Sunday, January 8, 2017

How the "Magic Formula" for housing growth projections for Marin was achieved by ABAG.

This emergency meeting of ABAG was held on April 2, 2013 to discuss the differences in the demographic forecasts by the California Department of Finance (DOF), California  Housing and Community Development (HCD) and the Association of Bay Area Governments (ABAG).

The California Department of  Finance(DOF) has long been considered the gold standard for business and government economic forecasters since it is based upon detailed analysis of census statistics and does not pretend to know the future business trends, political developments and tax policy that can affect future growth.  It is a fact based methodology.  It is the core statistic for California.

The Calfornia Housing and Community Development  (HCD) projects housing growth in part using DOF forecasts but also include political policy initiatives into account.

The Asssociation of Bay Area Governments (ABAG) guided by chief forecaster, Stephen Levy using the data from DOF, HCD plus a "special sauce" of projections of US economic growth,  estimates of the Bay Area growth, etc and projects forty years into the future.  His forecasts are the basis for the Regional Needs Analysis (RHNA) that projects the need for affordable housing.

His results are highly controversial since they deviate from all other responsible forecasts of the above agencies and private business forecasts.  For example, Marin population has been decreasing for the last decade but ABAG is projecting wild growth not seen in decades.

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