The Bay Area, already one of the most difficult and expensive places in the nation to build new homes, is being buffeted by a turbulent economy that’s creating even more challenges for a region reeling from a housing affordability crisis.
The headwinds are plenty: Higher interest rates for construction loans. Rising labor and material costs. Slowing demand from homebuyers squeezed by more expensive mortgages. And fears of a looming recession as cities continue to recover from the pandemic.
That’s all raising the specter of a widespread housing construction downturn.
Abram Diaz, policy director with the Non-Profit Housing Association of Northern California, said the prospect of even greater cuts during a recession is one reason why advocates and officials are working toward bringing an unprecedented Bay Area affordable housing bond worth up to $20 billion before local voters in 2024.
“In the tough times, that’s where we’ll see how committed we are to addressing this crisis,” Diaz said.
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