California Housing Shortage Crisis News 2018

ANAHEIM, Calif. - Feb. 19, 2018 - PRLog -- It is not new news that California has a critical housing crisis. Since the year 2000, approximately less than half of those who live in Southern California can afford to buy a house in the county they live in. Certain counties are worse than others. Of the four primary counties in the greater Los Angeles area, San Bernardino County is the most affordable and Orange County is the least affordable. The median listing price in December 2017 for a house in Orange County was $759,000. The median sale price was $690,000. Also, the median sale price for a house in San Bernardino County was $307,900.

At the height of the housing boom in 2006, only about 10% of residents could qualify for a standard mortgage in Los Angeles and Orange Counties. Similarly, only about 20% of residents could afford a house in Riverside and San Bernardino Counties.

During the housing bust of 2009 to 2012, about 30-50 percent of Orange and Los Angeles County residents, and about 60-80 percent of Riverside and San Bernardino residents could afford to purchase a house.

7 Causes of the Housing Crisis in California

Many want you to believe that the reason houses cost so much in California is that of a singular issue - a lack of available houses.. This is a part of the issue, but it is not the only one. The following is a brief discussion of 7 reasons for the California housing crisis.

1) Supply and Demand

Housing development along the Pacific coast, where the demand is greatest, has seen development slow down the most. While the rest of the country saw an increase in housing construction in and around 2005, construction along the coastal communities was flat. An increase in demand in combination with slower increase in supply increased prices.

2) Low Density Construction

Instead of high rise housing apartments and condo complexes, there is a high demand for single family dwellings with more space in between houses. This lower density concept decreases the ability to increase the amount of housing supply.

3) Cost of Construction

Apart from the cost of the land, there are three components to the cost of housing construction: labor, supplies, and government fees. Labor in California is about 20% higher than the rest of the country. Government fees, permits, building code restrictions, and even school fees significantly increase the cost of building a home in Southern California. It is estimated to cost between 50-100 thousand dollars more to build in California than the rest of the country.

4) Environmental Protection Laws

There are a number of laws restricting construction in coastal communities where the demand is greatest. Wetlands protection, species protection, air quality protection, and water quality protection are just some of the environmental laws in place that restrict construction in coastal areas. Also, many construction projects must undergo an environmental impact study before construction begins.

5) Land Protection Acts

A number of acts, regulations, and laws have enacted which convert more and more usable land into protected lands. This significantly reduces the amount of land available to build housing on top of.

6) Competition with Commercial Property

Residential property is where we live, but commercial property is where we spend our money. Governments obtain a lot of tax revenue from commercial enterprises, such as shopping malls, grocery stores, auto malls, and restaurants. These enterprises compete for the same land that housing can be placed upon.

7) Community Parks and Activities

City and country parks also require land. City halls, parks, recreation centers, schools, and sports arenas are in competition for land.

Between 1980 and 2010, California produced about 120,000 new housing units per year. In order to keep up with demand, the state would have had to produce about 200,000 units per year, and much of those in coastal communities.

The solution to less expensive and more available housing in California is a simple one, but there are many who oppose it. The solution is to remove the hurdles and build higher density housing units in coastal communities. The problem is that those with significant power, money, and influence within the state of California oppose removing these hurdles.

David Collins and Associates

California Real Estate Property Appraiser

http://www.dcnassoc.com/

dcnassoc@verizon.net