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The housing predicament 

Median home prices in SLO County are higher than a median-income household can afford

Chances are, if you work a median-income job in SLO County, you can't afford any of the new homes being built on Orcutt Road—starting in the mid-$600,000s. The residences for sale in the Toscano neighborhood near the South Hills—ranging between $590,000 and $760,000—are also probably not an option.

"Normally, anyone above 120 percent of median income should be able to buy a house, and here they can't," Jerry Rioux of the SLO Housing Trust Fund told New Times. "Half of the employees in our county earn less than $30,000 a year."

The median household income in SLO County is approximately $65,500 a year. A household needs to bring in more than $110,000 a year to afford the median home price of around $552,000, according to a June 2016 housing policy report put together by the Home Builders Association of the Central Coast, the San Luis Obispo Chamber of Commerce, and the Economic Vitality Corporation of San Luis Obispo.

One big hurdle to affordability, according to Rioux, is that housing prices have increased faster than wages.

The latest data from the U.S. Bureau of Labor Statistics show that wages actually declined by 2.5 percent in SLO County from December 2015 to December 2016. Median home prices increased by 4.7 percent in that same time period, according to Zillow. The website puts the median home value in the county at $579,000 for August 2017, a 6.8 percent increase year-over-year. It projects another 2.7 percent rise over the coming year.

The June 2016 report on housing policy issues outlined a number of policies that it thought would help the county create more affordable housing opportunities, which the county Board of Supervisors approved in October 2016.

But there isn't a magic bullet that will fix the problem, according to county planning and building staff. On Sept. 26, they presented county supervisors with one of those proposed housing policy changes. The discussion revolved around fees: construction permit fees, public facility fees, agency referral fees, impact fees, affordable housing fees, all of which add up to an average of around $40,000 per residential unit.

Supervisors unanimously directed staff to come up with an ordinance that would enable builders to defer or get out of the payment of certain fees if the proposed housing is considered to be "affordable." But all five supervisors also said it wouldn't do enough to create housing.

"Is there something else that's coming, that we're missing, that's actually going to create more affordable housing as opposed to making development more affordable for developers?" 3rd District Supervisor Adam Hill said.

He again brought up a fund of money that could be dipped into as a way of subsidizing affordable housing. But the next housing policy discussion on the agenda, slated for sometime in October, will revolve around what areas of the county can be targeted for affordable development.

"We have to make it workable for the builders, that they can come in and look at the bottom line and feel like they can make at least a little bit of a profit to build these houses," said 5th District Supervisor Debbie Arnold. "Let's talk zoning; let's talk density building; let's talk [affordable] by design."

Although board members didn't necessarily come to consensus on what the "fix" to the housing issue would be, each said they agreed with their colleagues: SLO County has a lack of affordable housing for everything from extremely low-income to workforce residents.

"The median household income can afford about $340,000. So the gap is about $200,000 between what the median household income can afford and the median housing price," 2nd District Supervisor Bruce Gibson said during the Sept. 26 meeting. "To my thinking if we don't deed restrict it, we're not going to get affordable housing."

Deed restricting is exactly what People's Self-Help Housing intends to do with a 40-unit development the nonprofit has proposed for Broad Street in the city of SLO, according to President/CEO John Fowler. He said the goal is to price them properly, between $300,000 and $400,000 (for those making between 80 percent and 120 percent of median income), and keep them priced properly. And the appreciation of those homes would be tied to wages, so if wages in the area go up by 2 percent, so would the value of those homes.

"If we let it go to the market, in five years, there's no way you're going to touch this house at 80 percent of median income," Fowler said. "It's got to be deed restricted."

Fowler said he's working with employers in the area that might potentially buy into the program as a way to help employees find affordable housing. The land on Broad Street is owned by the nonprofit, and the idea is for employers to help pay for the build-out. But for now, there are still a few legal issues to hash out, and Fowler said he's working on getting the cost to employers down.

"It's a challenge to get something affordable that ties into wages and is affordable to the employer," Fowler said. "But I thought, if anyone is going to do this, it has to be a nonprofit." Δ

Reach Editor Camillia Lanham at

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