This week, PPIC (Public Policy Institute of California) put out a report on “Three Decades of Housing Challenges in the Golden State.”
As Hans Johnson and Eric McGhee note, “While California’s housing market has undergone tremendous changes over the years, with some aspects worsening in the last decade, the central problem—high housing costs—remains the same.”
The result: housing crisis, homelessness, and people leaving the state.
“As California’s population has increased, more housing units have been built—yet housing costs and rent increases have outpaced building,” they write.
And, in fact, the key stat is *adjusted for inflation* median home prices have increased by 56% since 1990 and rents have increased by 39 percent. That is, again, taking into account increases in costs over and above inflation.
The result: “California’s housing values remain more than twice as high as the national median, and the state’s rents remain about 50% higher.”
Behind these statistics are consequences.
“Because housing costs are so high, California has among the lowest homeownership rates in the country,” they write. And, again, it’s getting worse. In 1990, it was New York, Hawaii, and Nevada that had lower homeownership rates than California; last year only New York was worse.
Housing issues are social justice issues and most of those issues have racial components. There are stark disparities in homeownership across racial/ethnic lines and, again, those are getting worse.
African Americans and Latinos are most affected by these dynamics.
It’s not just homeowners that are burdened. I often hear people trying to downplay the above stats, but the problem is twofold. First, homeownership rates impact generational wealth accumulation—and there is a great amount of literature on the intergenerational impact of racial disparities on homeownership.
But the other problem is this trickles down to renters as well.
“High housing costs have left many Californians financially burdened. The share of renters who are 'stressed'—paying over half their income in rental costs—is considerably higher here than in other states,” they write.
They note that while this most impacts lower-income Californians “who are generally already in the cheapest rental units and cannot move to escape the burden,” the gap “has been growing most among the middle class. It is a sign of the severity of the housing crisis that one in six middle-class renters in California are now spending over half their income on housing.”
And guess who are most likely to be housing stressed? Black renters.
Guess what—when you block housing projects, you are perpetuating social and economic inequality. I don’t think there has been enough attention paid to this issue—even now when we are becoming more aware of the linkage between housing and economic inequality and other social justice costs.
The report highlights that high costs and financial stress have had two immediate consequences.
First, “homelessness affects a growing number of Californians, including those with mental health or substance abuse problems.”
I’m sure people are aware of this, but from 2007 to 2023, there has been a 47% increase in the homeless population during a time when the state’s population increased by just seven percent.
Moreover, “The vast majority of Californians experiencing homelessness are unsheltered; the state accounts for almost half of the nation’s unsheltered homeless population.”
Second, “high housing costs have driven more Californians to move elsewhere. Those leaving the state have become more likely to cite housing costs as the reason.”
The gap is getting worse.
“Those who bought houses decades ago, when prices were more manageable, have reaped a substantial equity windfall,” they note. “Current market values have made over a million Californians into millionaires. These millionaires reflect the state’s past more than its future; they are far older and more likely to be white than the typical Californian.”
This is of course one of the problems we see locally—many of the people most opposed to new housing projects tend to be older folks who bought their houses when costs were far lower, they aren’t impacted by the housing crisis and they actually benefit financially from it.
Those most likely to support housing projects, on the other hand, tend to be young folks with families worried about being able to buy into a market that is increasingly out of their range—and folks who are burdened by the rental market.
The PPIC report concludes: “The underlying problem is that California is a relatively wealthy state that has underbuilt housing for decades. As a result, high-income Californians bid up the available housing—both purchase prices and rents—while other Californians must pay the premium or move somewhere cheaper.”
Further: “The best long-term solution is to build more housing of all kinds.”
The key again: more housing. Of all kinds.
I would love to see a follow up report to see if what we have done over the last five to seven years at the state level is working. My guess is that it is not.
I would also love this to be the basis of a conversation in Davis as we move into updating the General Plan.
There are consequences here. It is impacting the quality of our schools. It is forcing families with children to live elsewhere. It is changing the demographics of our community.
You need a PPIC study to tell you this? I’ve been saying it for years. But locally it’s not a general plan issue it’s a measure J issue. So you support the policy that enables the inequality.
If you want to make Davis a fairer, more equitable and just place get rid of Measure J.
How would you propose to do that without making the case for it?
Dude you have a platform but have never used it. When challenged you have consistently supported J yet now you’re playing dumb.
You do it by speaking out. Sadly in 2020 because of the pandemic it was not possible to wAge a campaign.
Ron G
Measure J/R/D is not going away. Voters want some sort of say in developments–that’s democracy. And we know for a fact that unfettered development has left our community worse off in many ways. Instead we need to work within the Measure J/R/D or an equivalent framework. Tim Keller, David G and others have offered viable alternatives that can enable new housing with less risk for developers while still offering them a reasonable profit.
J isn’t going away before 2030 unless the courts take it down and maybe not after 2030 but unless and until more people call it out for its failure to provide opportunity for people to build home equity you will certainly be correct.
But the point of my post was to reiterate that the PPIC only reinforces what I have been saying while David and all these other hand wringers, yourself included, have been reluctant to speak what they know to be true about the failures of Measure J. Until people are willing to speak honestly you are correct.
Ron G
You haven’t paid close attention to what we’ve been saying: 1) Measure J/R/D isn’t going away but it can be modified, either at the ballot box or in how projects are presented to the electorate, 2) here’s proposed modifications that will get us closer to a preferred future and doesn’t simply hand over all of the remaining control to developers who don’t really have the community’s best interest at heart (when push comes to shove, they always respond that maximizing their bottom line is most important.)
The problem with this is that ballot box planning has proven to be a failure. Some want nothing, some want perfect, it has been impossible to reach consensus under J. Look at Nishi as an example. Nishi one was a better proposal and Nishi 2 has proven unbuildable to date six years later. Tell me measure J made it better.
Here is a relevant article from Calmatters published yesterday. For this to be possible in Davis Measure J must be abolished or struck down. Just tinkering with it won’t move the needle much. BTW the United States still has an abundance of unused farmland. Obstructionists have weaponized farmland to prevent new housing in Davis and in neighboring communities.
Housing reforms will help California tackle living costs. Berkeley might show us how
The 2024 election was a wake-up call for Democrats and people of all political stripes. A party whose central tenet is championing the needs of working families has clearly struggled to connect with the core concerns of everyday Americans.
Chief among these is the skyrocketing cost of living.
Nowhere is this failure more glaring than in housing, and nowhere is that more evident than in California. High rents, unaffordable home prices and a devastating homelessness crisis are not accidental — they are the result of decades of restrictive zoning and a refusal to adapt.
Berkeley is poised to break this cycle. Once the birthplace of restrictive single-family zoning, the city is now leading the charge to permit new housing in every neighborhood.
https://calmatters.org/commentary/2024/12/housing-reform-living-cost-berkeley/
Walter
See my response to Ron G above. You’re wrong that we can’t make a radical reform to Measure J/R/D but still keep its essence.
There is no way to gain consensus to radically alter Measure J/R/D while still doing much of anything except to further impede new development. The very purpose of slow growth (almost no growth) ordinances is to obstruct and slow down to a crawl. BTW for-profit developers are not the big bad wolves. We need their funding for development because taxpayers don’t want to foot the enormous bills.