Napa Hotel Housing Impact Analysis

City of Napa, CA

The City of Napa has a significant number of planned and proposed hotels in the development pipeline, which could add an estimated 2,112 hotel rooms to the City’s inventory and support an increase in hotel employment in the City.  Although demand for hotel rooms in the Napa Valley Region remains strong, hotel operators have ongoing concerns that a lack of housing supply affordable to the hotel workforce will increase pressure on an already tight hotel labor market. 

In order to quantify the extent to which the region’s hotel workers need housing opportunities, and the availability of new hotel workers, the City engaged BAE to evaluate the challenges associated with attracting a hotel labor pool within the high-cost housing market in the Napa region and the wider Bay Area region, as well as the extent to which the housing market in Napa and the surrounding area may be able to absorb the new employee households that the new hotels will generate.

BAE estimated the number of hotel worker households projected by hotel type, evaluated hotel worker household incomes by hotel worker occupation, and compared household incomes to the Area Median Income to determine income affordability levels. BAE then evaluated the commute patterns of Napa hotel workers to determine where workers live, assessed local labor force participation and unemployment rates to determine whether existing residents could fill new jobs, and determined the number of new worker households at each affordability level that would need to find housing in order to fill new Napa hotel jobs.

Finally, BAE used median home prices and rents to determine the supply of existing and proposed housing that would be available for new households, and compared those numbers to hotel worker households to determine the housing shortfall that would need to be addressed to attract new hotel workers to fill jobs. This analysis found that there will be a worker shortage in the Napa Valley hotel industry going forward, and that affordable housing will be one critical factor of many to attracting new workers.

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