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ADMINISTRATIVE REVIEW DRAFT For homeowners, even moderate income households would have a difficult time in the local market. Assuming a 10 percent downpayment, a 7 percent interest rate, and a 30-year mortgage, the monthly payment on the median priced San Leandro home (including taxes and insurance) would be about $2,200 a month. Such a payment would only be considered "affordable" to a household with an annual income of $88,000 or more. Using California Housing and Community Development (HCD) income standards, the highest cost residence a four -person moderate income household could afford would sell for $275,000 to $300,000—some $50,000 below the Citywide median. Conclusions Since 1990, home prices and rents in San Leandro have increased at a faster rate than household income. Many households in the City spend more than a third of their income on housing. The number of households that can comfortably afford the median priced home in the City —and the number that can afford the median priced apartment —has declined since 1990. Programs to assist moderate income first- time buyers and lower income renters could help narrow the affordability gap. Employment Employment in a community can affect the demand for housing and can influence the type of housing that is needed. In 1990, there were 33,893 employed residents in San Leandro. About 30.5 percent were employed in service industries, including 19.2 percent in professional services (health, education, etc.). Some 18.2 percent of the City's residents were employed in retail trade, while another 6.2 percent were employed in wholesale trade. There were more than 5,100 residents, or 15.2 percent of the City's labor force, employed in manufacturing. About 5 percent of the City's residents were employed in public administration. Census data for 2000 is not yet available, but ABAG estimates that there are now 38,115 employed residents in San Leandro, an increase of 12.4 percent since 1990. Draft Projections 2002 indicates that San Leandro had about 54,200 jobs in 2000. This is a 15 percent increase over the 1990 figure. Most of the increase took place during the late 1990s, a period of very rapid job growth and low unemployment throughout the Bay Area. The number of jobs in San Leandro actually declined between 1990 and 1995, with much of the decline taking place in the retail sector. The recovery in the late 1990s was led by light manufacturing and tech sector jobs as well as increases in service and "other" employment 2 The demand for housing in the City during the late 1990s was impacted by the economic recovery, with vacancy rates dropping and prices increasing significantly. These dynamics changed again during late 2001 as the economy weakened. Between mid-2000 and November 2001, unemployment in San Leandro increased from 2.6 percent to 4.9 percent. Countywide, unemployment increased from 3.0 percent to 5.6 percent. While the prospects for the coming years remain uncertain, the gap between income and "affordable" housing costs is likely to remain significant. Current unemployment rates are comparable to the 5.3 percent reported by the 1990 Census. 2 The "Other" category includes finance, insurance, real estate, government, education, transportation, communication, and utilities jobs, as well as other miscellaneous job types. HOUSING ELEMENT 3-14 SAN LEANDRO (hNhFAL FLAN Al0