The Golden State Faces a Massive Shortage of Residential Real Estate. So just why Aren’t Builders Building?
California has a housing crisis.
This probably does sound that is n’t news because of the recent publicity about disputes over homelessness, rapidly rising rents, and gentrification—and the flurry of policy proposals for everything from rent control to fees on commercial construction and property sales used to aid affordable housing programs. Unfortunately, the conversation about housing is essentially disconnected from the reality associated with the problem, its causes, and potential fixes.
Debate concerning the housing crisis typically revolves around low-income households, and understandably so. The rule of thumb is the fact that people shouldn’t spend more than 30 % of their income on housing. Meeting such a standard is nearly impossible for the majority of low-income families. A lot more than 90 percent of California families earning significantly less than $35,000 per year spend more than 30 percent of these income on housing. But that isn’t new; that percentage has been stubbornly high for a long time. Nor is this an exclusively californian figure that is problem—the comparable the united states of america overall is 83 percent.
The crisis for families living at or near to the poverty line absolutely deserves attention. Exactly what is also disturbing about current trends is that the crisis happens to be spreading to households that are middle-income families earning between $35,000 and $75,000 each year.
In 2006, 38 percent of middle-class households in California used a lot more than 30 % of their income to cover rent. Today, that figure is finished 53 percent. The figure that is national as a place of comparison, is 31 percent. It really is a whole lot worse for folks who have borrowed to get a home—over two-thirds of middle-class households with a mortgage are cost-burdened in California—compared to 40 percent in the nation overall.
The social costs of this middle-class housing crisis are not sufficiently appreciated. These middle-income families have less money to pay on other goods and services—and that creates huge losses over the economy. It forces California employers to pay higher wages than elsewhere when you look at the nation, raising prices for California consumers and diminishing the state’s competitiveness. Continue reading “Affordable Housing Is Now a Middle-Class Crisis in California”