According to an economic analysis in the Anderson Forecast from the University of California, Los Angeles released last month, projections show that rents will continue to surge, especially for low- and middle-income people in places such as Los Angeles, Sacramento, and San Francisco. The following six metropolitan areas, out of seven, are the least affordable across the United States: Los Angeles, San Francisco, San Jose, San Diego, Riverside and Sacramento. Market-rate development has outstripped the supply of affordable units, and it appears that the middle class is being affected the most. David Shulman, a senior economist for the Anderson Forecast, stated:
It was already bad before, but it’s getting worse. California is still attracting high-income people, who are creating an enormous amount of wealth, but low and middle-income people like teachers are leaving because housing has become extraordinarily expensive. It’s getting harder and harder to live here. The state is running out of people who can afford the $3,500 per-month rents so those prices are beginning to fall… but if you look at the one-bedrooms for $1,500, those rents are continuing to go up.
Lawmakers have vowed to come up with a solution to ease the housing crisis. For instance, Governor Jerry Brown wants to streamline housing development by limiting environmental project reviews, lowering permit requirements that can drive up per-unit costs, and providing financial incentives to cities and counties that build new housing. Lawmakers are reluctant to pass new fees or taxes because of the April vote to raise state gas taxes, but they could still decide to vote on another tax to helping with the housing issues. Housing advocates have been pushing for the passage of Senate Bill 2 authored by Senator Toni Atkins (D-San Diego), which would add a $75 fee on real estate transactions and generate an estimated $300 million per year for housing. We will have to wait and see what solution lawmakers come up with to help out with the housing crisis.