While California continues to struggle in the housing market, more and more residents are finding it hard to afford their mortgages, but in Palo Alto, CA, things may change for the better.
According to CBSSF:
The city council has unanimously passed a housing plan that would essentially subsidize new housing for what qualifies as middle-class nowadays, families making from $150,000 to $250,000 a year.
The plan would focus on building smaller, downtown units for people who live near transit and don’t own cars, along with mixed-use retail and residential developments.
While next door neighbor San Francisco ranks No. 1 in the hottest housing markets for the spring homebuying season and is also known where top-earning professionals can afford expensive housing costs, the city of Palo Alto is also known for it very high housing prices.
Not only can you find the super-rich living there, but according to CBSSF you can find teachers, firefighters and other government workers not earning enough to afford cost of living.
CBSSF states that documentary film producer Randy Bean says that while she still loves her Palo Alto neighborhood, she can’t help but notice the changes that are making it unrecognizable and fears that she can’t afford to stay there anymore.
“I just find it kind of sad that we are reducing ourselves to this small profile of young, rich, mostly white, mostly tech. It’s not the community that I moved into 33 years ago,” Bean was quoted saying.
With a two small two-bedroom homes costing between $1.5 and $2 million, it’s no wonder some residents are not happy.
“Prices have just gone through the roof, making it unaffordable for middle-class people, your firefighters, your teachers, and, frankly, some of your doctors,” Palo Alto Vice Mayor Greg Scharff said.
Scharff worries that losing middle-class workers will hurt the city. “What the council is proposing is that we work together to fund and subsidize, what is basically middle-class housing; which, traditionally, has not been subsidized,” Scharff said.
According to a new report from Fitch Ratings, San Francisco is reaching that point, with the dreaded “b” word being thrown around now in regards to San Francisco housing.
Fitch’s report suggests that Bay Area home prices are “overheating” and have reached a “level unsupportable by area income,” and asks if there is a “Bay Area bubble.”
The median price of a California home in January was $400,000, down 2.4% from a revised December 2015 price of $410,000, while the median price of a condominium was $385,000, down 3.8% for the month, the PropertyRadar latest Real Property Report found.
Compared to a year ago, median home prices were up 8.1%, while condominium prices gained 6.6%.