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3. Homeless Redwood City has no good measures of the degree of home- lessness. The City has, however, purchased a twelve unit apartment building to be used as a Family Living Center. Families will be able to stay for approximately 30 days. It is clear that the need far exceeds the capacity of this twelve unit facility. Market Constraints The price of housing has been rising at a greater rate than family inco~e, thereby decreasing the opportunities for home ownership to a growing percentage of the public. Contributing factors include the inflating costs of land, material, labor and financing, as well as fees charged for services by the private and public sectors. It appears that despite innovations in materials and financing, the cost of housing will continue to outstrip increases in wages. This trend is likely to be exaggerated in Redwood City because of the natural and cultural attributes of San Mateo County, which make the city a pleasant place to live. Labor costs can bE a factor affecting the OVErall cost of ne~ housing and could indirectly affect the cost of manufactured housing as WEll. Contracts in somE areas preclude the use of Union labor to assemble manufactured housing. Also affecting the supply of housing and the construction rate, and thus indirectly the cost of housing, is the limited number of units which have been built in Redwood City out of the number approved. High financing costs caused both short-term and indefinite delays in the construction of approved housing. Most of the forces affEcting housing in Redwood City arE controlled by ever,ts at the regiorlal state or federal levels, rather than by local deci:ion makers. Alsc., nothing car, alter the fact that the comrr.unity is, and ~ill continue to be, an attractive place to live. The follo~ing is an analysis of current market constraints on housing, and the City's efforts to limit these constraints. While increases in house prices have slowed in the past two years, house values and monthly housing payments have increased by 200\ since 1975. Between 1970 and 1980 lIlediar. household income increased 2.8 times, ~h1le mean house values increased 3.5 times. The following chart sho~s the income necessary to afford the average cost home in Red~ood City, based upon the following assumptions: . 1. Bouse payment not to exceed 40\ of income 2. Interest rate of 10.5\ fixed for 30 years 3. Loan to value ratio of 80\. EXB l'~"_5 12