Housing is too often treated as a social issue when it is, in fact, essential economic infrastructure. Without homes that working families can afford, businesses struggle to hire, hospitals cannot recruit nurses, schools lose teachers, agricultural employers face workforce shortages, and young people are forced to leave the communities they want to call home.
For too many tri-county residents, housing costs stretch budgets — keeping households in survival mode, one crisis away from financial disaster.
Housing has become one of the defining economic challenges of our time. In the Monterey Bay region, the average renter spends 33% to 60% or more of their gross income on housing. The federal standard defines a “rent-burdened” household as one spending over 30% of its income on rent. In Monterey County, the average monthly rent as of May 31 was $3,212, according to data from Zillow. Santa Cruz County rents are even more extreme, averaging $3,599, and even in San Benito County, average monthly rents are $2,914 — the cheapest in the tri-county region, but far above the U.S. average rent of $1,951.
According to the National Low Income Housing Coalition, the affordability gap — the chasm between income and the cost of rent — keeps growing, and for many low-wage workers and people living on fixed incomes, it’s becoming nearly impossible to reasonably afford a quality, safe place to call home.
The root of those housing cost increases is a supply issue: We aren’t building enough homes to meet demand. As a region, we need more housing, and that means housing of all types near job centers and existing infrastructure.
All housing developers face extraordinary construction costs and permitting challenges. For nonprofit developers aiming to bring below-market-rate homes or subsidized housing, the path forward can be particularly risky with complicated layers of financing that can drag on for years and balloon costs with no guarantees of moving forward.
That reality became clear in the Monterey Bay region more than a decade ago. At the Monterey Bay Economic Partnership (MBEP), we recognized that solving the housing crisis required more than advocating for better policies. It required creating new financial tools that could help move affordable housing from concept to construction.
That vision led to the Monterey Bay Housing Trust, a revolving loan fund established by MBEP in partnership with Housing Trust Silicon Valley. The Trust provides flexible, early-stage financing for affordable housing projects across Monterey, Santa Cruz, and San Benito counties—capital that traditional lenders often cannot provide. As loans are repaid, the funds are reinvested into the next project, creating a sustainable source of financing for future housing.
The results demonstrate what is possible when regions invest in solutions instead of simply describing problems.
Beginning with an initial investment of $1.5 million, the Monterey Bay Housing Trust has helped deploy more than $54 million in financing, supporting approximately 1,200 new and preserved affordable homes.
The return on investment extends far beyond housing. Every new development creates construction jobs, supports local businesses, strengthens workforce retention, reduces traffic congestion, lowers greenhouse gas emissions, and makes our communities more economically competitive.
Just as importantly, the Monterey Bay Housing Trust demonstrates the power of regional collaboration. Public agencies, financial institutions, employers, philanthropies, and community organizations came together around a shared goal and created a financing model that has since inspired similar efforts elsewhere in California, including Sonoma County Housing Fund.
We cannot expect to grow our healthcare workforce, expand advanced manufacturing, strengthen agriculture, or attract emerging industries if the people who power those sectors cannot afford to live in the communities they serve.
California doesn’t lack innovative ideas. What we need is the collective will to invest and scale the ones that work.
There are many ways to engage and lean in to be part of the solution. Our region is working hard to build all types of housing that is affordable and attainable, including the missing middle. That includes engaging employers, policy advocacy to streamline permitting, funding strategies such as the Veterans and Affordable Housing Bond Act on the November ballot which if approved by a majority of statewide voters will create over 40,000 new deeply affordable homes and many more homeowners. This state investment will be felt in our Monterey Bay with more housing for farmworkers, educators, and many others. For a stronger workforce, healthier communities, and a more competitive economy, we must invest in housing with the same urgency that we invest in transportation, broadband, energy, and water.
Because the foundation of every thriving economy isn’t just the jobs we create—it’s whether the people doing those jobs can afford to call that place home.