Sacramento Bee: California is paying for this housing crisis, and not just in mortgages and rents

Sacramento Bee: California is paying for this housing crisis, and not just in mortgages and rents
May 24, 2018 Peter

The “California Dream” of homeownership is not yet dead, but it’s on life support. As housing prices continue to hit record highs, economic divisions are deepening across the state. The details are intricate, but the overall picture is clear: Our strong but dysfunctional economy is driving away families the state needs for sustainable economic growth. It’s no secret that California’s home supply severely lags demand. Since the trough of the recession in 2009 through last year, an average of 73,000 new housing permits were issued each year. This is down from an average of 135,000 permits issued annually between 1991 and 2007. If these trends continue, we could see a housing backlog of 3.4 million units by 2025. And even if we maintain the uptick in new construction that the state experienced last year, we’ll still face a backlog of 2.8 million units. For California families, the housing shortage means choosing between the second-highest rent burden in the nation and long commutes, or moving out of state. For California companies, it means difficulty recruiting and retaining top talent. For California’s economy, this may mean a shortage of local workers in key areas. And for the state’s future, it might mean a brain drain, as young people figure their prospects are brighter elsewhere. Our inability to build new housing is constraining our economic growth, jeopardizing our climate change goals, and preventing healthy diversity in our population.

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