Dive Brief:
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Folsom, CA, northeast of Sacramento, has begun development on a “city-sized” expansion that will make room for 25,000 residents in roughly 10,000 homes, according to The Sacramento Bee.
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Build-out will last 25 years and cover 3,500 acres, of which 30% will be kept for nature-based uses, such as hiking and biking. CalAtlantic and Taylor Morrison are expected to begin construction on the first homes next year.
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The project is the city’s largest expansion in recent decades and represents continued growth in the greater Sacramento area. Critics are wary of the resulting increase in traffic, as well as whether the area’s water supply can meet the needs of new residents after the recent drought.
Dive Insight:
The Golden State’s capital city is getting ready for a much-needed infusion of new housing. Last month, the Sacramento City Council approved the development of a 3,000-home, 600-acre master planned community that will feature 2,400 homes for first-time and move-up buyers, as well as 500 rentals and 200 units for low-income seniors. The project was first approved in 2008, but a federal ban on building in the area due to the potential for flooding, along with the recession, halted development.
The prohibition on building in the area has created a strong demand pipeline — one that current supply is insufficient to meet, according to another Sacramento Bee report. Median new and resale home prices in Sacramento County were up 7.5% from April 2016 to $317,000 in April 2017 as buyers compete for what few homes there are, according to CoreLogic. As a result, homes there are on the market for 34 days, up six days year-over-year and 28 more days than the national average.
Housing affordability woes persist across the state, though they may be starting to ease. HousingWire reported last month that the median-priced existing single-family home there was affordable to 32% of buyers during Q1 2017, up one percentage point from Q4 and three percentage points from the low of 29% in mid-2008. Still, it marks the 16th-consecutive quarter that the median existing home has been affordable to fewer than 40% of buyers in the state.
As more high-paid tech workers fill the state’s major metros, Californians pulling in lower incomes have moved farther out. That’s lengthening commute times for residents who work in the state’s major cities but can’t afford to live there, or is causing them to seek alternative housing arrangements.
Change is slow, but it is afoot. The story of one teacher’s struggle to find affordable housing was the catalyst for the state’s recent $44 million investment in teacher housing in San Francisco. State lawmakers also recently passed a host of legislation that, together, aims to bring more affordable housing units online.