California

California’s Housing Crisis Triggers Cycle of Desperation – Lake County Record-Bee

Everyone in California knows, or should know, that the state has a dire housing shortage that persists despite the efforts of its politicians to boost construction.

State officials say we need to build 180,000 new housing units each year to meet demand, even though the state’s population has been slowly declining lately. California is building about half that number at best, adjusted for losses from age, fires and other disasters, and construction appears to be slowing due to soaring interest rates.

The economic laws of supply and demand mean that the housing shortage leads to high housing prices and rents. As these costs, particularly rent, trickle down to Californians at the bottom of the economic ladder, this results in California having the highest poverty rate of any state at 13.2% when cost of living is factored into the calculation.

Poverty declined somewhat during the COVID-19 pandemic thanks to a series of temporary federal and state assistance programs. While they are being phased out, the underlying causes, particularly high housing costs, remain in effect.

Consistently, some impoverished Californians run out of opportunities to keep a roof over their heads and plunge into homelessness, giving California the highest number and highest relative proportion of homeless people in the nation.

Some newly released data not only underscores this unfortunate cycle, but also shows its contrast to what is happening elsewhere.

The first dataset is from Matin Real Estate, a Portland broker, and compares housing in California to other states, expressed in units per 1,000 people.

Statewide, the company says, construction is 5.3 units per 1,000 US people, but individual states range from a high of 11.7 in Utah to a low of 1.27 in Rhode Island. Idaho, Florida and South Carolina complete the top building states, while Connecticut, Illinois and New York are at the bottom with Rhode Island.

California isn’t at the very bottom, but is 13th from the bottom at 3.04 per 1,000. If California were to match the national rate, it would produce 212,000 units per year — slightly more than the state’s official target, but also a level that California once reached.

It’s worth noting that Florida, a state often disparaged by California Governor Gavin Newsom, is ranked #2 among the top nations for residential construction. Texas, another arch-rival, is in 6th place.

California scores even worse in the second dataset, showing the relative impact of rental costs.

Forbes Homes, a website that looks at housing costs, compared rents to incomes in all 50 states using federal agency data and found that renters in California have the second-highest rent burden in the country — the factor behind the very high poverty index of the state dominates.

Hawaii’s renters perform worst, spending an average of 42.06% of their income on maintenance, while California is #2 at 28.47%, followed by New Jersey, Massachusetts and Delaware.

The numbers from both datasets are important indicators of California’s stark socioeconomic divide between those who enjoy California’s unparalleled scenic and cultural wonders and powerful economy, now ranked as the fourth largest in the world, and those struggling to survive.

Housing availability and cost are key factors in this department, the most troubling manifestation of which is the explosion of run-down camps on the sidewalks of the state’s major cities.

As California policymakers state their commitment to addressing homelessness, they should also acknowledge that it has its origins in the state’s chronic housing shortage, which shows no signs of abating.

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