Democratic state lawmakers aiming to ease California’s housing shortage say they are focused on three bills they estimate would generate $20 billion for affordable housing development over the next five years and lead to 70,000 new low-income apartments.
They acknowledge it won’t be enough to solve the state’s unprecedented housing problems. But Assembly Speaker Anthony Rendon calls the package he and other lawmakers are working on “an important first step.” The Legislature begins the final month of the 2017 session today with housing atop its agenda.
Half the state’s households struggle to afford the roof over their heads. Homeownership—once a staple of the California dream—is at its lowest rate since World War II. Nearly 70 percent of poor Californians see the majority of their paychecks go immediately to escalating rents.
This month, state lawmakers are debating a long-delayed housing package. Here’s what you need to know about one of California’s most vexing issues.
The regional cost of renting has surged at double the pace of overall inflation so far this century. Renters in Los Angeles and Orange counties give more of their paychecks to the landlord than any other metro in the nation. And perhaps three-quarters of Southern California’s renters claim they are ready to bolt. An exaggerated upswing in Southern California rent is frequently blamed on an economic mismatch: solid employment growth outstripping the developers’ ability to build enough apartments to meet demand, especially for those not seeking luxury digs. Rising home prices also nix ownership for many. So, a growing flock of renters is chasing too few vacant units, and that supply shortfall pushes up rent prices.
. . . a Wall Street Journal analysis of tax data in 40 counties in California—by far the biggest market for PACE loans—shows that defaults have jumped over the last year. Roughly 1,100 borrowers missed two consecutive payments in the tax year that ended June 30, compared with 245 over the previous year. That means they are in default, and could potentially have their homes auctioned off by local governments within five years.
The standstill in Brisbane crystallizes a challenge for state lawmakers desperate to address a statewide problem that has been decades in the making: Local governments wield tremendous power in decisions about whether and what kind of new housing to build, and they are not building enough. The Legislative Analyst’s Office estimates California is so behind that it needs as many as 100,000 more housing units a year — on top of what it typically constructs — just to stabilize prices.
In the nine-county Bay Area, the median price for a single-family home has topped $800,000. And nearly one-third of renters statewide — 1.5 million households — spend more than half their income on rent, according to state estimates.