Housing shortageMarket Direction

Population growth is far exceeding new construction in California

Between 2010 and 2016, only one new housing unit was built for every four new residents in California, half the rate of most states in the nation. Builders are slowing down after the Millennium Boom, a period between 2000 and 2007 of overbuilding that led to an excess of 338,000 new housing units in California. But those slots are filling fast as California continues to see population growth without the rapid construction. Compounding the problem, many of the housing units being built now are designed for high-end buyers. The average price difference between old and new construction has more than doubled in the past six years. Low and middle income buyers, particularly first-time homebuyers who are just now able to enter the housing market after the recession, can’t afford new constructions.

The solution? Build more. But don’t just build anything — California needs more new affordable housing, not just more new housing. Looser zoning restrictions are necessary in densely populated areas so that more high-density housing can be built. Streamlining the building permit process and giving builders incentives to build low- and mid-tier housing would also help alleviate the issue.

More: http://journal.firsttuesday.us/california-worst-in-the-nation-for-new-affordable-construction/61626/

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