While there are many details still to be resolved regarding how the East Solano Plan will address the new city’s infrastructure needs—and those details are vitally important to the success of the plan—this analysis focuses solely on how a new city could augment the economy of Solano County and the broader Northern California Megaregion if completed.
Evaluating the Case for the East Solano Plan
Executive Summary
California, and particularly the Bay Area, used to be a place for free thinkers and risk takers. Over its history, the region has welcomed waves of people from across the U.S. and across the globe who were searching for a better life, and they have contributed to making the Bay Area one of the most vibrant and successful places in the world.
But then somehow, it all seemed to stop.
In recent decades, California has become a place more accustomed to saying “no” to new things, especially housing. In a place where the knee jerk response to any sort of change is now negative, the result has been a decline in population for the first time in the state’s recorded history.
This population decline can be traced directly back to the state’s housing affordability crisis, which is most acute in the Bay Area. From 2010 to 2019, the nine-county Bay Area added approximately 682,000 jobs; in contrast, only about 196,000 housing units were constructed across the region during the same period.
This failure to produce enough housing to keep up with the need is the hard truth that the region must address if it is to shift back to a place of opportunity.
The vision put forward by California Forever in the East Solano Plan—the concept to develop 17,500 acres halfway between Sacramento and San Francisco—stands in stark contrast to how many urbanists and planners would like to see the region grow: via infill development in existing cities. But given the scale of the challenges that the region faces related to housing affordability, traffic congestion, and economic mobility, ambitious visions like the one put forth in the East Solano Plan deserve to be fully vetted and analyzed.
Under current trends explored in this report, Solano County will continue to struggle with escalating home prices, limited wage growth to pay for those homes, and ever-longer commutes. The East Solano Plan presents an opportunity to change this trajectory by increasing both the supply of homes and the presence of quality jobs. These findings are based on our analysis of how the East Solano Plan can contribute to the solution set for two of Northern California’s most vexing challenges—housing affordability and living-wage job production. Some of our findings in these two areas are highlighted below:
Does Our Current Housing Shortage Necessitate a New, Complete City?
This section tackles one of the most common debates around the East Solano Plan’s housing goals: can development inside existing cities (i.e., infill development) solve 100% of our housing needs, or should the solution include new towns? We answer this question using historical housing production and affordability metrics for both Solano County and a broader 13-county Northern California Megaregion.
Key findings include:
• Before the 1990s, the nine-county Bay Area was constructing an average of 50,000 new housing units per year. However, in the last two decades, annual housing production dropped to around 20,000 units.
• In 1990, Solano County cities permitted 674 units of housing per 100,000 residents. In 2023, that number dropped to 315 units per 100,000 residents.
• As part of the most recent eight-year Regional Housing Needs Allocation (RHNA) cycle approved by the California Department of Housing and Community Development, which sets regional housing production targets, the Northern California Megaregion needs to produce nearly 637,000 new units of housing by 2031. The megaregion has not reached even 60% of this new goal during any of the last three cycles dating back to 1999.
• During the latest eight-year RHNA cycle, Solano County jurisdictions approved 12,337 units, which included hitting only 48% of the county’s affordable housing target for units dedicated to very-low- and low-income households.
• 54% of renters and 29% of owners in Solano County are cost burdened, meaning they spend more than 30% of their income on housing.
• As of 2023, a Solano County resident earning the county’s average income would need 101 months of earnings saved to fully purchase the county’s median home, higher than the 86 months needed for the national median, and only 13 months lower than San Francisco, where annual average wages are nearly $100,000 higher.
• The median rent for a two-bedroom apartment in Solano County increased by 24% from 2018 to 2024, compared to other counties that experienced smaller or even negative changes: +7% in Contra Costa, -4% in Alameda, and -14% in San Francisco.
The Economic Potential of a New City.
This section focuses on the economic trajectory of Solano County and explores the implications of the East Solano Plan.
Key findings include:
• Solano County has the lowest jobs-to-population ratio in the nine-county Bay Area
region: the number of jobs located in the county equates to only 39% of the county’s
adult population, compared to 102% in San Francisco.
• Despite comprising 6% of the regional population, Solano County only holds 3.5% of regional jobs.
• Solano County’s unemployment rate stands at 4.9% as of April 2024, which is a full percentage point higher than the Bay Area’s overall rate of 3.9%.
• Despite similar median incomes in the early 2000s, Solano County wage growth has lagged peer counties.
• The East Solano Plan is proposing a jobs guarantee that adds 15,000 new jobs to the county in which workers earn the equivalent of 125% of the county’s average weekly wage. This level of employment growth could increase Solano County’s employment in high-earning sectors by 53%.