overall in that it has a higher proportion of Asian residents and lower proportions of non-Hispanic White and Hispanic residents.
Racial and ethnic distribution varies by community, most starkly in the following locations:
Cupertino and Milpitas have a disproportionately high representation of Asian residents;
Gilroy has a high representation of Hispanic residents; and Most Urban County Program communities have a
disproportionately high representation of White residents.
Figure 4 shows the racial/ethnic distribution of the County, Participating Jurisdictions, and Urban County Program
communities. In this figure—and throughout the report—race categories (White, Asian, Black/African American, American Indian or Alaska Native, and Other/Multiples races) reflect people who identify as non-Hispanic and the specified race. All residents—regardless of race —who identify their ethnicity as Hispanic are included in the Hispanic group. American Indian and Alaska Native is abbreviated as AIAN throughout.
Figure 4.
Race and
Ethnicity,
Participating
Jurisdictions,
2023
Note:
Racial/ethnic categories in the
figure are mutually exclusive
(e.g., White means non -
Hispanic white).
AIAN means American Indian
or Alaska Native.
Source:
2023 ACS and Root Policy
Research.
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Santa Clara County Regional Housing Market Analysis
Demographic Context
HOUSEHOLDS. Just over one quarter of households
in the county include children (24% of households are married or cohabitating with children and another 4% are single parent households). Another 36% of households reflect married or cohabitating couples without children . Nearly a quarter (24%) are single -person households and 13% are non- family
roommate households.
Household configuration is both a product of housing prices and availability (e.g., needing roommates to afford rent) but also a driver of housing production and unit type (developers trying to meet existing preferences and demand). Figure 5 shows househol d type for the County, Participating
Jurisdictions, and Urban County Program communities. The U.S., California, and San José are included for context.
Figure 5.
Household Type,
Participating
Jurisdictions,
2023
Source:
2023 ACS and Root Policy
Research.
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Santa Clara County Regional Housing Market Analysis
Demographic Context
HOUSEHOLD INCOME. The median income in
Santa Clara County is $155,000—double the median income for the United States ($78,000) and substantially higher than the statewide median of $96,000.
As shown in Figure 6, Santa Clara County incomes have also increased faster over the past 10 years than incomes in country and state overall. However, as evident in subsequent sections, income gains were not sufficient to keep up with housing price and rent increases.
Figure 7, on the following page, shows median income by tenure for Participating Jurisdictions and Urban County Program Communities. It should be noted that, for some
jurisdictions, the median is likely higher than what the Census Bureau tracks, resulting in a median of $250,000 (the highest income cutoff in ACS data).
Among Participating Jurisdictions and Urban County Program Communities, Gilroy, Campbell, and Morgan Hill have the lowest median incomes, close to San Jose’s, but much higher than California and the U.S.
Figure 6.
Median
Household
Income by
Tenure, 2013-
2023
Source:
2013, 2018, and 2023
ACS and Root Policy
Research.
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Santa Clara County Regional Housing Market Analysis
Demographic Context
Figure 7.
Median Income by Tenure, Participating Jurisdictions, and Urban County Program Communities, 2023
Source: 2023 ACS and Root Policy Research..
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Santa Clara County Regional Housing Market Analysis
Demographic Context
WORKFORCE. Key industries in the county include
manufacturing and professional services—both of which yield relatively high annual wages. However, health care and
accommodation/food services are also leading industries (top five by size) and yield some of the lowest average annual wages.
Workers per household. As shown in Figure 9 on the
following page, t he labor force participation rate is relatively high in Santa Clara County (83% ). Forty-five percent of households include at least 2 workers, and 11% have 3 or more workers per household. Gilroy and Milpitas have the highest proportion of households with 3 or more workers (15%).
Figure 8.
Employment and
Wages, Santa
Clara County,
2023
Source:
BLS QCEW and Root Policy
Research.
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Santa Clara County Regional Housing Market Analysis
Demographic Context
Figure 9. Workers per Household, Participating
Jurisdictions, 2023
Source: 2023 ACS and Root Policy Research.
Commuting. Just over half (56%) of primary jobs located in Santa Clara County are filled by Santa Clara residents; the remaining 44% of primary jobs are filled by in-commuters. The proportion of in-commuters has increased gradually over time (from 39% in 2012, to 41% in 2017, up to 44% in 2022). Figure 10 shows inflow and outflow of workers to and from Santa Clara County.
The rise in in-commuting is likely driven by both limited housing supply (jobs increased faster than housing units over the past decade) and rising prices in Santa Clara County. In-commuters are primarily coming from Alameda County (25% of in -
commuters), followed by San Mateo County (14%), San
Francisco County (7%) and Contra Costa County (7%). Each of these counties, except San Mateo, has lower median rents and home values than Santa Clara County.
Figure 10. Inflow and Outflow of Workers, Santa Clara
County, 2012-2022
Source: US Census Bureau Longitudinal Employment-Household Dynamics and Root Policy Research
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Santa Clara County Regional Housing Market Analysis
Demographic Context
Figure 11 highlights commuting characteristics. Commute times are longest for Gilroy and Morgan Hill residents.
Figure 11. Commute Characteristics, Participating Jurisdictions, 2023
Source: 2023 ACS and Root Policy Research.
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Santa Clara County Regional Housing Market Analysis
Housing Profile
Housing Profile
This section provides an overview of Santa Clara’s
housing stock, including production trends, age,
vacancy rates, and type of units. It also showcases
trends in homeownership.
KEY FINDINGS:
Housing production has not kept pace with job
growth, resulting in an undersupply of housing
relative to jobs.
Permit volume rebounded to pre -Great
Recession levels, though the currently high
cost of debt may delay construction and
delivery of future projects.
Santa Clara County has more housing product
diversity than California overall with a higher
proportion of missing middle product types
However, housing diversity varies widely
across communities.
Homeownership (54%) in Santa Clara County
declined slightly since 2013 and 2019, while
homeownership in California and the United
States shows the opposite trend.
HOUSING PRODUCTION. Figure
12 shows the change in housing units over the past
10 years. Despite an increase in housing units
coupled with population decline over the past five
years, vacancy rates remain very low, signaling a tight housing market.
Housing production did not keep pace with economic growth over the past decade (total jobs increased 18% between 2013 and 2023), contributing to an undersupply of housing relative to jobs.
Figure 12. Housing Units, County and Communities, 2013-2023
Source: 2013, 2018, and 2023 ACS, and Root Policy Research.
Jurisdiction 2013-2023 2018-2023
S
anta Clara County 642,654 678,530 703,922 10% 4%
San José 319,700 334,350 343,058 7% 3%
Participating Cities
Cupertino 21,473 21,788 22,341 4% 3%
Gilroy 15,024 16,585 17,732 18% 7%
Milpitas 20,744 23,574 25,763 24% 9%
Mountain View 33,468 35,903 38,770 16% 8%
Palo Alto 27,789 27,753 29,104 5% 5%
Santa Clara (city) 44,632 46,485 51,886 16% 12%
Sunnyvale 56,168 58,915 61,808 10% 5%
Urban County Progra 97,192 100,012 103,747 7 % 4%
Campbell 16,616 17,819 17,950 8% 1%
Los Altos 11,493 11,040 11,620 1% 5%
Los Altos Hills 3,052 3,356 3,430 12% 2%
Los Gatos 13,102 12,925 13,901 6% 8%
Monte Sereno 1,259 1,251 1,439 14% 15%
Morgan Hill 13,133 15,070 15,025 14% 0%
Saratoga 11,324 11,417 11,404 1% 0%
Unincorporated 27,213 27,134 28,978 6% 7%
California 13,791,262 14,277,867 14,762,527 7% 3%
United States 132,808,137 138,539,906 145,333,462 9% 5% Total Housing Units Housing Unit Change
2013 2018 2023
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Santa Clara County Regional Housing Market Analysis
Housing Profile
Figure 13 shows permit data (based on the U.S. Census Bureau’s State of the Cities Data Systems, or SOCDS) for Santa Clara County, Participating Jurisdictions, and the Urban County Program communities collectively. The scale is adjusted on each figure to maximize visibility based on each jurisdiction’s permit volume. (Note that SOCDS data may differ slightly from local permit reports but is used here for consistent comparison across communities).
Permit activity in the County overall has been fluctuating between 5,000 and 7,500 units annually with most units multifamily. “Missing Middle” housing types such as duplexes and townhomes remain a very small proportion of total permits in all parts of the county .
Housing development in Urban County Program communities is dominated by single family homes, excluding a few substantial multifamily projects in 2020 and 2022.
Figure 13. Units Permitted by Structure Type, County, Participating Cities, and Urban County Program, 1980-2023
Note: “Multifamily Units” means any unit in a building with five or more units. “Duplex or townhome” includes all units in structures with 2 to 4 units.
Source: SOCDS and Root Policy Research.
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Santa Clara County Regional Housing Market Analysis
Housing Profile
Figure 13 (Continued).
Note: “Multifamily Units” means any unit in a building with five or more units. “Duplex or townhome” includes all units in structures with 2 to 4 units.
Source: SOCDS and Root Policy Research.
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Santa Clara County Regional Housing Market Analysis
Housing Profile
VACANCY. According to ACS data, just 5% of county
housing units are currently vacant. Of those, nearly half (45%) are listed for rent or sale, 12% are rented or sold but remain unoccupied, another 12% are vacant for seasonal, recreational, or occasional use, and the remaining 31% are vacant for other or unspecified reasons. Figure 14 shows the proportion of total housing units that are vacant (inside each doughnut chart) and the distribution of reasons for vacancy among those vacant units. Due to small samples and margin of error, data for Urban County Program communities is shown collectively. Rental vacancy rates are discussed in more detail in a subsequent section on rental affordability and market trends.
Figure 14.
Overall Vacancy Rates and Distribution of Reasons for Vacancy, County and Participating Jurisdictions, 2023.
Source: 2023 ACS and Root Policy Research
AGE OF HOUSING STOCK. Santa Clara County
homes were primarily built between 1960 and 1980, driven largely by a construction boom in San José as well as other parts of the county. Gilroy and Milpitas have the newest housing stock in line with their recent population growth and housing production trends. Figure 15, on the following page, shows the distribution of year built for all housing units in the County and Participating Jurisdictions.
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Santa Clara County Regional Housing Market Analysis
Housing Profile
Figure 15.
Year Built for all Housing Units, County, Participating Jurisdictions, and Urban County Communities, 2023
Source: 2023 ACS and Root Policy Research.
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Santa Clara County Regional Housing Market Analysis
Housing Profile
TYPE OF HOUSING. Santa Clara County has more
housing product diversity than California overall with a higher proportion of missing middle product types (townhomes,
duplexes, and other attached products in small structures) paired with a lower proportion of single family homes (51% in the county compared to 58% statewide). However, product type and diversity varies widely across jurisdictions, as shown in Figure 16.
Figure 16.
Housing Units by
Structure Type,
Participating
Jurisdictions and
Urban County
Communities, 2023
Source:
2023 ACS and Root Policy
Research.
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Santa Clara County Regional Housing Market Analysis
Housing Profile
HOMEOWNERSHIP. The current ownership rate
in Santa Clara County is 54%--meaning 54% of households are owner-occupied and the remainder, 46%, are renter-occupied.
This is similar to California overall (56% owners) but lower than the U.S. (65%).
As shown in Figure 17 (at right), the ownership rate in Santa Clara County has declined slightly since 2013 (and 2019), while homeownership in California and the United States shows the opposite trend.
Figure 18 (below) illustrates how widely homeownership rates vary across the County—from 42% in Mountain View to 91% in Monte Sereno.
Figure 17.
Homeownership Rate, U.S., California, and Santa
Clara County, 213, 2019, and 2023
Source: 2013, 2019 and 2023 ACS and Root Policy Research .
Figure 18.
Homeownership
Rate,
Participating
Jurisdictions,
2023
Source:
2023 ACS and Root Policy
Research.
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Santa Clara County Regional Housing Market Analysis
Vulnerable Populations Needs Assessment
Vulnerable Populations
Needs Assessment
This section provides an overview of vulnerable populations who may have unique or acute housing needs, including people experiencing homelessness, households with HUD-defined
housing problems, and HUD -specified “non-homeless special needs populations.” Participating Jurisdictions’ Consolidated Plans contain extensive detail on each of these topics and can be referenced for additional data and analysis.
KEY FINDINGS:
During the January Point in Time Count in 2023, there were about 9,900 people experiencing homelessness (PEH) in
Santa Clara County—or 5 PEH per 1,000 total residents.
A variety of non-homeless subgroups in Santa Clara County have unique housing or service needs including elderly and frail elderly, people with disabilities, persons with substance abuse problems, persons living with HIV/AIDS, and persons experiencing domestic violence. Both services and housing are in high demand to meet acute needs.
Top needs among the specific subpopulations outlined
above are services for people needing treatment for
substance use, and housing/services for elderly residents and/or people with disabilities.
Cost burden is the most common problem in Santa Clara Couty, affecting 231,000 households countywide (47% of renters and 26% of owners).
PEOPLE EXPERIENCING HOMELESS -
NESS. A total of 9,903 individuals were counted as
experiencing homelessness in Santa Clara County in the 2023 Point in Time (PIT) count—75% of which were unsheltered and 25% were sheltered homeless . Among the countywide
homeless population:
32% were experiencing chronic homelessness;
5% were veterans;
12% were families; and
8% were youth or young adults.
Figure 19.
People Experiencing Homelessness (Point in Time
Count), Santa Clara County, 2007-2023
Source: Santa Clara County PIT, Destination Home, and Root Policy Research.
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Santa Clara County Regional Housing Market Analysis
Vulnerable Populations Needs Assessment
The racial and ethnic profile of people experiencing
homelessness in Santa Clara County indicates an
overrepresentation of Hispanic, White (any ethnic
background) and Black residents relative to their
representation in the community overall (see Figure 20).
Figure 20.
People Experiencing Homelessness (PIT Count) by
Race/Ethnicity, Santa Clara County, 2007-2023
Source: Santa Clara County PIT, Destination Home, and Root Policy Research.
Figure 21 shows PIT Count data by community, along with a per capita ratio showing the number of people experiencing homelessness per thousand residents. Gilroy, Mountain View, and San José have the highest per capita homelessness
Figure 21.
People Experiencing Homelessness (PIT Count), Santa
Clara County and Participating Jurisdictions, 2023
Source: 2019, 2022, and 2023 PIT Count Santa Clara County, 2023 ACS, and Root Policy Research .
People Exp. Homelessness -PIT Cou
Jurisdiction 2019 2022 2023
Santa Clara County 9,706 10,028 9,903 5.27
San José 6,097 6,650 6,266 6.33
Participating Jurisdictions
Cupertino 159 102 48 0.82
Gilroy 704 814 1,048 17.90
Milpitas 125 274 142 1.82
Mountain View 606 346 562 6.82
Palo Alto 313 274 206 3.06
Santa Clara (city) 326 440 461 3.57
Sunnyvale 624 385 471 3.07
Urban County Program 651 680 637 2.23
Campbell 74 216 92 2.15
Los Altos 76 65 0 0.00
Los Altos Hills 0 0 0 0.00
Los Gatos 16 58 81 2.47
Monte Sereno 0 0 0 0.00
Morgan Hill 114 60 230 5.09
Saratoga 0 0 0 0.00
Unincorporated 371 281 234 2.55
2023 PEH Per
1,000 Residents
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Santa Clara County Regional Housing Market Analysis
Vulnerable Populations Needs Assessment
SPECIAL NEEDS HOUSEHOLDS. As part
of the Consolidated Plan process, HUD asks jurisdictions specifically about the housing needs of non- homeless special needs groups including elderly and frail elderly, persons with mental/physical/developmental disabilities , persons with alcohol/drug addiction , persons living with HIV/AIDS , and persons experiencing domestic violence.
Figure 22 (on the following page) summarizes the population size of each of these groups along with an estimate of housing or service needs within each group for Participating
Jurisdictions and the Urban County Program. Total population is generally determined by ACS data (and in some cases survey
data on incidence rates); housing needs reflect HUD data on housing problems of each group, poverty within each group, and/or survey estimates of housing needs.
For people with a substance use disorder, the need estimate reflects the number of people needing treatment for substance use. This group shows the highest need for services across all jurisdictions.
The population with the second largest housing or service need is elderly residents in all jurisdictions except Sunnyvale, where people with disabilities have a higher need estimate.
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Santa Clara County Regional Housing Market Analysis
Vulnerable Populations Needs Assessment
Figure 22.
HUD-Specified Non-Homeless Special Needs Populations
Note: * Activities of daily living such as bathing, walking, and performing light housework . **Domestic violence includes rape, physical violence and/or stalking by an intimate partner.
Source: 2023 ACS, NISVS, NSDUH, CDC, and Root Policy Research .
Non-Homeless Special Needs Population Total Total Total Total Elderly (defined as 62 and older) 97,718 6,210 6% 10,786 598 6% 8,676 911 11% 13,152 1,656 13% Frail elderly (elderly person who requires
assistance with 3 or more activities of daily living*) 7,392 470 6% 957 53 6% 857 90 11% 1,284 162 13% Persons with mental, physical, and/or
developmental disabilities 38,833 5,126 13% 3,593 561 16% 5,453 878 16% 6,277 1,011 16% Persons with alcohol or other drug addiction 64,548 26,535 41% 8,101 3,293 41% 7,932 3,379 43% 11,984 5,183 43% Persons living with HIV/AIDS 927 no data no data 116 no data no data 110 no data no data 156 no data no data Victims of domestic violence** 13,351 1,380 10% 1,639 167 10% 1,555 161 10% 2,257 228 10% Non-Homeless Special Needs Population Total Total Total Total Elderly (defined as 62 and older) 11,707 1,140 10% 14,958 1,068 7% 18,253 1,521 8% 109,432 8,852 8% Frail elderly (elderly person who requires
assistance with 3 or more activities of daily living*) 906 88 10% 1,179 84 7% 1,447 121 8% 7,816 632 8% Persons with mental, physical, and/or
developmental disabilities 5,467 880 16% 4,730 738 16% 9,694 1,444 15% 64,419 10,243 16% Persons with alcohol or other drug addiction 12,894 5,644 44% 8,953 3,581 40% 21,323 9,549 45% 87,900 37,343 42% Persons living with HIV/AIDS 164 no data no data 133 no data no data 260 no data no data 1,189 no data no data Victims of domestic violence** 2,374 241 10% 1,921 201 10% 3,841 390 10% 17,282 1,787 10% With Housing or
Service Need
With Housing or
Service Need
With Housing or
Service Need
With Housing or
Service Need
Mountain View Palo Alto Santa Clara (city) Sunnyvale
With Housing or
Service Need
Urban County Program
With Housing or
Service Need
With Housing or
Service Need
With Housing or
Service Need
MilpitasGilroyCupertino
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Santa Clara County Regional Housing Market Analysis
Vulnerable Populations Needs Assessment
HUD-DEFINED HOUSING PROBLEMS.
HUD identifies four housing problems, which are reported in HUD’s Comprehensive Housing Affordability Strategy (CHAS) data:
Housing unit lacking complete kitchen facilities;
Housing unit lacking complete plumbing facilities;
Household being overcrowded (more than 1.5 people per room); and,
Households being cost burdened (spending 30% or more of their gross income on housing costs).
The CHAS data for Santa Clara County overall (including San José) identify nearly 250,000 households as having at least one of those four housing problems (about 38% of all households in the county). The most common housing problem—by far—is cost burden, affecting 231,000 households in Santa Clara County overall—about 35% of all households.
Renters are more likely than owners to experience cost
burden—nearly half of Santa Clara County renters are cost burdened, compared to about one-quarter of owners.
See Figure 23 for renter cost burden and Figure 24 for owner cost burden (both on the following page). The figures also display the severity of cost burden. Households that are “severely cost burdened,” spending more than 50% of their income on housing costs, are considered at risk of
homelessness. These households have limited capacity to adjust to rising home prices and are vulnerable to even minor shifts in rents, property taxes, and/or incomes.
Renter cost burden is highest in Gilroy, Morgan Hill, and unincorporated areas. Owner cost burden is highest in Gilroy and Lost Altos Hills.
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Santa Clara County Regional Housing Market Analysis
Vulnerable Populations Needs Assessment
Figure 23.
Renter Cost Burden
Source: 2023 ACS and Root Policy Research.
Figure 24.
Owner Cost Burden
Source: 2023 ACS and Root Policy Research.
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Santa Clara County Regional Housing Market Analysis
Affordability Analysis
Affordability Analysis
This section discusses changes in housing prices and
affordability for residents of Santa Clara County overall and by jurisdiction.
DEFINING AFFORDABILITY . The most
common measure of affordability assesses the “burden”
housing costs put on a household. If a household pays more than 30% of their gross income in rent or mortgage payment (including taxes and basic utilities), they are considered to be cost burdened. The higher the cost burden, the higher the risk of eviction, foreclosure, and homelessness due to the
challenges of households managing housing costs.
Households spending 50% or more of their income on housing are considered at risk of homelessness. These households have limited capacity to adjust to rising home prices and are vulnerable to even minor shifts in rents, property taxes, and/or incomes.
Cost burden is important because it also indicates how well a household can manage other expenses—e.g., childcare,
transportation, health care—and how much disposable income they have to contribute to the economy. Families with
persistent cost burden can struggle to attain upward economic mobility, which can have trickle down effects for their children.
It is important to note that cost burden exists in nearly every community because demand exceeds the supply of housing at various price points. Some residents—e.g., persons with disabilities living on fixed incomes—cannot avoid cost burden unless they occupy publicly subsidized housing or receive Housing Choice Vouchers. Unless an adequate supply of
affordable housing is available, being cost burdened may be the only option for certain residents.
HUD income categories. Eligibility for housing
programs rely on income limits published by the U.S.
Department of Housing and Urban Development (HUD) that
are represented as percentages of the area median family income (commonly abbreviated as “HUD AMI” or simply
“AMI”).
HUD publishes current-year income limits based on an internal calculation that estimates AMIs by household size and region.
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Santa Clara County Regional Housing Market Analysis
Affordability Analysis
Figure 25 shows the income limits and AMIs that apply to Santa Clara County and its jurisdictions in 2024.
Figure 25.
2024 HUD AMI for Santa Clara County
Source: HUD and Root Policy Research.
Figure 26 shows the change in AMI and income limits for a four-person household over the past 10 years. The rise in AMI, particularly in the last few years means households whose incomes are flat are likely to drop into lower income limit thresholds. For example, a household earning $140,000 would have been considered 100% AMI in 2020 but 80% AMI in 2024.
Figure 26.
Trends HUD AMI (4-person household) 2013-2024
Source: HUD and Root Policy Research.
Figure 27 estimates the number of households who fall into each AMI category, according to HUD data.
Figure 27.
Households
by AMI,
Santa Clara
County
Source:
HUD CHAS data and
Root Policy Research.
1 2 3 4 5
Extremely Low Income
Limits (30% AMI) $38,750 $44,250 $49,800 $ 55,300 $59,750 Very Low Income
Limits (50% AMI) $64,550 $73,750 $82,950 $ 92,150 $99,550 Low Income Limits
(80% AMI) $102,300 $116,900 $131,500 $ 146,100 $157,800 HUD Median Family
Income (100% AMI) $129,100 $147,500 $165,900 $ 184,300 $199,100 120% HUD AMI $154,920 $177,000 $ 199,080 $221,160 $238,920 Persons in Family
Household Income Owners Renters Total
30% AMI or below 32,390 56,730 89,120
30% to 50% AMI 30,645 38,785 69,430
50% to 80% AMI 43,485 45,870 89,355
80% to 100% AMI 32,360 25,725 58,085
More than 100% AMI 224,225 116,630 340,855
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Santa Clara County Regional Housing Market Analysis
Affordability Analysis
MARKET TRENDS
Rental Market. Between 2018 and 2023, median rent
increased 21% in Santa Clara County (from $2,305 to $2,781, according to ACS data) as existing rental units shifted into higher price points and new products were delivered near the top of the market. (These estimates are ACS data and reflect all rental units regardless of type—single family homes and multifamily apartments).
Figure 28.
Rent Distribution, Santa Clara County, 2018 and 2023
Source: 2018 and 2023 ACS and Root Policy Research.
Figure 29 (at right) shows the median rent for each
Participating Jurisdiction and Urban County Program
community in both 2018 and 2023. Note that the maximum
median ACS reports is $3,500 per month so the exact median for any community showing $3,500+ is unknown.
Figure 29.
Median Rent, All Units by Jurisdiction, 2018 and 2023
Source: 2018 and 2023 ACS and Root Policy Research .
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Santa Clara County Regional Housing Market Analysis
Affordability Analysis
The preceding rental data is based on ACS estimates and includes all rental units, regardless of unit type (single family and multifamily rentals). While ACS data are ideal for an overview of the full rental market; CoStar data, which focus exclusively on multifamily apartments, provide more recent data (through Q3 2024).
Figure 30 shows the CoStar effective rent for multifamily units in Santa Clara County along with the rental vacancy rate for those units. Vacancy has hovered around 4% for the past 10 year, excluding a spike in vacancy during the COVID pandemic. (Rental vacancy rates below 5%-10% signal an extremely tight rental market).
Figure 31 (at right) shows multifamily effective rents by jurisdiction in 2018 and 2024.
Figure 30.
Rent Distribution, Santa Clara County, 2018 and 2023
Source: HUD and Root Policy Research.
Figure 31.
Median Effective Rent, Multifamily Units by
Jurisdiction, 2018 and 2024
Note: There are very few multifamily units in Los Altos Hills, Monte Sereno, and Saratoga; data may include high margin of error.
Source: HUD and Root Policy Research.
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Santa Clara County Regional Housing Market Analysis
Affordability Analysis
For-Sale Market. Typical home prices are substantially higher in Santa Clara County than California as a whole. Though prices range widely by community, there are no Participating Jurisdictions where the typical home price is below $1 million. Price increases over the past five years are exacerbated by rising interest rates—further decreasing affordability.
Figure 32 shows typical home price trends for Participating Jurisdictions and Figure 33 shows the change in typical home price from 2018 to 2024 by community. .
Figure 32.
Typical Home Price Trends 2004 through 2024
Source: Zillow Research and Root Policy Research.
Figure 33.
Typical Home Price, 2018 and 2023
Source: Zillow Research and Root Policy Research.
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Santa Clara County Regional Housing Market Analysis
Affordability Analysis
AFFORDABILITY GAPS. This section places
rent and home price trends (presented in the previous pages) in the context of income trends and affordability for local resident households and workers.
Changes in Affordability 2018 -2023. Figure 34 shows
the percent change in median incomes compared to the
percent change in rental and owner costs between 2018 and 2023. This anlaysis is helps identify where incomes are —and are not—keeping pace with market changes. Where increases in rental costs outpace increases in renter incomes, renting becomes less affordable.
Purchasing power is impacted both by price changes (changes to the typical home value) as well as interest rate shifts between 2018 and 2023, which impact the income required to afford the typical home value. Both measures are included in the
following analysis.
In Santa Clara County, the rise in renter incomes was roughly on pace with the rise in median rents (both +21%), meaning there wasn’t a significant change in the trajectory of renter affordability. However, the typical home value rose faster than income (26% vs. 22%) and the income needed for a household to afford the typical home rose even faster at 62%--reflecting a substantial decline in affordability in the for -sale market, especially for first time buyers.
Similar trends are evident throughout the region. In some communities, the median renter income did rise faster than median rent; however , there were no communities where
median household income changes exceeded the change in income required to afford a typical home.
Figure 34.
Percent Change in Median Income vs. Percent Change in Rent/Home Costs, 2018-2023
Source: 2018 and 2023 ACS, Zillow Research, and Rooth Policy Research.
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Santa Clara County Regional Housing Market Analysis
Affordability Analysis
Figure 34 (continued – Participating Jurisdictions).
Source: 2018 and 2023 ACS, Zillow Research, and Rooth Policy Research.
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Santa Clara County Regional Housing Market Analysis
Affordability Analysis
Figure 34 (continued – Urban County Program).
Source: 2018 and 2023 ACS, Zillow Research, and Rooth Policy Research.
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Santa Clara County Regional Housing Market Analysis
Affordability Analysis
Subsidy gap. While the previous analysis compares
changes in incomes relative to changes in prices, the following subsidy gap analysis compares actual median rents/prices to the rents and prices affordable at different levels of AMI. (As a reminder, HUD AMI is determined by region and is therefore the same across all communities in the County; 100% AMI reflects the regional median income of a 3-person household).
The difference between market prices and what households at different AMI levels can afford if often referred to as a “subsidy gap” because it reflects the subsidy needed to bridge the gap between prices and affordability.
Figure 35 shows the rental subsidy gap between median rent in each Participating Jurisdiction compared to affordable rents at 30% AMI, 50% AMI, 60% AMI, and 80% AMI (based on a 3-person household size). There are no jurisdiction with a median rent affordable to 30% AMI households and only Gilroy has a
median rent near 50% AMI affordability. Most communities have a median rent that falls between 60% and 80% AMI.
In Santa Clara County overall, the median market rent is $2,818 leaving a subsidy gap of $330 per month for 60%AMI, $745 per month for 50%AMI, and $1,574 per month for 30% AMI renters.
Figure 35.
Rental Subsidy Gap: Median Market Rent vs Affordable Rent, 2024
Source: CoStar rental data for all communities except Palo Ato and Monte Sereno, which use ACS rent estimates; HUD Income Limits, and Root Policy Research.
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Santa Clara County Regional Housing Market Analysis
Affordability Analysis
Figure 36 shows the purchase subsidy gap between the typical home price in each community and an affordable price at 80%, 100%, 120%, and 150% AMI (based on a 3- person household size). Affordable purchase prices assume a 30 -year fixed rate mortgage with an interst rate of 6.72% after a 3.5%
downpayment. The calculation also accounts for non-mortgage housing costs (e.g., insurance, utilities, etc.) collectively assumed to account for 30% of monthly housing costs.
As illustrated by the figure, the typical home prices in all communities far exceed affordable prices, even for 150% AMI households. In Santa Clara County, the typical home price is nearly $900,000 higher than a price affordable to 150% AMI, $1 million higher than 120% AMI, and $1.1. million higher than 100% AMI affordability. Gilroy has the lowest typical home price among Participating Jurisdictions and still faces a $500,000 subsidy gap for households at 120% AMI.
Figure 36.
Purchase Subsidy Gap: Typical Home Price vs Affordable Price, 2024
Source: Zillow Research, HUD Income Limits, and Root Policy Research.
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Santa Clara County Regional Housing Market Analysis
Affordability Analysis
Affordability mismatch. To examine how well the
county’s rental housing market is meeting the affordability needs of current residents, this study uses a modeling effort called a “rental gaps analysis.”
The rental gaps analysis compares the number of renter
households by income level and the maximum monthly
housing payment they can afford, with the number of
affordable housing units in the market, including income- restricted affordable units.
The “Rental Mismatch ” rows in Figure 37 show the difference between the number of renter households and the number of rental units affordable to them at the specified affordability ranges. Negative numbers indicate a shortage of units at specific income levels; positive units indicate an excess of housing at that price point. Affordability gaps (i.e., mismatches) are shown by household AMI ranges published by HUD for a 3- person household (in line with the average household size) in Santa Clara County in 2023.1
The gaps analysis is intended to evaluate affordability needs among current residents not the need for additional housing to accommodate future or potential residents. It is important to note that the gaps analysis does not account for persons without housing, who are doubling up, living in motels/hotels,
1 The 2023 AMI is used to be consistent with the year for income and rental data.
living in their cars or camping, and in shelters. As such, the need is larger than what is identified in the rental gaps.
Collectively, in Santa Clara County, there is an affordability shortage of 41,474 units for renters with incomes below 30% AMI needing rents below $1,200 per month . There are 67,003 renters in this income range but only 25,529 units affordable to them. The cumulative affordability gap extends up to 50% AMI, meaning the market does not provide sufficient units until households are earning at least $80,300 annually.
Rental affordability gaps can be addressed through rental subsidies for existing units or through the creation of new rental units priced in the ir affordability range (less than 30% AMI).
The “shortage” that appears for high income households (>80% AMI) does theoretically show a mismatch in their ability to pay for higher priced rental units and the lack of units at that higher price point. However, it does not necessarily mean they prefer higher priced units. Many households in this income range will “rent down” to spend less than 30% of their income on housing to save money or a downpayment to purchase a home. This increases competition for naturally affordable rental units limiting the in ventory of units for people with lower incomes even more.
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Santa Clara County Regional Housing Market Analysis
Affordability Analysis
Figure 37.
Rental
Affordability
Gap, 2023
Note:
80% AMI is the highest
income break available in
the ACS income and
rental data.
Source:
2023 ACS, HUD Income
Limits, and Root Policy
Research.
Cupertino Gilroy Milpitas
Mountain
View Palo Alto
Santa
Clara city Sunnyvale
Rental Demand (max income)
< 30% AMI ($48,180) 67,003 1,265 1,917 1,429 3,468 2,241 4,943 3,803 6,063 30-50% AMI ($80,300) 43,384 607 1,104 1,137 2,276 1,159 3,081 3,681 3,964 50%-80% AMI ($128,480) 53,996 871 1,473 1,543 3,249 1,577 4,662 5,105 5,878 80%AMI+ 140,977 5,445 1,792 5,942 12,390 6,962 15,889 20,435 13,261 Rental Supply (max rent)
< 30% AMI ($1,205) 25,529 383 1,172 619 1,361 1,340 948 966 2,329 30-50% AMI ($2,008) 46,046 340 1,330 773 2,439 942 3,508 2,567 5,584 50%-80% AMI ($3,212) 136,922 1,986 2,427 4,239 9,765 3,908 13,784 15,353 11,868 80%AMI+ 112,482 5,930 1,525 4,854 9,994 7,022 12,329 15,349 10,779 Rental Mismatch: Difference in Supply and Demand
< 30% AMI -41,474 -882 -745 -809 -2,107 -901 -3,994 -2,837 -3,734 30-50% AMI 2,662 -267 226 -364 163 -216 427 -1,114 1,620 50%-80% AMI 82,926 1,115 954 2,696 6,516 2,331 9,123 10,249 5,989 80%AMI+ -28,495 484 -267 -1,088 -2,396 60 -3,560 -5,086 -2,482 Cumulative Rental Mismatch: Cumulative Difference in Supply and Demand Less than 30% AMI -41,474 -882 -745 -809 -2,107 -901 -3,994 -2,837 -3,734 Less than 50% AMI -38,812 -1,149 -519 -1,174 -1,944 -1,117 -3,567 -3,951 -2,114 Less than 80% AMI 44,115 -33 435 1,523 4,572 1,214 5,555 6,298 3,875 Santa
Clara
County
Participating Cities Urban
County
Program
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Santa Clara County Regional Housing Market Analysis
Summary of Key Findings
Summary of Key Findings
DEMOGRAPHIC CONTEXT:
The t otal population in Santa Clara County is relatively stable and the distribution of household types is similar to the state overall. The county’s racial and ethnic profile, however, is distinct from the state with a higher proportion of Asian residents (and fewer White and Hispanic residents). Santa Clara County incomes are higher than the state
overall and have increased faster than the state in recent years (though not enough to keep up with housing prices). Dominant employment in the county pay either very high wages (manufacturing and professional services) or very low wages (health care and accommodation/food services).
In-commuting is on the rise increasing from 39% in 2012, to 41% in 2017, and to 44% in 2022).
HOUSING PROFILE:
Housing production has not ke pt pace with job growth, resulting in an undersupply of housing relative to jobs. Permit volume rebounded to pre -Great Recession levels, though the currently high cost of debt may delay
construction and delivery of future projects
Santa Clara County has more housing product diversity than California overall with a higher proportion of missing middle product types However, housing diversity varies
widely across communities.
Homeownership (54%) in Santa Clara County declined
slightly since 2013 and 2019, while homeownership in
California and the United States shows the opposite trend.
VULNERABLE POPULATIONS:
During the January Point in Time Count in 2023, there were about 9,900 people experiencing homelessness (PEH) in
Santa Clara Count—or 5 PEH per 1,000 total residents.
A variety of non-homeless subgroups in Santa Clara County have unique housing or service needs including elderly and frail elderly, people with disabilities, persons with substance abuse problems, persons living with HIV/AIDS, and persons experiencing domestic violence. Both services and housing are in high demand to meet acute needs.
The CHAS data for Santa Clara County overall (including San José) identify nearly 250,000 households as having at least one “housing problem” (about 38% of all households).
The most common problem —by far —is cost burden,
affecting 231,000 households countywide (35% of all
households). Renter cost burden is highest in Gilroy,
Morgan Hill, and unincorporated areas. Owner cost burden is highest in Gilroy and Lost Altos Hills.
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Santa Clara County Regional Housing Market Analysis
Summary of Key Findings
AFFORDABILITY ANALYSIS:
The rise in renter incomes in Santa Clara County over the past 5 years , was roughly on pace with the rise in median rents (both +21%), meaning there wasn’t a significant
change in the trajectory of renter affordability. However, the market remains broadly unaffordable to many.
Collectively, in Santa Clara County, there is an affordability shortage of 41,474 units for renters with incomes below 30% AMI (needing rents below $1,200 per month).
The median market rent is about $2,800— about $750
higher than what is affordable to a 50%AMI household or roughly $1,600 higher than what’s affordable for 30% AMI renters. (These differences are often called a “subsidy gap”). Rental affordability gaps can be addressed through
subsidies for existing units or through the creation of new units priced in the needed affordability range
(concentrated below 30% AMI).
Typical home prices are substantially higher in Santa Clara County ($1.6 million) than California ($760,000) as a whole.
Prices range widely by community, but there are no
Participating Jurisdictions where the typical home price is below $1 million.
The typical home value rose faster than income (26% vs. 22%) and the income needed for a household to afford the typical home rose even faster at 62% --reflecting a
substantial decline in affordability in the for -sale market, especially for first time buyers . Similar trends are evident throughout the region.
The typical home prices in all communities far exceed affordable prices, even for 150% AMI households. In Santa Clara County, the typical home price is nearly $900,000 higher than a price affordable to 150%AMI, $1 million
higher than 120% AM