February 8, 2022

Morgan Hill

Magnolias Affordable Housing Project entry plaza, rendering by SERA Architects

Morgan Hill’s Demographics

Population: 46,299
Households: 14,716
Housing Units: 15,350
Source: California Department of Finance, Table E-5

Employed Residents: 23,178
Source: ACS 2019 5 year estimates

In 2020, 49.0% of Morgan Hill’s population was White while 1.7% was African American, 13.7% was Asian, and 31.3% was Latinx. People of color in Morgan Hill comprise a proportion below the overall proportion in the Bay Area as a whole.
Source: 2020 Decennial Census

Rate of population growth, 2010 to 2020: 22.2%
Rate of housing unit addition, 2010 to 2020: 19.4%
Source: California Department of Finance, Table E-5

Over the same period, Morgan Hill grew more quickly than Santa Clara County, which had a 9.2% population increase, or the nine-county Bay Area region, which had a 8.6% population increase.

The number of new homes built in Morgan Hill and Santa Clara County has not kept pace with demand, resulting in longer commutes, increasing prices, and exacerbating issues of displacement and homelessness.


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 2020, 59.0% of homes in Morgan Hill were single family detached, 17.7% were single family attached (generally the most expensive type of home), 5.5% were small multifamily (2-4 units), and 9.8% were medium or large multifamily (5+ units). 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, Table E-5

Jobs & Housing in Morgan Hill

Jobs: 17,412
Employed Residents per Household:  1.58
Jobs per Employed Resident: 0.75
Jobs-Housing Balance Ratio: 1.13
Source: ACS 2019 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: 4.02 low wage jobs per low-cost rental unit
Source: Jobs from LEHD Origin-Destination Employment Statistics 2019; 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.

Renting in Morgan Hill

Percent of population that rents: 26.1%
Source: ACS 2019 5 year estimates

Median Monthly Rent (1 bedroom apartment): $2,798
Rent Change Year over Year: +10%
Source: Zumper, February 2022

Cost Burden in Morgan Hill

Cost-Burdened (30% – 50% income spent on housing)
Renter Households: 23.7% of renter households (919)
Homeowner Households: 25.8% of homeowner households (1,000)

Severely Cost-Burdened (more than 50% of income spent on housing)
Renter Households: 15.2% of renter households (1,277)
Homeowner Households: 10.9% of homeowner households (1,193)
Source: ACS 2019 5 year estimates

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: 3,875
Overcrowded Homes: 357
Severely Overcrowded Homes: 178
Percent of Rental Homes, Overcrowded: 13.8%
Source: ACS 2019 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. 

2014-2022 Regional Housing Needs Allocation 

Every eight years, the Regional Housing Needs Allocation (RHNA) process is used to assign each city and county in California their “fair share” of new housing units to build. These units of housing are intended to accommodate existing need and projected growth in the region. The RHNA process is critical because it requires all cities and counties to plan for the housing needs of their residents, regardless of income, in an effort to plan for future growth and ease the Bay Area’s acute housing crisis. 

Many cities and counties regularly fall short of their RHNA targets, as the Bay Area’s housing crisis continues to grow. Each spring, jurisdictions are required to provide an Annual Progress Report to show how effective their efforts have been in achieving housing development targets by income level. The table below shows Morgan Hill’s progress.

Morgan Hill’s 2015-2022 RHNA Permit Progress as of 12/2022
Affordability LevelRHNA TargetPermits IssuedProgress to Target
Very Low Income273311113.9%
Low Income154445289.0%
Moderate Income185769415.7%
Above Moderate Income3161617511.7%

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

2023-2031 RHNA Allocation

In January of 2023, about a year after local jurisdictions are given their final RHNA numbers, the local planning process will culminate in the Housing Element. This is a pivotal document that serves as a Constitution for land use planning and accounts for how and where the jurisdiction will accommodate allocated housing units. It must identify adequate sites for the full RHNA and all types of housing, including emergency shelters, rental housing, and ownership housing, and commit to policies and programs aimed at removing barriers to housing production, addressing racial and economic segregation and disparities in access to resources, providing for the unique housing needs of residents in protected categories, and protecting residents vulnerable to displacement.

Morgan Hill’s 2023-2031 RHNA by Income Level
Very Low Income Low IncomeModerate IncomeAbove Moderate IncomeTotal Allocation

Source: ABAG Approved Final RHNA Plan: San Francisco Bay Area, 2023-2031 (Dec 2021)

Current Affordable Housing Stock

Morgan Hill’s 2020 Affordable Housing Inventory
Extremely Low-IncomeVery Low-IncomeLow-IncomeModerate IncomeTotal UnitsAffordable 5 of Total Housing Stock

SOURCE:  City staff.  The percentage of the total housing stock in the community is based on 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.

Morgan Hill Development Pipeline as of January 2022
Applications SubmittedApproved ProjectsUnder ConstructionTotal
Anticipated New Jobs01,4036732,076
New Housing Units1,2647065632,593

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.

Morgan Hill ADUs Permitted: 2017 – 2022

HCD 2022 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:


  • 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

Photo: Bella Terra, EAH Housing