Here’s where S.F. and San Jose rank among the world’s most unaffordable areas – San Francisco Chronicle

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The San Francisco metropolitan area is one of the most expensive housing markets in the world. But while it’s seen minor improvements in recent years, a report says, the San Jose area is becoming even more unaffordable.

Among nearly 100 major house markets across the world, the San Francisco metro area was the ninth most-unaffordable region in 2023. That’s according to a new report from Chapman University’s Center for Demographics and Policy, the Canada-based Frontier Centre for Public Policy, and urban policy analyst Wendall Cox. The San Jose metro area, once considered roughly as unaffordable as its neighbor, was ranked fourth.

The Demographia International Housing Affordability report looked at 94 markets across eight countries in 2023, assigning each a housing affordability rating. Markets where the median house price was no more than three times the median household income were considered “affordable,” but only a handful of regions came even close to that threshold last year.

The San Francisco metro area’s unaffordability score in 2023 was 9.7, placing it in the “impossibly unaffordable” category with a handful of other markets with scores of 9 or more. But the area’s score reflected a decline from its high in 2021, when house prices — surging during the pandemic — were nearly 12 times the median household income.

The San Jose metro area’s score in 2023 was 11.9, a slight decline from the 12.6 in 2021 but up from the 11.5 in 2022.

Those scores don’t reflect prices of homes other than houses, or other costs such as transportation, child care or taxes.

The San Jose area was the eighth most-unaffordable market in 2019, with a score of 8.5 — just above San Francisco’s score of 8.4. But the pandemic and ensuing remote work policies created a surge in demand for suburban homes, causing South Bay house prices to surge.

But even the San Jose metro area’s score was far below that of Hong Kong, which retained its rank as the most unaffordable housing market with a score of 16.7. The most affordable market among those the report analyzed was the Pittsburgh metro area, which had a score of 3.1.

Cox, who has spearheaded the report for two decades, has largely blamed the affordability crisis on land use policies that increase urban density while limiting growth at the edges of cities. He argued that unless more land is opened for development, housing costs will continue to rise.

That contention has been controversial. While some housing advocates have backed developments in rural areas — California YIMBY recently expressed support for California Forever’s proposed new Solano County city — most have focused their efforts on increasing the density of existing residential areas. Some researchers have also expressed concern that building on the outskirts of cities presents environmental and public health risks.

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