Santa Clara County is an expensive place to live. For both renters and homeowners, housing costs consume a large percent of income. As a result, the term affordable housing can have more than one meaning.
- Income Restricted Affordable Housing: Typically, the term affordable housing has referred to housing that is affordable to lower and sometimes moderate-income households, where developments receive subsidies to keep rents low and residents need to income qualify. These housing units are deed-restricted, so they will remain affordable at a specific income level for a long period of time (usually at least 55 years in California). Income level categories are shown at right. Learn more about resident income eligibility here in Santa Clara County!
- Housing Affordability: We now have a housing affordability problem, where people who do not qualify for income restricted housing don’t make enough money to afford housing without paying a significant percentage of their income toward housing.
Our residents and their needs are not all the same. We need a continuum of responses and a diversity of housing types aimed at different incomes and needs- everything you see pictured below, from tiny home interim housing to mixed income affordable and affordable homes included in market-rate developments.
Top row, left to right: LifeMoves in Mountain View, The Verandas in Cupertino, Edwina Benner Plaza in Sunnyvale, Tamien Station in San Jose Bottom row, left to right: Casa Feliz in San Jose, Magnolias in Morgan Hill, 330 Distel Circle in Los Altos
Where could you afford to live today?
Generally, housing is considered affordable when you don’t spend more than 30% of your income on rent or mortgage payments. If you were to rent or buy today, where could you afford to live? Try the Mercury News’ calculator tool below.
According to the California Association of Realtors Traditional Housing Affordability Index, the median priced home in Santa Clara County in the first quarter of 2022, was $1,875,000. Other sources report even higher median prices. To afford the median priced home, a purchaser would need an annual income of $371,600 assuming a 20 percent downpayment on the median-priced home.
Who can afford to own a home? The Housing Affordability Index measures the percentage of households that can afford to purchase a median-priced, single-family home in California. If you had to buy your home again today at the market rate, could you afford it?
|Geography||Percent of households that can afford median home price||Median Home Price||Monthly Payment, Including Taxes & Insurance||Minimum Qualifying Income|
|California Condo/ Townhome||32%||$640,000||$3,170||$126,800|
|California- Single Family Home||24%||$797,000||$3,950||$158,000|
|San Francisco Bay Area||20%||$1,350,000||$6,690||$267,600|
|Santa Clara County||20%||1,875,000||$9,290||$371,600|
|San Mateo County||18%||2,195,000||$10,880||$435,200|
*Data from the California Association of Realtors Traditional Housing Affordability Index First Quarter 2022
Rental Home Affordability
The HUD 2022 fair market rent (the 40th-percentile of typical rentals) in Santa Clara County for a two-bedroom apartment is $2,868. It is difficult to pinpoint precise rental rates, as different sources use different data.
Using a 30% payment standard, a renter would need to have an income of $115,000 to afford a fair market, two-bedroom rental home (or about 57% of area median income for a family of four).
Family Needs Calculator
The Family Needs Calculator, created by the Insight Center for Community Economic Development, measures the income needed to cover all monthly costs, including housing, for different types of households. You can explore the calculator tool below. Some things we learned:
- In Santa Clara County, a family of four with two school age children, would need an annual income of $129,195 to cover all monthly costs.
- A single parent with two children, preschool age and younger, would need an annual income of $150,633 to cover all monthly costs in Santa Clara County.
- California Housing Partnership: Santa Clara County Affordable Housing Needs Report, 2021
- National Low Income Housing Coalition: “Out of Reach 2021,” 2021
- U.S. Department of Housing and Urban Development: Fair Market Rents, 2021
- California Association of Realtors: Housing Affordability Index, 2021
- California Budget & Policy Center: California’s Housing Affordability Crisis Hits Renters and Households with the Lowest Incomes the Hardest April 2019
- Zillow: Where and Why the Income Gap Among Buyers, Homeowners and Renters is Widening January 2019
- Esri: “Is the American Dream Still Affordable?,” 2017
- California Budget and Policy Center: “Making Ends Meet: How Much Does It Cost to Support a Family in California?,” 2017
- Zillow: Mortgage Affordability Calculator
- Zillow: Rental Affordability Calculator
- California Legislative Analyst’s Office: “Recent Trends in Housing Affordability,” 2017