Housing Prices in Santa Barbara Alarm Official

With housing prices on Santa Barbara County’s south coast rising faster than any other region of the state, U.S. Rep. Lois Capps said the federal government needs to play a stronger role in keeping the area from becoming an exclusive enclave for the rich.

While stressing that the problem is largely an issue for state and local governments, Capps said changes are needed in the federal government’s approach to housing assistance programs. She said federal housing programs need a greater recognition of middle-class problems.

“I would support instituting federal programs that recognize a continuum of needs, including those of middle- and moderate-income people living in high-cost areas such as Santa Barbara, where the housing costs are quickly driving them from our community,” she said.

The Santa Barbara Democrat first spoke out on the housing issue in a statement in May. She restated her position Monday following the release of figures by the California Assn. of Realtors showing that median home prices in the southern half of Santa Barbara County hit $900,000 in May, an increase of $75,000 in just one month.

Santa Barbara’s south coast stretches 25 miles from Carpinteria to Goleta. Between those communities are the super-rich areas of Montecito and Hope Ranch, along with the city of Santa Barbara itself.

May’s 9.1% increase was higher than in any other region of the state. And the median home price of $900,000 dwarfed both the statewide median of $369,290 and the Los Angeles region median of $332,210, according to the realty association.

Santa Barbara County leaders increasingly have expressed concern that rising home prices are driving out the middle class.

Capps suggested that Congress act to provide more tax credits for affordable housing development and to increase loan limits to help middle-class home buyers. But there is little chance of that happening at a time when federal housing programs for the “poorest of the poor” are being cut, she said. “In this political climate, it would be extremely difficult to gain support in Congress for shifting any of the remaining housing funding away from helping the poorest families,” she added.

One expert on the state’s housing market, Mark Schneipp, director of the California Economic Forecast in Santa Barbara, said another clear need at the federal level is “some new definition of what affordability is” in Santa Barbara and other cities with fast-rising housing costs. Federal housing guidelines typically reserve affordable housing for families earning 80% or less of the area’s median income. In Santa Barbara, that is about $47,000 for a family of four. Families with significantly higher incomes are not eligible for federal help.

“People here who are making $100,000 to $200,000 a year can’t afford to live here now, so something is clearly out of whack,” he said. “But the reality is that government can’t really do much here except rezone the south coast wherever possible” to open up more land for housing tracts.

The May jump to $900,000 in the south coast area was not totally unexpected, Schneipp said, adding that it had “been stuck at about $825,000” for months.

Already, houses in Santa Barbara priced at the $1-million mark often sell in a day or two, local real estate brokers say. For that, a buyer can expect a home of 1,800 square feet or more, maybe three bedrooms, and hardwood floors.

“There are all kinds of reasons for what is going on, but one of the most important is that the baby boomers have hit the high-income bracket,” Schneipp said. “Baby boomers are 38 to 57 now, the largest generation ever in the history of the universe. And that coincides with the fact that the highest income years for American wage earners are the years from 46 to 54.

“The biggest population group is also the highest wage-earning group,” Schneipp said. “In an area where housing is in short supply, the result is what we are seeing here.”