Dan Walters

By Dan Walters
August 8, 2015

  • California needs at least 150,000 new units a year
  • Current production is just two-thirds of that
  • Should developers be required to provide low-income housing?

California’s severe housing crisis is easy to describe – supply too low, prices too high.

The state’s population is still growing, albeit slowly, and as it adds about 350,000 bodies each year, it needs at least 150,000 new units of housing to keep pace.

We’re not meeting that standard. Housing construction, as high as 213,000 units in 2004, plummeted to 36,000 in 2009.

It has since rebounded somewhat and now approaches 100,000 units, mostly rental apartments, but that’s still well short of demand.

Therefore, the demand-supply gap still widens, particularly in coastal areas. Both prices of single-family homes and rents have skyrocketed, hammering low- and moderate-income families.

During the 2010-14 period, for example, Los Angeles County’s population grew by nearly a quarter-million, but it added fewer than 40,000 housing units. During the same period, San Francisco, despite its geographic limitations, grew by nearly 50,000, but built fewer than 10,000 housing units.

The obvious solution would be to build more housing.

However, as a recent report from the Legislature’s budget analyst, Mac Taylor, points out, our development and construction costs are very high.

Moreover, many coastal communities are very hostile to new projects they see as generating more traffic and other environmental effects.

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