California has a serious housing shortage. California’s housing costs, consequently, have been rising rapidly for decades. These high housing costs make it difficult for many Californians to find housing that is affordable and that meets their needs, forcing them to make serious trade–offs in order to live in California. In our March 2015 report, California’s High Housing Costs: Causes and Consequences, we outlined the evidence for California’s housing shortage and discussed its major ramifications. We also suggested that the key remedy to California’s housing challenges is a substantial increase in private home building in the state’s coastal urban communities. An expansion of California’s housing supply would offer widespread benefits to Californians, as well as those who wish to live in California but cannot afford to do so. Some fear, however, that these benefits would not extend to low–income Californians. Because most new construction is targeted at higher–income households, it is often assumed that new construction does not increase the supply of lower–end housing. In addition, some worry that construction of market–rate housing in low–income neighborhoods leads to displacement of low–income households. In response, some have questioned whether efforts to increase private housing development are prudent. These observers suggest that policy makers instead focus on expanding government programs that aim to help low–income Californians afford housing.
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