What Caused California’s Housing Crisis?
California is home to 12 percent of the U.S. population and, unfortunately, 22 percent of its homeless people. Housing experts believe that the housing problem started back to the 1970s, when backlash began to develop, most notably in coastal communities, from neighbors who opposed new housing in their neighborhoods. According to state housing officials, California needs 180,000 new housing units per year, but it is building an average of less than 80,000 annually. State officials also claim that there is a 1.5 million unit-shortfall between the number of low-income families who live here and the number of rentals they can afford. Brian Uhler, who leads housing research for the nonpartisan state Legislative Analyst’s Office, which tracks housing trends and identifies possible solutions for the Legislature, stated,
It started then and it’s still true today – people, just as a matter of human nature, are anxious about change and accommodating new people in their communities. California communities are vested with significant authority over land-use decisions, about how much can be built, and when and where. They have used that authority to create significant barriers for the construction of new housing. Shrinking Rust Belt cities are the only kinds of places that are building as little housing as our coastal areas did in recent decades. We just haven’t been building enough housing – not just low-income or affordable housing, but housing of any kind.
Proposition 13, enacted in 1978, reduced the amount of property tax revenue cities and counties have to build new housing and it has created incentives for commercial development over residential development, because cities and counties can benefit more from increased sales tax revenue from businesses than they can from property taxes on homes. Unfortunately, affordable housing money from two state housing bonds that were approved by voters in 2002 and 2006, totaling roughly $5 billion, has dried up. Since 2008, the state has lost millions of dollars per year from federal grants for housing construction and rental assistance. Federal tax credits for low-income housing remain relatively stable; however, state tax credits have shrunk. Developers, housing advocates and some state lawmakers believe that building higher-density housing in cities, to accommodate more people, restricting suburban sprawl and preserving sensitive environmental areas makes the most sense in terms of a solution, but community opposition often kills large-scale projects and leads to less dense housing.
Unfortunately, the cost of building has risen as building supplies have become more expensive and the price of labor has gone up. Many housing projects that involve taxpayer dollars include prevailing wage requirements, which mandate construction contracts pay workers higher wages that keep pace with the cost of living. State housing officials are also saying that California needs 1.8 million more housing units by 2025 to meet projected population growth. These issues are what the Sacramento Bee believes caused the housing crisis, but hopefully a solution to the housing crisis so that more homes can be built.