The Legislative Analyst’s Office said, “Since bottoming out in late 2011, California’s median house price has increased by 45 percent – about 10 percent a year – reaching around $450,000 as of September 2015.”
More recently, research has identified serious consequences to national economies, beyond the fact that many households cannot afford to live, much less buy a home in the metropolitan areas with excessive land use regulation. Because residents such area have less income to spend due to the higher house costs, job creation and economic growth are hobbled. Rising inequality is also being cited as a consequence of excessive land use regulation.
The Newhall Ranch development near Santa Clarita – which was approved 12 years ago and would house nearly 60,000 people – was dealt a stunning setback Monday, the Los Angeles Times reports. The Los California Supreme Court rejected its 5,800 page environmental impact report because it did not address greenhouse gas emissions and how a little fish, the unarmored threespine stickleback, would be protected.
White House economic advisers have produced a steady diet of white papers this year to spotlight the puzzle of sluggish productivity, which economists want a better handle on because it helps explain why incomes for the broad middle class aren’t rising. Their latest target: land-use restrictions.
Policies that increase housing costs have a clear constituency in all homeowners, but they hurt renters and anyone who is hoping to move to an expensive city. The burden of land use regulations are borne disproportionately by low-income people who spend a larger proportion of their income on housing relative to higher income people. These regressive effects of land use policy extend beyond reducing welfare if the least-advantaged Americans. Additionally, rules that increase the cost of housing in the country’s most productive cities reduce income mobility and economic growth.
One million more skilled workers, to close a growing degree shortage driven by shifts in technology and educational expectations among industries. One million more homes for middle-income families, as soaring costs once again put buying out of reach for most Californians. And one million more acre-feet of water per year, representing a push for sustainable management of the state’s dwindling supplies.
The cost of living, and especially renting, in Los Angeles continues to skyrocket and will continue to for the foreseeable future. A new third quarter rental market report by Marcus & Millichap confirms that rents are climbing all over town: asking rents citywide were up 7.8 percent to an average of $1,873 per month. For the year, the report predicts rents will climb 4.8 percent overall, “more than doubling the rate of inflation.”
Not seasonally adjusted, the homeownership rate ticked up slightly to 63.7% from 63.4% in the last quarter–still near its lowest point in 30 years.
Sancho Lopez, a Riverside police officer and homeowner in an adjacent county, experienced the problem first-hand. He and his wife financed the $40,000 cost of 21 dual-pane, energy efficient windows and two sliding doors with a PACE loan. When they decided to sell their house, their realtor warned them it wouldn’t be easy. The house sat on the market for 10 months, and it is in escrow now, Lopez said, only because he has agreed to pay off the loan balance – now $46,000 because of interest and fees.
California’s severe shortage of affordable housing has hit low-income renters particularly hard. Nearly 1.6 million low-income California renter households paid more than half of their income for housing in 2013, and this number has risen 28 percent since 2007. While the shortage is most severe on California’s coast, many families throughout California struggle to pay the rent (see Figure 1). A multifaceted approach with roles for local, state, and federal governments is needed to address the severe affordable housing shortage, but the federal Housing Choice Voucher program can play an outsized role.
“Home prices in Los Angeles and Orange counties posted strong gains in July, rising 6.1% from a year earlier, according to a closely tracked gauge released Tuesday.”
“Housing in California — already considered unaffordable to many — will become even less affordable over the next two years, with construction unable to keep up with demand, according to a UCLA economic forecast released Monday.”
“The forecast for the national economy for the next two years is a healthy one, a slim chance of a recession and a slight chance of a surge in growth. In California, the forecast remains largely unchanged since June. Growth in employment in California will continue, albeit it at a slower pace by 2017, as the unemployment rate falls to about 4.8 percent, similar to that of the nation as a whole.”
The Legislature agreed, but this week, Brown signed legislation that brings back a pared-down form of redevelopment, authorizing creation of “Community Revitalization and Investment Authorities” with many, but not all, of the same powers.
The U.S. construction industry has lost more than half a million Mexican-born workers since 2007, contributing to a labor shortage that’s likely to drive up home prices, according to a new analysis.