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This article, California housing shortage, has recently been created via the Articles for creation process. Please check to see if the reviewer has accidentally left this template after accepting the draft and take appropriate action as necessary.
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Comment: This is much more of an WP:NOTESSAY than an article. Please do not include WP:OR in an article. Lee Vilenski(talk) 10:30, 8 January 2018 (UTC)
Since about 1970, the cost of homes in California has increased more rapidly than the cost of homes in the rest of the nation due to an extended and increasing housing shortage.[1] In 2015, at $440,000, the median price of a home in California was about 2.5 times (150% greater than) the median price of a home in the U.S. as a whole, and more expensive than a home in any state other than Hawaii.[2][3] By 2017, the median home price had risen 13% to $497,000, a price that only one out of three Californians could afford.[4][5]
In the coastal urban areas, the imbalance between supply and demand of housing is much greater than the inland areas, as is reflected in the median prices of homes in those respective markets: $1.3M in San Francisco, $1M in San Jose, and $600k in Los Angeles, while only $250k in Fresno.[6][7][8] In the rental market, California now has the lowest vacancy rate the state has ever seen, at 3.6%[9]; and while the median rent throughout the state for a two-bedroom apartment is $2,400, the median rent in coastal urban areas is even higher, surpassing $4,000 per month in San Francisco.[10]
The fundamental cause of the housing shortage is the imbalance between demand and supply; a result of strong economic growth creating hundreds of thousands of new jobs (which increases demand for housing) and the greater regulatory, zoning, and permitting requirements on the creation of new housing units in California relative to other states, (which limits supply).[11][12][13] For example, from 2012 to 2017, San Francisco metropolitan area cities added 400,000 new jobs, but only issued 60,000 permits for new housing units.[14]
When the cost of housing is factored into the poverty rate, as the Census Bureau now does in its releases of the "Supplemental Poverty Measure,"[15] California's poverty rate lists as the highest in the nation, (and has since 2011, when the Census Bureau first started releasing poverty by this measure) currently at 20.4%, or just over 1 in 5 people.[16][17]
The California Legislative Analyst's Office 2015 report "California's High Housing Costs - Causes and Consequences" estimates that for the state to have kept housing prices no more than 80% higher than the median for the U.S. as a whole (the price differential which existed in 1980, as opposed to the >150% differential which exists today), California would have needed to add approximately 210,000 new housing units each year over the past three decades (1980-2010), rather than the 120,000 / year which were built. Their midpoint estimate of the underbuilding for the last three decades is 90,000 units per year, an estimated shortage of 2.7M housing units (20%) by 2010.[23]
Since 2010, the state's construction of new housing units has averaged well below 90,000 units per year.[24] It took a drastic drop after the 2008 Great Recession, but has increased to about 90,000 / year in 2016.[24]
Causes
The fundamental reason for the shortage is that far less housing units have been built in the coastal areas relative to demand, resulting in higher prices for housing and spillover to the inland areas.[25] The specific causes for this under-building are many and varied, including the following:
Community resistance to new housing. People who already live in an area often do not want the increased people and traffic that development brings, and they have the voting power to try to keep newcomers out.[26][27]
Environmental laws, especially the California Environmental Quality Act (CEQA), which requires local governments to conduct environmental impact assessments prior to allowing new development, as well as granting those opposed the ability to continue to challenge a development even after a local government has approved the project.[28] As the Orange County Register notes:
CEQA requires all development projects to complete environmental impact reports (intended to explore the development’s effect on local plants and animals) prior to final project approval by city hall. A clean report, however, can be challenged in a lawsuit by anyone concerned, which immediately halts development. Labor unions and other advocacy organizations discovered that they could use frivolous CEQA challenges to “greenmail” businesses and further their own policy agendas.[29]
Tax structures: cities are incentivized to build commercial properties from which they can collect sales and business tax revenue, and opt against residential building, because the costs associated with service delivery (public safety, roads, parks, etc.) to residents are greater than the revenue cities receive from residential housing.[30] For example, the City of San Jose denied an affordable housing project for teachers, because it would have converted commercial land to residential use.[31]
High land cost and low density development, with very small increases in housing density, which in turn keep land prices high.[32]
Higher cost of construction due to government fees, labor, and materials:
Greater government-imposed development fees for building a single-family home than in the rest of the country. (The CA LAO reported it to be 266% greater, $22k vs. $6k).[33] For example, the developer planning to redevelop the site of a former Naval Hospital in Oakland with a residential community of 935 homes will be paying $20M (= $21k / home) in fees to the City of Oakland's affordable housing fund.[34]
Higher cost of labor, because of both prevailing wage laws and that often projects are only approved if union labor is used. (Estimated at 20% more by the CA LAO.)[35][29][36]
Higher material costs, due to building codes and standards requiring better quality materials and higher energy efficiency.[37]
Effects
When the cost of housing is factored into the poverty rate, as the Census Bureau now does in its releases of the "Supplemental Poverty Measure,"[38] California's poverty rate lists as the highest in the nation, (and has since 2011, when the Census Bureau first started releasing poverty by this measure) currently at 20.4%, or just over 1 in 5 people.[39][40] The Public Policy Institute of California estimates that if the housing costs in California matched those for the nation overall, California's poverty rate would instead be 14%.[41]
Responses
On the final day of the 2017 legislative session, the California legislature approved and Governor Brown signed fifteen separate bills aimed at starting to address some of the driving factors of the shortage, such as requiring cities to allow developments that meet their zoning and general plans, and allowing microapartments as small as 150 sq. ft.[42]
As a way to rapidly create inexpensive housing, a Bay-Area startup company converts 8' x 20' shipping containers into homes for as little as $8,000, though due to expensive ($3,000 - $5,000 for a permit) and restrictive zoning in many cities, has found it hard to find locations that will allow the homes.[43]
See also
References
^ Taylor, Mac (2015-03-17). California's High Housing Costs - Causes and Consequences(PDF) (Report). California Legislative Analysts Office. p. 3. Archived from the original(PDF) on 2015-04-06. Retrieved 2017-10-26. Housing in California has long been more expensive than most of the rest of the country. Beginning in about 1970, however, the gap between California's home prices and those in the rest country started to widen. Between 1970 and 1980, California home prices went from 30 percent above U.S. levels to more than 80 percent higher. This trend has continued. ... Yet not enough housing exists in the state's major coastal communities to accommodate all of the households that want to live there. ... A shortage of housing...((cite report)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Taylor, Mac (2015-03-17). California's High Housing Costs - Causes and Consequences(PDF) (Report). California Legislative Analysts Office. pp. 3, 5. Archived from the original(PDF) on 2015-04-06. Retrieved 2017-10-26. Today, an average California home costs $440,000, about two-and-a-half times the average national home price ($180,000). ... Among all states, only Hawaii is more expensive, on average, than California.((cite report)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Levin, Matt (2017-08-28). "California's housing crisis – it's even worse than you think". The San Jose Mercury News. Archived from the original on 2017-08-30. Retrieved 2017-11-02. The median California home is now priced 2.5 times higher than the median national home. As of 2015, the typical California home costs $437,000, easily beating the likes of Massachusetts or New York (only Hawaii had more expensive houses).((cite news)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Fagan, Kevin; Graham, Alison (2017-09-08). "California's homelessness crisis expands to country". San Francisco Chronicle. Archived from the original on 2017-09-11. Retrieved 2017-12-12. With the county's rental vacancy rate hovering around 1 percent — California's is 3.6 percent, an all-time low for the state —((cite news)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Levin, Matt (2017-08-28). "California's housing crisis – it's even worse than you think". The San Jose Mercury News. Archived from the original on 2017-08-30. Retrieved 2017-11-02. Across the state, the median rental price for a two-bedroom apartment is about $2,400, the third highest in the country. But statewide figures water down how absurd the situation is getting in urban coastal markets, where the vast majority of Californians live. The median rent for a two-bedroom apartment in San Francisco reached more than $4,000 this year.((cite news)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Cutler, Kim-Mai (Apr 14, 2014). "How Burrowing Owls Lead To Vomiting Anarchists (Or SF's Housing Crisis Explained)". TechCrunch. Archived from the original on 2014-04-30. Retrieved 2017-12-11. ...in most parts of the country, home prices are at or near the raw costs of construction. But in places where zoning regulations create artificial limits on home production, the final prices to home buyers jump far above construction costs. In the 1980s and 1990s, they found that virtually all of San Francisco's home prices were at least 140 percent above base construction costs.((cite news)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Taylor, Mac (2015-03-17). California's High Housing Costs - Causes and Consequences(PDF) (Report). California Legislative Analysts Office. pp. 14, 17. Archived from the original(PDF) on 2015-04-06. Retrieved 2017-10-26. Additionally, development fees—charges levied on builders as a condition of development—are higher in California than the rest of the country. A 2012 national survey found that the average development fee levied by California local governments (excluding water-related fees) was just over $22,000 per single-family home compared with about $6,000 per single-family home in the rest of the country. ... One survey of city and county officials nationwide suggests that communities in California's coastal metros take about two and a half months longer, on average, to issue a building permit than in a typical California inland community or the typical U.S. metro (seven months compared to four and a half months).((cite report)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Nagourney, Adam; Dougherty, Conor (2017-07-17). "The Cost of a Hot Economy in California: A Severe Housing Crisis". The New York Times Company. Archived from the original on 2017-08-11. Retrieved 2017-11-02. For California, this crisis is a price of this state's economic boom. Tax revenue is up and unemployment is down. But the churning economy has run up against 30 years of resistance to the kind of development experts say is urgently needed. California has always been a desirable place to live and over the decades has gone through periodic spasms of high housing costs, but officials say the combination of a booming economy and the lack of construction of homes and apartments have combined to make this the worst housing crisis here in memory.((cite news)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Clark, Patrick (2017-06-23). "Why Can't They Build More Homes Where the Jobs Are?". Bloomberg. Archived from the original on 2017-08-28. Retrieved 2017-12-01. San Francisco's metropolitan area added 373,000 net new jobs in the last five years—but issued permits for only 58,000 units of new housing. The lack of new construction has exacerbated housing costs in the Bay Area, making the San Francisco metro among the cruelest markets in the U.S. Over the same period, Houston added 346,000 jobs and permitted 260,000 new dwellings, five times as many units per new job as San Francisco.((cite news)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^"Supplemental Poverty Measure". United States Census Bureau. 2017-03-16. Retrieved 2018-01-04. The official poverty measure, which has been in use since the 1960s, estimates poverty rates by looking at a family's or an individual's cash income. The new measure is a more complex statistic incorporating additional items such as tax payments and work expenses in its family resource estimates. Thresholds used in the new measure are derived from Consumer Expenditure Survey expenditure data on basic necessities (food, shelter, clothing and utilities) and are adjusted for geographic differences in the cost of housing.((cite web)): Cite has empty unknown parameter: |dead-url= (help)
^ Levin, Matt (2017-09-28). "How sky-high housing costs make California the poorest state". Bay Area News Group. Archived from the original on 2017-09-28. Retrieved 2017-11-09. When the cost of living is factored in, the Golden State has the highest poverty rate in the country. ... California has been the poorest state in the nation under the vastly more sophisticated "supplemental" poverty measure since the alternative statistic was created... The Census uses data dating to 2011 to calculate the cost of living, so even the improved poverty rate could be underestimating how big a drain housing has been on California's poor.((cite news)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^Economy at a Glance - West Virginia (Report). United States Department of Labor - Bureau of Labor Statistics. 2017-11-04. Retrieved 2017-11-04.
^ Taylor, Mac (2015-03-17). California's High Housing Costs - Causes and Consequences(PDF) (Report). California Legislative Analysts Office. p. 21. Archived from the original(PDF) on 2015-04-06. Retrieved 2017-10-26. Between 1980 and 2010, California's major metros added about 120,000 new housing units each year. Our analysis suggests that between 190,000 units per year and 230,000 units per year were needed to keep California's housing cost growth in line with cost escalations elsewhere in the U.S. (Our midpoint estimate—which represents our single best guess at California's housing need—is slightly above 210,000 units per year.((cite report)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Taylor, Mac (2015-03-17). California's High Housing Costs - Causes and Consequences(PDF) (Report). California Legislative Analysts Office. p. 3. Archived from the original(PDF) on 2015-04-06. Retrieved 2017-10-26. California is a desirable place to live. Yet not enough housing exists in the state's major coastal communities to accommodate all of the households that want to live there. In these areas, community resistance to housing, environmental policies, lack of fiscal incentives for local governments to approve housing, and limited land constrains new housing construction. A shortage of housing along California's coast means households wishing to live there compete for limited housing. This competition bids up home prices and rents. Some people who find California's coast unaffordable turn instead to California's inland communities, causing prices there to rise as well.((cite report)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Taylor, Mac (2015-03-17). California's High Housing Costs - Causes and Consequences(PDF) (Report). California Legislative Analysts Office. p. 15. Archived from the original(PDF) on 2015-04-06. Retrieved 2017-10-26. Community Resistance to New Housing. Local communities make most decisions about housing development. Because of the importance of cities and counties in determining development patterns, how local residents feel about new housing is important. When residents are concerned about new housing, they can use the community's land use authority to slow or stop housing from being built or require it to be built at lower densities.((cite report)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Dougherty, Conor (2017-12-01). "The Great American Single-Family Home Problem". The New York Times Company. Archived from the original on 2017-12-04. Retrieved 2017-12-05. Around the country, many fast-growing metropolitan areas are facing a brutal shortage of affordable places to live, leading to gentrification, homelessness, even disease. As cities struggle to keep up with demand, they have remade their skylines with condominium and apartment towers — but single-family neighborhoods, where low-density living is treated as sacrosanct, have rarely been part of the equation.((cite news)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Taylor, Mac (2015-03-17). California's High Housing Costs - Causes and Consequences(PDF) (Report). California Legislative Analysts Office. p. 15. Archived from the original(PDF) on 2015-04-06. Retrieved 2017-10-26. Environmental Reviews Can Be Used to Stop or Limit Housing Development. The California Environmental Quality Act (CEQA) requires local governments to conduct a detailed review of the potential environmental effects of new housing construction (and most other types of development) prior to approving it. The information in these reports sometimes results in the city or county denying proposals to develop housing or approving fewer housing units than the developer proposed. In addition, CEQA's complicated procedural requirements give development opponents significant opportunities to continue challenging housing projects after local governments have approved them.((cite report)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Taylor, Mac (2015-03-17). California's High Housing Costs - Causes and Consequences(PDF) (Report). California Legislative Analysts Office. p. 15. Archived from the original(PDF) on 2015-04-06. Retrieved 2017-10-26. Local Finance Structure Favors Nonresidential Development. California's local government finance structure typically gives cities and counties greater fiscal incentives to approve nonresidential development or lower density housing development. Consequently, many cities and counties have oriented their land use planning and approval processes disproportionately towards these types of developments.((cite report)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Giwargis, Ramona (2017-05-08). "Sarah Chaffin wants to build affordable teacher housing using her own money, but City Hall says no". Bay Area News Group. Archived from the original on 2017-05-17. Retrieved 2017-11-04. San Jose is largely considered "jobs poor" — a bedroom community with more housing than jobs. The imbalance costs tax dollars because businesses generally pay much more in taxes than they require in city services, and residents leave the city during the day for work.((cite news)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Taylor, Mac (2015-03-17). California's High Housing Costs - Causes and Consequences(PDF) (Report). California Legislative Analysts Office. p. 12. Archived from the original(PDF) on 2015-04-06. Retrieved 2017-10-26. High Land Costs and Low Density Development Make Housing Expensive ... While developers typically respond to high land costs by building more dense housing, this response appears to be somewhat limited in most of California's coastal metros. As a result, high land costs in these areas have translated more directly into higher housing costs.((cite report)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Taylor, Mac (2015-03-17). California's High Housing Costs - Causes and Consequences(PDF) (Report). California Legislative Analysts Office. p. 14. Archived from the original(PDF) on 2015-04-06. Retrieved 2017-10-26. Additionally, development fees—charges levied on builders as a condition of development—are higher in California than the rest of the country. A 2012 national survey found that the average development fee levied by California local governments (excluding water-related fees) was just over $22,000 per single-family home compared with about $6,000 per single-family home in the rest of the country.((cite report)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Veklerov, Kimberly (2016-06-24). "Massive development may come to long-blighted East Oakland site". The San Francisco Chronicle. Archived from the original on 2017-06-24. Retrieved 2017-11-10. And though SunCal would eventually pay almost $20 million in fees to a city affordable housing fund, all of the 935 homes would be sold at market rate,...((cite news)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Taylor, Mac (2015-03-17). California's High Housing Costs - Causes and Consequences(PDF) (Report). California Legislative Analysts Office. p. 13. Archived from the original(PDF) on 2015-04-06. Retrieved 2017-10-26. Construction labor is about 20 percent more expensive in California metros than in the rest of the country.((cite report)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Li, Roland (2016-10-26). "Housing development's latest enemy: Bay Area construction unions". San Francisco Business Times. Archived from the original on 2017-06-29. Retrieved 2018-01-07. Angered by some developers' attempts to use cheaper non-union labor, Bay Area construction unions have filed appeals challenging projects' approvals and allied themselves with community groups who oppose the projects for different reasons. Labor groups are also fighting policies that supporters say would help address the region's housing crisis, such as more use of modular housing and streamlined project approvals. It's a high-stakes game: Unions say the appeals give them leverage to pressure developers to commit to using union labor and to hire locally.((cite news)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Taylor, Mac (2015-03-17). California's High Housing Costs - Causes and Consequences(PDF) (Report). California Legislative Analysts Office. p. 13. Archived from the original(PDF) on 2015-04-06. Retrieved 2017-10-26. California's building codes and standards also are considered more comprehensive and prescriptive, often requiring more expensive materials and labor. For example, the state requires builders to use higher quality building materials—such as windows, insulation, and heating and cooling systems—to achieve certain energy efficiency goals.((cite report)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^"Supplemental Poverty Measure". United States Census Bureau. 2017-03-16. Retrieved 2018-01-04. The official poverty measure, which has been in use since the 1960s, estimates poverty rates by looking at a family's or an individual's cash income. The new measure is a more complex statistic incorporating additional items such as tax payments and work expenses in its family resource estimates. Thresholds used in the new measure are derived from Consumer Expenditure Survey expenditure data on basic necessities (food, shelter, clothing and utilities) and are adjusted for geographic differences in the cost of housing.((cite web)): Cite has empty unknown parameter: |dead-url= (help)
^ Levin, Matt (2017-09-28). "How sky-high housing costs make California the poorest state". Bay Area News Group. Archived from the original on 2017-09-28. Retrieved 2017-11-09. When the cost of living is factored in, the Golden State has the highest poverty rate in the country. ... California has been the poorest state in the nation under the vastly more sophisticated "supplemental" poverty measure since the alternative statistic was created... The Census uses data dating to 2011 to calculate the cost of living, so even the improved poverty rate could be underestimating how big a drain housing has been on California's poor.((cite news)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
^ Levin, Matt (2017-09-28). "How sky-high housing costs make California the poorest state". Bay Area News Group. Archived from the original on 2017-09-28. Retrieved 2017-11-09. One method: What would poverty look like if everyone in California had cheaper rents? Researchers at the the Public Policy Institute of California, which has developed its own California-specific alternative poverty measure, tried to simulate an answer to that question. Researchers there ran a model of the state's poverty rate with every Californian bearing a cost of living similar to that in Fresno County, where a family of four making about $25,000 a year would not be considered poor. The result? The overall poverty rate drops dramatically (from about 21 percent to 14 percent),((cite news)): Unknown parameter |dead-url= ignored (|url-status= suggested) (help)
Comment: This is much more of an WP:NOTESSAY than an article. Please do not include WP:OR in an article. Lee Vilenski(talk) 10:30, 8 January 2018 (UTC)