Morgan Hill

Morgan Hill’s Demographics

Housing Types in Morgan Hill

It is important to have a variety of housing types to meet the needs of a community today and in the future. In 2022, 57.13% of homes in Morgan Hill were single family detached, 18.32% were single family attached (generally the most expensive type of home), 5.34% were small multifamily (2-4 units), 11.89% were medium or large multifamily (5+ units) and 7.3% were mobilehomes. Between 2010 and 2020, the number of single-family units increased more than multi-family units. In Morgan Hill, the share of the housing stock that is detached single family homes is higher than the average of other jurisdictions in the region.
Source: California Department of Finance, 2023 Table E-5

Jobs & Housing in Morgan Hill

Jobs: 17,030
Employed Residents per Household:  1.58
Jobs per Employed Resident: 1.17
Jobs-Housing Balance Ratio: 1.05
Source: ACS 2022 5 year estimates

Note: Jobs-Housing Balance is a measurement used by planners that assumes that a balanced community is one where people can both live and work. This ratio compares the number of jobs in a community to the number of housing units.

Jobs-Housing Fit: 7.39 low wage jobs per low-cost rental unit
Source: Jobs from LEHD Origin-Destination Employment Statistics 2021; households from U.S. Census, American Community Survey B25056, B25061

Note: Jobs-Housing Fit measures the mismatch between wages and housing affordability as the ratio of low-wage jobs (less than $3,333/month) to the number of low-cost rental units (less than $1,500/month). In Morgan Hill, there are more than 4 low-wage workers competing for each affordable home.

Note: Current standards measure housing cost in relation to gross household income: households spending more than 30 percent of their income, including utilities, are generally considered to be overpaying or “cost burdened.” Severe cost burden occurs when households pay 50 percent or more of their gross income for housing. The impact of high housing costs falls disproportionately on extremely low-, very low-, and low-income households, especially renters. While some higher-income households may choose to spend greater portions of their income for housing, the cost burden for lower-income households reflects choices limited by a lack of a sufficient supply of housing affordable to these households.

Homelessness in Morgan Hill

2022 Unhoused people: 60 people, all unsheltered (-47% from 2019)

2019 Unhoused people: 114 people, all unsheltered (-71% from 2017)
Source: 2019 and 2022 Homeless Point In Time Count

Overcrowding in Morgan Hill

Total Rental Homes: 4,126
Overcrowded Rental Homes: 416
Severely Overcrowded Rental Homes: 683
Percent of Rental Homes, Overcrowded: 26.63%
Source: ACS 2022 5 year estimates

• The U.S. Census defines an overcrowded unit as one occupied by 1.01 persons or more per room (excluding bathrooms and kitchens). Units with more than 1.5 persons per room are considered severely overcrowded.

Note: Overcrowding increases health and safety concerns and stresses the condition of the housing stock and infrastructure. Overcrowding is strongly related to household size (particularly for large and very-large households) and the availability of suitably sized housing. Overcrowding impacts both owners and renters; however, renters are generally more significantly impacted. 

2023-2031 Regional Housing Needs Allocation (RHNA) 

Every eight years, the Regional Housing Needs Allocation (RHNA) process is used to assign each city and county in California their “fair share” of the region’s housing need, by income level. These homes are intended to address the housing shortage, meeting the needs of existing residents and accommodating projected growth in the region. 

The RHNA process is critical because state law requires each city and county to make a specific, actionable, and measurable plan, called a Housing Element, that complies with state law and addresses housing needs. It must identify enough sites to hold the RHNA, by income level, and create programs that remove barriers to housing production and protect residents vulnerable to displacement. Local jurisdictions must also take significant steps to affirmatively further fair housing (AFFH), addressing racial and economic segregation and disparities in access to resources, and meeting the unique housing needs of residents in protected groups. The California Department of Housing and Community Development (HCD) is responsible for certifying Housing Element compliance with state law.

In the past, many cities and counties have fallen far short of their RHNA targets, as the Bay Area’s housing crisis continues to grow. In this planning cycle, new laws give HCD additional tools to provide technical assistance and hold jurisdictions accountable to their plans. Each spring, jurisdictions are required to complete an Annual Progress Report on the Housing Element, including the number of homes permitted by income level, program actions taken, and outcomes achieved. The table below shows Morgan Hill’s target in the sixth cycle and progress to date in permitting new homes.

Permitting progress as of December 2023. HCD 2023 Housing Element Implementation and APR Data Dashboard.

2014-2022 Regional Housing Needs Allocation

The table below shows Morgan Hill’s final progress toward meeting the 2014-2022 RHNA.

Permitting progress as of December 2022. HCD 5th Cycle Housing Element Implementation and APR Data Dashboard.

Current Affordable Housing Stock

SOURCE:  City staff and Units reported in the Housing Element Annual Performance Report that received building permits through 2023 were added to the unit counts in the previously reported 2018 Base Year table.  This methodology necessarily means that any ELI units, if any, are included in the VLI category since that is how HCD has required production data to be reported.  The RHNA data on new units relies on self-reporting by jurisdiction and can include units for which building permits were issued that never got built.  The percentage of the total housing stock in the community is based the California Department of Finance’s Table E-5.

See more information on our affordable housing assets page.

Jobs & Housing in the Development Pipeline

As of January 2022, Morgan Hill has 0.80 jobs in the development pipeline for every 1 housing unit in the development pipeline.

Pipeline as of January 2022. Information reported from City of Morgan Hill.  The employment projections are derived by applying square-footage-per-employee factors to building floor areas by four building types: 250 square feet for office/R&D; 1,500 feet for hotels; 550 feet for retail/restaurant; and 2,500 feet for manufacturing/warehouse. All are figures applied to a building’s gross square footage.

Accessory Dwelling Units (ADUs)

All California cities and counties are mandated to permit ADUs and JADUs according to state law. The Legislature further updated ADU and JADU law effective January 1, 2021 to clarify and improve various provisions in order to promote the development of ADUs and junior accessory dwelling units (JADUs). These include allowing ADUs and JADUs to be built concurrently with a single-family dwelling, opening areas where ADUs can be created to include all zoning districts that allow single-family and multifamily uses, modifying fees from utilities such as special districts and water corporations, limited exemptions or reductions in impact fees, and reduced parking requirements. Please see the Accessory Dwelling Unit Handbook (PDF) for more information for local government bodies and homeowners interested in adding an ADU or JADU to their property. Our partner, the Housing Trust of Silicon Valley has kicked-off a major initiative, Small Homes, Big Impact to support ADU development throughout Santa Clara County, including outreach and education, and potential new financing mechanisms.

HCD 2023 Housing Element Implementation and APR Data Dashboard.

Affordable Housing Policies

Housing Element Policies

The Housing Element of Morgan Hill’s General Plan includes a number of general policies that support affordable housing, including pursuing opportunities for land acquisition and supporting nonprofit housing developers and other partners in seeking financing for affordable housing development.  The City has a policy that provides local residents a preference under its housing programs.

Inclusionary Housing

In 2018, Morgan Hill updated their Inclusionary Ordinance to reflect the following:

Downtown:

• For Sale: 10% of units need to be affordable to moderate income households
• Rental: 10% of units need to be made affordable to Low and Very Low Income(VLI) Households and half need to be offered exclusively to VLI households

Rest of City:

• For Sale: 15% of units need to be affordable to moderate income households
• Rental: 15% of units need to be made affordable to Low and Very Low Income(VLI) Households and half need to be offered exclusively to VLI households

Additional Resources

• City of Morgan Hill Inclusionary Housing Ordinance
• City of Morgan Hill Housing Element
• City of Morgan Hill Housing Services Division
• City of Morgan Hill Planning Division
• City of Morgan Hill Mobile Home Ordinance

Photo: Bella Terra, EAH Housing