Housing Bubble

Merced Community reacts to housing crisis

June 02, 2003

June 2, 2003—Unless critical action is taken, the American Dream of homeownership will be unreachable for most Mercedians, according to the Greenlining Institute. At the urging of Merced's community leaders, the Greenlining Institute, a 501c3 dedicated to the economic, social and political welfare of California's minority communities, studied and documented the impact of UC Merced on Merced's housing market. The resulting report entitled "The Future of Housing in Merced" was publicly released today.

The study demonstrates that unless the City, County and UC Merced take action now to build sufficient housing and to reduce pressure on the Merced housing market, most current residents will be unable to afford to buy a home in Merced, much less rent in Merced within five to ten years. Minorities, low-income families and senior citizens will be the most hurt by the housing shortage.

A growing multi-ethnic coalition of community leaders in Merced, informed by personal experience and the findings of the housing study, are reaching out to Governor Davis, UC Merced's Chancellor and local and state officials for a collective response and solution to address the pending housing crisis.

The current housing market in Merced is already unaffordable, with a less than one percent rental vacancy rate and a 45% increase in home prices over the past four years. If not addressed, the un-affordability and unavailability of housing will only worsen with the opening of UC Merced and the associated growth that is expected to double Merced County's population by 2025. Specifically, if housing construction in the City of Merced continues as it has over the past 3-5 years, then by 2025 there will be a shortfall of 2,487 single-family homes and almost 6,000 multi-family homes. This will drive up housing costs beyond the reach of most of Mercedians. Even today the average Mercedian, with the area median income of $39,000, cannot afford to buy a new home on the Merced housing market.

According to community leaders and Greenlining, it is not too late to reverse this trend toward a housing crisis. UC Merced and the City and County of Merced have multiple tools at their disposal to combat the housing shortage. These tools include private-public partnerships, reducing regulatory and environmental barriers to housing, creating incentives for higher-density housing or multi-family housing, hiring UC staff locally and utilizing in-fill and vacant properties for housing.

Other significant implications exist if insufficient housing is built in and around UC Merced. These include:

• the 20% gap in homeownership levels between minorities and whites will grow;
• leap frog and sprawling development will occur farther from campus, eating up farmland unnecessarily;
• low-wage workers, students and UC staff that cannot afford to live in high-priced Merced will be forced to commute long-hours, increasing traffic and air pollution; and
• homelessness and near-homelessness will increase, straining social services.

"UC Merced will bring many overdue benefits to Merced and the surrounding area. While we welcome the UC to our community, we must all work together to ensure that these benefits are shared by all," said Chris Tafoya, Immediate Past President of the Merced Hispanic Chamber of Commerce.

"The Hmong community has the lowest homeownership rate in Merced, with only 24% of our families owning their own homes. If prices continue to rise, then we will be completely priced out of our community. We are prepared to work with other community leaders, the City, County and UC Merced, to plan for more housing in Merced and to ensure that all people in Merced have access to the American Dream," said Houa Vang, Director of Merced Lao Family Community Inc.

Said Michael Lane, an affordable housing advocate with Self Help Enterprises, "We need a comprehensive strategy to plan for and finance affordable housing that would include the City, County, Housing Authority and UC Merced. Local government can pass inclusionary zoning ordinances, reduce the approval time and fees associated with housing construction, utilize redevelopment agencies, apply for state and federal grant funds and promote in-fill projects that have pre-existing infrastructure."

"By training local people for the many jobs UC Merced will create, we will be able to help people and alleviate the upcoming housing crisis. In the past, Merced has been successful in convening business, education and government to work with incoming businesses to recruit, train and place residents in the new positions," said Michelle Allison, Program Manager of the Merced Department of Workforce Investment and President of the Merced NAACP.

The coalition of Merced community leaders that are organizing to prevent the housing crisis and to ensure that the new UC benefits all segments of Merced's population, include representatives of: community-based organizations such as Healthy House and Planada CDC; ethnic minority advocacy groups such as the NAACP, JACL, the Merced Lao Family Community, and the Hispanic Network; small business groups such as the Hispanic Chamber of Commerce; faith-based groups such as St. Paul Lutheran Church and the Perry/ Yokley Family Development Center; affordable housing groups such as Self Help Enterprises and the Central Valley Coalition for Affordable Housing; and governmental organizations such as the Merced Community Action Agency.

Source: Greenlining Institute