California is producing less than half the new homes it needs to meet demand, according to a new comprehensive analysis by California’s Dept. of Housing and Community Development.

California is producing less than half the new homes it needs to meet demand, according to a new comprehensive analysis by California’s Department of Housing and Community Development. (Justin Sullivan/Getty Images)

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California is producing less than half the new homes it needs to meet demand in the Golden State.

In its first comprehensive analysis since the year 2000, California’s Department of Housing and Community Development paints a bleak picture of the state’s housing landscape. While it points to some hopeful developments, the report suggests lawmakers will need to consider serious policy changes if California is going to build the projected 1.8 million new homes needed by 2025.

The Statewide Housing Assessment Report is still in draft form, and its authors are gathering public input at workshops around the state. On Monday a small group of mostly local government representatives and advocates met in Fresno to hear the report’s findings.

“About a third of all California renters today are paying more than 50 percent of their income in rent,” California Department of Housing and Community Development Director Ben Metcalf told the group.

Those paying the largest share of their income for rent and transportation aren’t concentrated in expensive cities like San Francisco — they’re largely living in rural Northern California counties and in the Central Valley.

“We’re seeing home ownership rates at the lowest level they’ve been since World War II,” Metcalf said. And, he added, while just 12 percent of Americans live in California, 22 percent of America’s homeless live here, more than in any other state.

Among the challenges driving the lack of affordable housing is unstable funding, the report finds. Federal allocations for affordable housing declined in California from 2003 to 2015. There just aren’t enough affordable rentals, and even for those who get assistance, Section 8 vouchers can’t keep pace with soaring rents.

The authors also point to regulatory hurdles and land use policies that jack up development costs and delay building.

On the upside, the report finds some positive impact from state and local bonds for affordable housing and permanent housing for the homeless, along with revenue from the state’s cap-and-trade program.

Still, the report suggests there are big consequences resulting from the failure to meet housing needs. When you factor housing in, California has the highest poverty rate in the country. Housing instability affects people’s health and kids’ academic performance. And as people move farther from jobs, long commutes increase pollution.

Overall, the report concludes the lack of housing costs the California economy almost $240 billion a year.

Once they’d heard the findings, the group in Fresno offered input. They discussed special barriers facing disabled communities and highlighted housing issues unique to vulnerable populations.

Ashley Werner, an attorney with the Leadership Council for Justice and Accountability, a nonprofit that helps low-income communities, raised concerns about undocumented immigrants.

“I think there’s a lot of different policy solutions we can put in place to protect them, and protect our whole population,” Werner said. “I think that’s especially important right now.”

Public comment continues in cities around the state until March 4. A final housing assessment is expected to be ready for policymakers to consider this summer.

Housing Crunch Exacts a Heavy Price on Californians 1 February,2017Vanessa Rancano

  • Hillary Clintub

    That’s okay. It just helps keep the cost of existing housing sky high. Keeping housing supply well below demand is great for sellers. Maybe not so much for would-be home buyers. But who cares? California needs far more pristine wilderness for elites to enjoy once or twice a year than it needs habitats for humanity, anyway. Poor folks can always sleep under all the bridges and overpasses. California has tons of those so the housing crunch isn’t really as bad as some people try to claim. Hey, California should import even more foreigners to keep housing demand well above supply! They should build more bridges and overpasses, too, to handle their increase in traffic.

  • solodoctor

    I would like to read more about the different policy solutions referred to in this report. What are they? Who would pay for them? Would these involve more density in urban centers like SF, etc?

  • Ziggy Tomcich

    Like most people, I would love to be able to own a home. But the prices are so insane, home ownership is a practical impossibility for most of us. This is terrible for our economy because it has the same effect as a huge tax that all of us pay each month in the form of hyperonflated and unaffordable housing.

    Problem is that there isn’t any solution to this housing crisis that doesn’t screw over existing home owners, while doing nothing screws over non-home owners while making the problem worse every year.

    In the end, if we continue to do nothing about our housing crisis we’ll continue to see more and more of our states wealth transferred from people who are struggling to the wealthy companies and homeowners that are making windfall profits from our misery. We’ve seen housing scarcity happen historically in cities throughout the world, and the end result always harms the economy, the communities, and the standards of living for everyone including the homeowners.

    Affordable housing should be a right. Why would anyone think that housing should be a luxury only the wealthiest people can afford?

    We should follow the Berlin model by doing a massive house build blitz, while restricting the profit incentive so that most of the costs people pay for housing actually pay for housing instead of padding someone else’s stock portfolio.

    • Hillary Clintub

      How do you figure we’d see more wealth transferred to wealthy companies if we make them trade increasingly valuable land and property for increasingly worthless cash? Do you even understand how transactions work? Don’t you realize they only work when the parties give something they value less, like money, for something they value more, like houses? If people really thought money was worth more than houses, they simply wouldn’t waste their money buying houses. And conversely, if companies thought houses were worth more than cash, they wouldn’t SELL their houses. Transactions don’t take place unless both parties to them are convinced they’re getting more than they’re giving. People wouldn’t even buy or sell groceries if that wasn’t the case. Fiat money is actually pretty worthless. People are always eager to get rid of it in return for what they DO want.

      • Ziggy Tomcich

        What does that have anything to do with the housing crisis we’re in? Do you have any solution that would help solve this housing crisis? Housing prices in California have been exploding by orders of magnitude. We haven’t been building nearly enough housing for to match the hundreds of thousands of new workers that keep moving here year after year, and so our housing just keeps getting less and less affordable, which hurts the economy as a whole. When the average person is spending over half of each paycheck to pay for hyper inflated rents in areas with hella long commutes because they can’t afford anything closer to their jobs, that’s a huge problem that affects all of us. Longer commutes, less discretionary money, and higher levels of anxiety from housing shortages all hurt the economy.

        39% of the new overpriced housing being built in SF remains empty as wealthy absentee owners buy it as part of an investment fund. Some new apartment buildings have 60% absentee owners! This is a huge problem! We have a housing crisis, a critical shortage of homes people can afford to live in, and thousands of the units that are being built aren’t even being used! At the very least, our tax laws should hugely discourage absentee homeowners because having homes vacant in a housing crisis is dumb.

        This is not a new problem. Cities all over the globe have experienced this, as did the Bay Area several times in history. When home prices get too expensive, people have less money for other things, and the entire economy suffers. When home remain affordable and plentiful, people have more money to spend, which is better for the economy.

        Berlin has successfully reversed their housing crisis by passing sensible restrictions on housing profits while doing a construction blitz to increase supply all in the effort to make sure that everyone can live in an affordable home. We need a similar multi-faceted approach to solving our own housing crisis.

  • Hillary Clintub

    We could always build those huge soviet-style dormitories all over the country. I know, we could call them “public housing projects”. I’m sure that would work to make everyone happy. Why don’t we try it?

    • Cammy

      Actually in much of Europe most people live in apartments. They are well-kept, modernized, like mini-houses. Not everyone can/should buy a house. In many ways an apartment is a blessing as you’re not responsible for the upkeep. But from what I’ve seen here, many apartments are far from modern – old musty carpet, chipped paint, really sad. We have to change the way we view housing in this country. Make communal/apartment dwelling not only appealing but affordable.

      • Hillary Clintub

        Simple…if you just double or triple the rent.

        Low rent districts aren’t generally appealing. “Appealing” costs more than low rent inhabitants are generally willing to pay.

  • jskdn

    Mass immigration into California even as the the people who pushed that agenda ignored the ethical obligation to assure a corresponding adequate housing supply has predictably resulted in what we see now. A quarter of the population of the state are immigrants and a quarter of them are currently illegal, while many others were previously. Add in their offspring and even with the decades of native net out-migration from the state, population outstripped the ability to build housing in face of the well-known opposition to that exists in so many places. I constantly wrote that it was irresponsible to promote illegal immigration, which many people did in the coastal community I lived in, without accepting the responsibility to allow the housing needed so that its cost it wouldn’t damage people’s lives. The politically liberal, morally bankrupt elites, including most especially those who worked in the media, are to blame. And almost ever person that will be quoted in the articles on this aren’t the solution but rather the cause of the problem.

    • esmi

      It is human to immigrate, so get over it. We will always have immigration, legal or illegal. Work hard, be honest, kind, learn, adapt, innovate, and accept that we are all human, and we have much to learn from each other.

  • Hillary Clintub

    USA Today is running a story titled “Americans are making big compromises to buy homes”, as if that was earth shattering news. People ALWAYS have to make compromises when they buy anything at all. It’s called “opportunity costs”. When you buy something, it always means you can’t buy something else with that money. You merely trade the opportunity to buy this for the opportunity to buy that. Why is that so hard for liberals to understand? Liberal governments seem to have the most trouble with it, too. It’s simply the age old problem of “guns or butter”, or more succinctly, infrastructure or personal welfare payments, houses or college tuitions. Even liberals can’t have everything they wish for.

  • DFinMA

    Title of article should be changed to “population crunch.”

  • esmi

    For two years I’ve been a single parent of two working full time. My kids commute to school and I to work 40 miles away. It takes us about 1:10 min to get there in the morning and up to 1:45 hours coming back (this can be over 50 hours a month). Dinner and homework are always a challenge.

    Finding affordable housing close to work and my kid’s school has been impossible. Studios and one bedroom apartments (what I am more likely to afford) will only rent to two people, whom I suspect are single couples with two incomes. Prices on Craigslist are ridiculous. A renter willing to take us wanted to charge me $1300, not for an apartment or studio, but for one small very bedroom. Also rental scams seem almost rampant.

    I am sure my story is not unique, but thought I share anyway.

    I would like to read more about housing issues and solutions to this challenge.

    • Cammy

      I am sorry for what you are going through. I often think with half of all marriages ending in divorce, it must be hellish for the parent who has to work full time and take care of their children. Never mind, it being difficult when you have a spouse there to help. And not having parents/family around is also tough. Know you are not alone. This is a real problem.

  • Cammy

    You’re lucky if you bought during prop 13. We have a neighbor who pays a couple thousand dollars a year in taxes while we pay over ten-thousand a year. It puts young people at a disadvantage in many areas they want to live/work in. Often you find people commuting an hour to where they have to work, just to find affordable housing. It’s really ridiculous.

  • SynerGenetics

    Floating Apartment Buildings in the bay.

    Benefits:
    * Earthquake proof
    * No land to purchase
    * Isn’t effected by rising sea levels. .
    * Built in shipyards, towed to docks
    * Steady employment
    * Reduce congestion
    * Can be easily recycled

Author

Vanessa Rancano

Vanessa Rancano is the Central Valley reporter for The California Report. Before joining KQED she was an NPR Kroc Fellow and a California Endowment Fellow with Latino USA. She's a graduate of the UC Berkeley Graduate School of Journalism.