Dan Walters

Dan Walters: Data show California’s deepening housing crisis

Three dry statistical reports issued simultaneously Monday reveal the stark dimensions of California’s deepening housing crisis.

A Census Bureau report says that in 2015, California saw 98,188 permits for new units, up from 83,657 in 2014.

A deeper data dive reveals that during the 11-year period from 2005 to 2015, local governments issued permits for just under 1 million units, but there were wide variations during the period.

In 2005, at the height of the housing boom, California saw 205,000 housing permits issued, but as the bubble burst activity dropped to as low as 35,000 in 2009 before beginning a slow rise.

During the same period, California’s population rose by 3.3 million, from 36 million to 39.3 million. The average household size in California is 2.78 persons, which indicates we needed 1.2 million new units during that period, so by those numbers we have a big backlog.

Moreover, even 100,000 new units a year is roughly 25,000 short of what we need for current population growth – not counting the backlog.

But wait, as the television pitchman says, there’s even more, as shown in a state Department of Finance report.

While we issue permits for 100,000 units a year, the net gain last year was just 67,110, as thousands of units are demolished or destroyed by fire each year. Over the 2005-2015 period, the net gain was 936,192 or just three-fourths of population-driven demand.

The yawning – and ever-widening – gap between the housing that California needs to keep pace with its modest increases in population and what is actually being produced has driven rents and other housing costs through the roof.

California’s rents, averaging $2,050 for a two-bedroom unit, are about 50 percent above the national average, according to another new report issued Monday, and while they have moderated in recent months, are still among the nation’s highest and fastest-increasing.

Three California cities – San Francisco, San Jose and Los Angeles – are among the nation’s 10 highest-cost cities, with San Francisco No. 1 at $4,690 average per month for a two-bedroom unit.

The crisis is particularly acute for the 15 million Californians who live in poverty or what the Public Policy Institute of California calls “near-poverty.” It’s not uncommon for families in major urban areas to devote well over 50 percent of their meager incomes to shelter.

California politicians talk about the housing crisis constantly. But while offering a few token inducements for new construction, they’re unwilling to address the macro issue.

California’s housing costs are highest in cities, such as San Francisco, that tend to be politically the most liberal, and local resistance to construction in those cities, in the name of environmental protection, is also the most intense.

Not surprisingly, liberal legislators from those cities are unwilling to make the atmospheric changes, such as overhauling the California Environmental Quality Act, we need to encourage more housing and close the widening gap between demand and supply that keeps costs so high.

So much for helping the poor.

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