California’s

Future: Housing
Genissis Hernandez
Becky Anderson
Challenges in California’s Housing
market

● California’s home values and rent remain the highest in the United States.
● August 2017: Home values increased by 7.1% over the year reaching values of
$507,700
● Rent has continued to increased due to high demand
● With high home values and rent many cannot afford housing and may lead to
homelessness
Housing values keep rising

● May 2017- September 2017: 47% of Californians, including 61% being renters, stated
that housing costs placed a financial strain on them
● Since the housing bust, the state’s median value is up by 66% since it’s low in 2012
● Five of the Bay Area Counties have higher prices than previous highs
● Other counties that have seen a rise over the past six year: San Joaquin (113%),
Sacramento (92%), 84% in San Bernardino, and 74% in Riverside.
● Lower foreclosing rates
● An increase in new construction permits
Still remains expensive for most
Californians

California’s median monthly housing costs for homeowner mortgages are 47% higher than
nationwide and for renters it is 40%.

● California’s median income is only about 18% higher than the nationwide median.
● 30% of mortgaged homeowners and 46% of renters spend more than 35% of their
income on housing costs compared to 21% and 40% nationwide.
Housing is unaffordable in coastal areas where ⅔ of Californians live.

● Nine out of the nation’s ten least affordable metropolitan areas were in California
● San Francisco was the least affordable
○ Los Angeles, Orange County, San Jose, Santa Rosa, Ventura, San Diego, Oakland and Stockton
were also in the top ten
■ Estimated rent in LA is $1,798 and SF $3,337 for a two bedroom apt.
● Lower prices in Inland areas
● Low vacancy rates have contributed to the tight rental market
● Homeownership rates have fallen
● Homelessness
For the future,

● Promotion of commercial and development, such as tax incentives, should be balanced

by policies encouraging new housing
● Increase supply of affordable housing
● Expanding housing options for homeless individuals and families
● Balance environmental goals with housing development
To Summarize:

● CA home values and rents are the most expensive in the

nation
● Rents are high and rising; vacancies are low
● Housing demand continues to increase
● CA is in a housing crisis
What is Affordable Housing?

● A unit that may be purchased or rented for no more than 30%

of a household’s income
● According to HUD 12 million households pay more than 50%
of their annual income for housing
● A family with one full-time worker earning minimum wage
cannot afford the local fair-market rent for a two-bedroom
apartment in the U.S.
What is HUD?

● The Department of Housing and Urban Development

● This is a cabinet within the Executive branch of the federal
government
● CA Department of Housing and Community Development
(HCD) operates a wide variety of programs aimed at
increasing affordable housing
General Plan

● Broad planning guideline for the future development of the

community
● Housing Element
○ Assesses the community’s needs
○ Considers state imposed goals of providing housing for all
income groups
○ Establishes policies to ensure these needs are met
Why Should We Care?

● Housing affordability is a societal problem

● Lack of affordable housing can have negative impacts on a
community’s economy
● Lack of affordable housing can make low-cost labor scarce
● It can increase the demands on transportation systems as
workers are traveling longer distances between jobs and home
Current Policies

● CA has not passed a general housing bond since 2006

● Strong majorities support housing bonds
○ NIMBY
● Inclusionary zoning policies require housing developers to set
aside a certain amount of new units for low-income housing.
○ In-lieu fees
● Fewer environmental regulations
○ Lawmakers have attempted to ease the burden CEQA
imposes on housing projects
Funding Affordable Housing

● Cooperative federalism
● Veterans and Affordable Housing Bond Act 2018
○ $4 billion general obligation bond, if passed
○ $3 billion used to finance various existing housing
programs
○ $1 billion to finance veteran housing
Possible Solutions

● CA needs short and long-term policies that will improve

housing affordability and remove barriers to creating
affordable housing
● State and local government need to take action
○ More incentives to developers
○ Tax incentives
○ Partnerships
Discussion

● What are your thoughts?

● T-P-S
● How do you think affordable housing can best be funded?
● What policies would you create?