Healdsburg Keeps Building Homes. Very Few of Them Compete With a Resale House.

In 2025, the City of Healdsburg issued building permits for 121 new homes. Of those, 116 were exempt from the city's Growth Management Ordinance: 106 affordable units, nine accessory dwelling units and one replacement home. Only five went through the growth-management allocation pool, and all five were new single-family houses.

That ratio shapes the Healdsburg market more than any median price. The town has a pipeline of construction projects, and you can see cranes and fresh framing. Almost none of that new housing will ever compete with the house a buyer is weighing on Matheson Street or in the neighborhoods off Healdsburg Avenue. The supply that sets the price of a market-rate home here barely grows, and the mechanism holding it in place is still running.

The 2025 Ledger, Line by Line

The breakdown below comes from the city's own annual Growth Management Program report, which went to the City Council in March 2026.

Roughly 96 percent of the year's new housing was built in categories that a typical buyer of a market-rate home cannot buy on the open market. Affordable units carry income restrictions, and ADUs sit on someone else's lot. The five Category A houses were the only new homes that year entering the same pool as the resale inventory.

How the Allocation Pool Works

According to a 2024 city staff report, Healdsburg is one of the few California jurisdictions allowed under state law to keep a growth management ordinance. The same report put it bluntly: the GMO "has severely constrained housing growth," and the resulting shortage "has contributed to skyrocketing housing prices."

The city's GMO Policies and Procedures, adopted May 4, 2020, set up the structure:

• Measure M pool: an average of 30 units a year, capped at 90 per three-year cycle. This is the market-rate pool.
• Category A: projects of four or fewer units, with allocations granted first-come, first-served when a building permit is issued.
• Category B: projects of five or more units, with allocations issued after final discretionary approval.
• Category C: a separate Measure P/H pool averaging 50 units a year, for multifamily projects of up to 50 units, deed-restricted for households earning up to 160 percent of county median income.

The exemptions cover affordable housing, ADUs, replacement units, senior housing, nursing homes and residential care facilities. That list explains the 2025 ledger. Development flows to the categories the ordinance does not count.

The current cycle, Cycle 9, began in 2025 and runs through December 31, 2027. Forty-five Category B allocations are reserved for the Mill District project, which leaves 15 for any other project of five or more units through the end of 2027. The city's report names that scarcity as an ongoing problem.

Allocations can also be carried forward. Under the development agreement with Replay Healdsburg LLC, allocations that would otherwise expire can be reassigned to the Mill District on request. At the end of 2024, that happened to 10 expiring Saggio Hills allocations and 19 unused Category A allocations, all now set to expire at the end of 2027 if unused. An earlier batch of 14 allocations, reassigned in 2023, expired unused on December 31, 2025. On paper, the small market-rate pool keeps getting smaller when allocations go unused.

The Middle Tier That Never Arrived

Healdsburg has tried twice to loosen the cap. In 2018, voters approved Measure P to create extra allocations for middle-income housing, which the city's Measure P explainer describes as homes for households earning 121 to 160 percent of county median income. According to the 2024 staff report, its deed restrictions and income verification requirements "have proven to be a significant obstacle to housing financing and production," and in the six years after it passed, no new middle-income multifamily units were built.

The second attempt was Measure O on the November 2024 ballot. It would have exempted multifamily housing, though not single-family homes, in three areas: the Healdsburg Avenue North corridor, the Central Healdsburg Avenue Plan area and the South Entry Area. The Press Democrat reported on election night that the measure was failing with 41 percent support, and its backers conceded.

So the local route to more market-rate supply has closed twice. Housing is still getting built, through a different route.

How Projects Move Without an Allocation

State housing law now does much of what the local ballot did not. On a Monday night in early October, the City Council voted 4-0 to deny an appeal of The Hudson, a Gallaher Signature Living project on Hudson Street. The Healdsburg Tribune reported that it includes 67 senior apartments, six memory care units and 10 affordable units. The August planning staff report described the plan at 359 Hudson St., the former lumber site, as using a 50 percent state density bonus over a base of 51 units, and found the project exempt from GMO allocations.

The Tribune noted that much of the local frustration was about how little say the city had, because state law allows density bonuses and waivers from local requirements. One change did come out of the review. The affordable units grew from about 380 to about 700 square feet: 10 one-bedroom homes with one and a half baths and a garage below.

Smaller lots are now on the same track. At its February 17 meeting, the Council adopted two ordinances implementing SB 9 and SB 684/SB 1123, according to the Healdsburg Tribune. The staff report for that meeting says units created under those laws would be exempt from the GMO. As Patch summarized the proposal, it allows two units on a single-family lot, urban lot splits with up to two units per lot, a 1,750-square-foot maximum unit size, and three years of owner occupancy for lot splits. City staff told the Tribune they do not expect a rush of new projects.

The larger pipeline follows the same pattern. The city's 2026 major project list shows Burbank Housing's 58-unit affordable project at 155 Dry Creek Road with a building permit issued, 53 affordable homes at North Village Parcel 4 on Boxheart Drive, and 118 affordable units at Saggio Hills on Parkland Farms Boulevard. The list is updated quarterly, so those statuses may have moved.

These projects add real housing to Healdsburg. They do not add listings for an unrestricted buyer shopping for a single-family house.

What That Does to a Resale Price This Fall

If new supply bypasses the market-rate pool, the resale market has to absorb demand by itself. A Healdsburg Tribune market column, drawing on BAREIS MLS data for July through September 2026, shows how that played out. In September, 28 Healdsburg homes went under contract, compared with 19 a year earlier. The $1 million to $3 million band drove that increase, with 17 contracts against six in September 2025. In that band, average days on market fell from 82 to 66 over the quarter, and sellers received about 95 percent of original list price. Healdsburg's price per square foot rose about 5 percent this year to more than $770, among the highest in Sonoma County.

Under $1 million, the Tribune's figures showed about five months of supply this summer, with sellers accepting roughly 93 percent of original asking price. Countywide, BAREIS reported 356 Sonoma County residential sales in September 2026 at a $779,500 median, up from a $749,000 median on 413 sales in August.

Read through the GMO, these numbers fit together. Softness at the entry level reflects financing-sensitive buyers, and it is the kind of condition a buyer can negotiate in this fall, with time for a second showing and full inspections. Strength in the move-up band reflects what the ordinance makes scarce. A detached, unrestricted house in town comes almost entirely from existing stock, and the city added five new ones in 2025. When you compare Healdsburg with towns where market-rate construction can respond to demand, the price per square foot here is paying for a supply curve that barely moves.

Questions Buyers Ask About the GMO

Does the GMO affect a home that already exists? The allocation system governs new dwelling units. A buyer of an existing house is buying outside the cap, which is why existing stock carries so much of the market-rate supply.

Could I add an ADU or split a lot after buying? ADUs are on the GMO's exemption list, and the Council's February 2026 ordinances apply SB 9 lot splits and two-unit development locally, with owner-occupancy and size limits. Whether a particular parcel qualifies depends on its zoning and site conditions, which the city's planning department can confirm.

Is a change to the GMO on the ballot? None has followed Measure O. The city's Housing Element still names the GMO as a constraint on meeting regional housing targets.

This post is general information about local rules and market conditions, not legal, tax or financial advice. Before acting on any rule described here, confirm how it applies to your property with the appropriate attorney, planner or advisor.

When a town's market-rate supply grows by a handful of homes a year, valuing a Healdsburg property means knowing which pool its comparables came from and what a parcel could legally become. If you are weighing a purchase or sale in Healdsburg and want that analysis done carefully and discreetly, Ginger Martin + Co. would be glad to help. Get In Touch.