In Palo Alto, where even the dirt is worth seven figures, the ailing middle class needs a helping hand to meet housing costs. Mind you, down on the Peninsula, the ailing middle class makes up to a quarter million dollars a year.
The Palo Alto City Council passed a housing plan that recommends drastically increasing density. "Small units, micro-units, accessory dwelling units, co-housing, live/work...and other forms of housing" are needed to alleviate the crisis, according to the adopted City Housing Element.
None of this is unusual for the Bay Area these days, nor is the observation that assistance is needed at "all income levels." The thing that stands out about Palo Alto is precisely what those income levels are. The area median income for a family of four is $106,300, meaning that a family making up to $127,560 a year would qualify as a "moderate income" household under the new plan.
According to the Mayor’s Office of Housing, the equivalent median in San Francisco is a little less than $102,000, and the upper end of moderate income sits at a little over $122,000. In Oakland, the AMI is $93,500 a year, with moderate income households topping out at $111,500.
But the income gap between those cities and Palo Alto is a little different than just the numbers suggest, because the median home price in Palo Alto is over $2.5 million, according to Zillow, more than twice as much as San Francisco (and the market here isn’t exactly a charity drive these days either) and nearly five times the median price of a home in Oakland.
Perhaps the most revealing statistic is that Palo Alto estimates it needs to spur construction of 587 new housing units to meet the needs of even those making "Above Moderate Income," 30 percent of the overall housing need. Exactly how much money is "above"? As CBS Bay Area has it, even some households making up to $250,000 annually might qualify for housing subsidies under the new plan.
The average price of the Palo Alto homes that went on the market today is just over $3 million. With a 20 percent down payment and the state’s average 30-year fixed mortgage rate of 3.77 percent, the average monthly payment on those homes would be a little over $14,000, two-thirds of the monthly income for a quarter-million dollar household.
- Vacant Lot Sells For $2.7 Million [Curbed SF]
- Housing element [City of Palo Alto]
- Income by household size [SF Mayor's Office of Housing]
- Income by household size [City of Oakland]
- Palo Alto homes values [Zillow]
- $250k Per Year Could Qualify For Housing [CBS]
- Palo Alto listings [Redfin]
- Mortgage calculator [Arsidian LLC]
- Mortgage calculator [Zillow]