LAO: CA housing costs likely to keep ‘rapidly rising’

houses_1The state Legislative Analyst Office’s new report on the high cost of housing in California got some coverage around the state, with a primary focus being its call for 100,000 additional housing units being built a year. The LAO says state leaders should have a goal of creating enough housing stock to put downward pressure on home-purchase prices, which are 2.4 times higher in California than in the U.S., and on rent, which is 50 percent higher.

High housing costs are the main reason that California has the nation’s highest poverty rate when cost of living is included. More than 23 percent of residents struggle to make ends meet compared with 14 percent of Americans.

One of the LAO’s most provocative findings got scant attention. It was that as high as housing costs already are relative to the nation, the disparity is probably going to get worse:

As we have discussed, a collection of barriers have prevented California’s housing developers from responding to high demand to live on California’s coast by building more housing there. Our analysis in this section suggests that these barriers have created a major disconnect between the demand for housing and its supply. Looking forward, there are many reasons to think this dynamic will continue.

Many of the primary factors that make California desirable — moderate weather, natural beauty, and coastal proximity of its major metros — are ongoing. At the same time, we see no signs that coastal community resistance to new housing construction is abating. In addition, many state and local policies that have slowed or stopped development in recent decades remain in effect today.

We therefore think that, in the absence of major policy changes, California’s trend of rapidly rising housing costs is very likely to continue in the future. … In our view, this major finding that demand for housing in California substantially exceeds supply should inform discussions and decision making regarding state and local government housing policies.

Much of the coverage of housing costs has focused on how they exacerbate poverty. The LAO report notes that low-income families in Los Angeles, for example, spent two-thirds of their money on housing alone.

But if the LAO is right and housing costs continue their rapid rise, this will push upper-middle-class families down into the middle class, and middle-class families into the working poor. The implication is that without commensurate increases in family income, higher housing costs are likely to drive state poverty even higher than the present 23 percent.


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  1. Queeg
    Queeg 21 March, 2015, 20:22

    Housing is cheap. Hordes and hordes coming to Califnornia. Stop complaining and buy buy buy….Rent out rent out rent out.

    Opportunities everywhere….

    Reply this comment
    • Richard Rider
      Richard Rider 22 March, 2015, 08:53

      No, there are not “hoards and hoards” coming to California. That time has passed.

      Indeed, since 1992, we’ve had an annual net domestic OUTmigration of people moving between states, in no small part because of our government-enforced housing shortage — coupled with our high unemployment.

      Our immigration from other countries,legal and illegal, has slowed dramatically since about 2008.

      Reply this comment
      • Queeg
        Queeg 22 March, 2015, 10:15

        Do you really believe government or government statistics. Open your eyes….your gritty San Diego is a seedy shell of itself due to traffic, overcrowding, the most corrupt politicans in the civilized world, greedy tourist hustlers. Check Escondido, the apts are a nightmare due to overcrowding….look at sprawal along #15 all the way to Murrieta.

        Reply this comment
      • JimmyDeeOC
        JimmyDeeOC 23 March, 2015, 12:22

        For 20 years I have been shaking my head at comments from slack-jawed imbeciles, which go something along the lines of:

        “Golly-gee-willikers! How is it that (Fill-in-the-blank: Vegas/Tucson/Phoenix/Portland/Salt Lake) have grown so big, so fast??”

        Reply this comment
    NTHEOC 22 March, 2015, 08:55

    Capitalism at its best!!

    Reply this comment
    • Dyspeptic
      Dyspeptic 22 March, 2015, 11:36

      Like a good little socialist drone you naturally blame “Capitalism” in that ignorant, knee jerk way that leftists do. California’s housing shortage is mostly due to multiple layers of state and local regulations that making building more expensive, more difficult and more risky for private builders.

      You statist hacks are so predictable. Everywhere you run things (which is most places in this state) you implement rent control, slow growth, no growth, “smart” growth or “fair” growth policies and then have the nerve to blame the inevitable housing shortage on the bogeyman of “Capitalism”.

      You are a fountain of implacable ignorance and every comment you make proves it.

      Reply this comment
      • JimmyDeeOC
        JimmyDeeOC 23 March, 2015, 12:13

        Copies and saved. A thing of beauty. Paraphrasing Taggart in Blazing Saddles:

        God darnit, Mr. Dyspeptic, you use your tongue prettier than a twenty dollar whore!

        Reply this comment
    NTHEOC 22 March, 2015, 09:00

    People who are not coming to California WISH they could come!! We are the envy of the nation. Our economy is soaring high and all is good.

    Reply this comment
    • Dyspeptic
      Dyspeptic 22 March, 2015, 11:42

      You sound like a paid shill for Governor Clown and the DemocRats. Just keep chewing your cud and try not to make more than one foolish comment per day.

      Reply this comment
      • NTHEOC
        NTHEOC 22 March, 2015, 15:19

        It has been said the Inland Empire is the tell tale sign on how the California economy is doing. We’ll guess what DOOMERS?? All is good in Cali. From west to east, as the economy improves, Inland Empire malls and shopping centers are seeing a resurgence, with once empty spaces being filled, more construction and customers more willing to dish out cash and some credit. In essence, the mall market seems to have turned a corner. BOOM!!!! California is the envy of the nation!!!!!

        Reply this comment
      • NTHEOC
        NTHEOC 23 March, 2015, 23:38

        You sound like a paid shill for Governor Clown
        What’s your problem with Governor Jerry Brown??

        Reply this comment
  4. Bill Gore
    Bill Gore 22 March, 2015, 09:17

    The LAO calls itself an ‘analyst’, and I’m sure they are very highly compensated to publish this ‘no brainer’ type of stuff, but I don’t see any ‘analysis’ in repeating normalcy bias, i.e. just repeating ‘the way things are is the way things shall be…until they aren’t’. A couple of things about ‘housing’ come to mind. 1) ‘Housing’ is pretty much the last major industry left in this country, besides agriculture, that hasn’t been shipped overseas by the pirates that own our government 2) the housing ponzi scheme, inflated by endless ‘stimulus’ money looking for a home, cannot in fact go on forever. 2008 will be seen as just a warm up in the next collapse, and if the gubmint won’t bail out the banks AGAIN, well the banks very well might stage a coup detat…Think about it….

    Reply this comment
    • NTHEOC
      NTHEOC 22 March, 2015, 09:31

      2008 will be seen as just a warm up in the next collapse, and if the gubmint won’t bail out the banks AGAIN, well the banks very well might stage a coup detat…Think about it….
      Thanks for the warning Chicken Little!!!!! The sky is falling,the sky is falling…….

      Reply this comment
      • Queeg
        Queeg 22 March, 2015, 10:25

        Buy real estate… will prosper….household formation is going through the roof ….you see babies in strollers everywhere all cramped up in ghettos like San Diego and LA. Bursting point will be relieved by spew into the suburbs and single family homes will have 2-4 families in them. Demand intense. Prices to the moon.

        Reply this comment
        • Donkey
          Donkey 22 March, 2015, 22:36

          The sky is falling Ntheoc, but no one expects a RAGWUS feeding sow like you to notice!! 🙂

          Reply this comment

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Chris Reed

Chris Reed

Chris Reed is a regular contributor to Cal Watchdog. Reed is an editorial writer for U-T San Diego. Before joining the U-T in July 2005, he was the opinion-page columns editor and wrote the featured weekly Unspin column for The Orange County Register. Reed was on the national board of the Association of Opinion Page Editors from 2003-2005. From 2000 to 2005, Reed made more than 100 appearances as a featured news analyst on Los Angeles-area National Public Radio affiliate KPCC-FM. From 1990 to 1998, Reed was an editor, metro columnist and film critic at the Inland Valley Daily Bulletin in Ontario. Reed has a political science degree from the University of Hawaii (Hilo campus), where he edited the student newspaper, the Vulcan News, his senior year. He is on Twitter: @chrisreed99.

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