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Liberal utopia? California has most severe housing deficit in the nation

Report finds the state has a shortage of 978,000 homes, an increase of 82% since 2012.

Published: July 14, 2022 6:42pm

Updated: July 15, 2022 12:22am

(The Center Square) -

California has the most severe housing underproduction in the nation, reaching a deficit of nearly 980,000 homes, according to a new report released Thursday.

The study, released by Up for Growth, found that 47 states, the District of Columbia and 169 out of 309 metropolitan areas have a housing deficit. Nationwide, the study found that housing underproduction has reached 3.79 million units – up from 1.65 million units in 2012.

At the state level, California leads the nation in housing underproduction, with the report estimating the state has a deficit of 978,000 homes – an increase of 82% since 2012. The state with the second-highest deficit is Texas at 322,000 homes and Florida at 289,000 homes.

“With the nation 3.8 million homes short of meeting housing needs, the U.S. is in an extreme state of housing underproduction,” Mike Kingsella, CEO of Up for Growth, said in a statement. “Housing affordability is foundational for building and sustaining healthy local economies, and provides individuals and families with the stability necessary to invest in themselves and their communities.”

The report notes that the reasons for housing deficits nationwide can be unique to certain locations. “In Detroit, underproduction is driven by uninhabitable units, while in Sacramento, a lack of housing is driving the shortage,” the report says.

California’s crippling housing shortage and crisis has caught the attention of the Legislature, and several lawmakers have introduced bills in recent years to make it easier to build homes in the state.

One such bill, Senate Bill 9, took effect January 1 and makes it easier for homeowners to subdivide an existing lot. Under the law, up to four units can be built on a single-family zoned parcel.

Lawmakers have also introduced several housing measures this year to address the state’s shortage. One measure authored by Assemblymember Buffy Wicks would allow housing to be built in “underutilized commercial sites” – including areas zoned for office, retail and parking – while another measure by Assemblymember Laura Friedman would eliminate costly parking mandates near major transit stops.

“California’s shortages of affordable housing and our growing homelessness challenges have become a humanitarian crisis, and we have to treat them with that sense of urgency,” Wicks, D-Oakland, who serves as chair of the Assembly Committee on Housing and Community Development, said in a statement in April.

If California closed its housing gap, “home prices and rents would grow 20% more slowly than if the status quo continued unchecked,” the report estimates.

To address housing underproduction, the report lays out a framework that prioritizes the creation of homes in areas with “high economic mobility, access to jobs and existing infrastructure.” It also pinpoints the three main drivers of housing underproduction nationwide – insufficient availability, uninhabitable units and missing households, which refers to the increase of more unrelated people choosing to live together, preventing new households from forming.

The study also identifies housing affordability as “an expanding national crisis” that not only contributes to higher rates of cost-burdened renters but higher rates of homelessness as well. The report states that “the nation’s highest rates of houselessness are in the Washington DC-Boston corridor, the West Coast, and Hawaii, all areas with high-priced, supply constrained housing markets.”

California has the highest rate of homeless individuals in the nation, with over 161,500 experiencing homelessness on any given day, according to the United States Interagency Council on Homelessness.

“We’ve long known one of the core drivers of our region’s homelessness crisis is the lack of affordable housing,” Maria Salinas of the Los Angeles Chamber of Commerce said in a statement. “Eliminating barriers which inhibit economic equity, especially with something as integral as housing, is crucial to our economic recovery and will ensure the dignity and well-being of all of L.A.’s communities and communities around the world."

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