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Despite the recovery, California is still experiencing the aftereffects of the most recent housing bust, and the long-term challenges of housing California’s population haven’t gone away. The housing bubble, which popped in 2008, left the state with a foreclosure problem and large losses of construction jobs. About 652,000 California homeowners remain “underwater”—their mortgages are higher than the market value of their homes (CoreLogic, 2014 second quarter). Paradoxically, a housing recovery for some is a housing problem for others, as high rents and increasing prices place housing out of reach for many Californians.

One of the main reasons for the disparity is the difference between California and the nation when it comes to the cost of housing – and this is readily apparent in the new numbers released by the BEA. The state has been in the midst of a housing shortage for years now, due in large part to regulatory hurdles such as the California Environmental Quality Act (CEQA) and other legislation that constrains construction. The lack of supply pushes up prices and forces residents to commit more of their disposable income to housing. According to the real estate research firm DataQuick, the median price for an existing home in California was $388,000 in December 2014, nearly double the national median home price of $209,500, as reported by the National Association of Realtors.

Lawmakers, educators and representatives of the homebuilding industry pushed back Wednesday against Gov. Jerry Brown’s proposal to end a long-standing state policy of issuing bonds to help pay for school construction.

So much of California’s land is off limits from development – and government rules impose high costs on builders who want to construct anything on the remaining, developable land. It’s not a surprise the state has many of the nation’s priciest markets, and current policies are likely to exacerbate the problem.

The region’s housing mismatch increasingly affects hiring and corporate location decisions. In early 2014, Charles Schwab Corp. told employees in San Francisco that it planned to move “a significant number of San Francisco-based jobs” to other locations around the country over the next three to five years. The move is expected to involve more than 1,000 of its Bay Area workforce of 2,700.

The past thirty years have seen a dramatic decline in the rate of income convergence across states and in population flows to wealthy places. These changes coincide with (1) an increase in housing prices in productive areas, (2) a divergence in the skill-specific returns to living in those places, and (3) a redirection of unskilled migration away from productive places. . . Income convergence continues in less-regulated places, while it has mostly stopped in places with more regulation.

The state overall has been losing people to other parts of the country since the 1990s. A snapshot of more recent U.S. Census migration numbers shows that nearly three-quarters of those who have left California for other states since 2007 earn less than $50,000 a year.

This trend has likely helped hold back U.S. economic growth. Cities with the strongest job markets, such as New York and San Francisco, would grow even faster if more people could afford to live there, noted Jed Kolko, chief economist at the online real estate firm Trulia. The additional population would help spur further job growth, which, in turn, would strengthen the local economy and foster more of the middle-class jobs that the nation lacks.

This trend has likely helped hold back U.S. economic growth. Cities with the strongest job markets, such as New York and San Francisco, would grow even faster if more people could afford to live there, noted Jed Kolko, chief economist at the online real estate firm Trulia. The additional population would help spur further job growth, which, in turn, would strengthen the local economy and foster more of the middle-class jobs that the nation lacks.

Millennials tend to gravitate to certain cities. They’re more likely to live in San Diego than Newark, in Austin than Cleveland, in Washington than Tampa. But these geographic patterns bode poorly for their homeownership prospects: Millennials make up a larger share of the population in many metropolitan areas where they’re least likely to afford the housing.

Restaurants, charter schools and major projects costing $10 million or more would be eligible for a new case-management program, a single point of contact to guide such projects through the city’s sometimes-Byzantine process of applying for permits and approvals.

. . . a new report out Tuesday from real estate website Trulia, which found that a household earning the median income of $54,000 can afford just 22% of homes in L.A. County on 31% of their income or less. Only in San Francisco, at 15%, can fewer middle-class families afford to buy. Six of the seven least-affordable markets in the nation are in California, including San Diego (25%), Orange County (26%) and Ventura County (33%).

Kolko’s theory isn’t an outlier. There is a deep literature tying liberal residents to illiberal housing policies that create affordability crunches for the middle class. In 2010, UCLA economist Matthew Kahn published a study of California cities, which found that liberal metros issued fewer new housing permits. The correlation held over time: As California cities became more liberal, he said, they built fewer homes.

New figures highlight the growing gap between owners and renters in the Southland: Many homeowners are capitalizing on low interest rates to push down their monthly payment while renters are shelling out larger shares of their income to stay afloat.

A new study by the University of California, Los Angeles concludes that LA has the least affordable rental homes in America, and other reports rate California as the worst state both for renters and mortgage-payers (see map). The UCLA study reports that tenants in LA spend on average 47% of their gross income on rent—a higher share than in any other city. (Academics typically deem rent “unaffordable” if it eats up more than 30% of a household’s income).