Rarely has California seen a campaign as unified and cohesive among its elected officials as the push for housing density that Gov. Gavin Newsom and allied state legislators have led for the past five years.
In the long run, as lawmakers passed law after law easing the way for the development of high-rise apartments and condominiums, there were three major goals: one was to ease the housing shortage, the other was to lower house prices, and the third was to alleviate the stubborn problem of homelessness.
In the eyes of state officials, these things are intertwined. By building new homes and alleviating the current shortage, real estate prices and rents should drop, thus relieving the pressure on many people who have trouble paying their rent and allowing them to avoid eviction and homelessness.
But three new reports make it clear that it won’t work. The more homeless people arrive in the houses newly reserved for them in many cities and counties, the higher the number of individuals living on the streets rises. The more people who immigrate from California tend to leave their previous homes, the more the number of homeless people increases. And the greater the supply of housing, as is now becoming apparent, the greater the cost of using it.
These unfortunate results are not just the result of people like Anchorage Mayor Dave Bronson, who openly advocates sending his city’s homeless to cities with warmer climates, such as Los Angeles and San Francisco, before the Alaskan winter hits hard. Bronson is clear about this, unlike officials in Texas and Florida, who used state money to send busloads of newly arrived immigrants to California cities.
But the number of Californians who are currently housed but cannot afford homes far exceeds the homeless population.
The most recent official count shows California has about 170,000 homeless people on any given night, while the state’s Department of Housing and Community Development now estimates the housing shortage at 2.5 million units. Those government estimates of housing needs have varied over the past five years between 1.8 million and 3.5 million, but less than 10% of any amount has been built in any one year.
One reason may be that people living in single-family residences did not seize upon the 2021 laws known as SB 9 and 10 to build either high-rise housing or dense apartment units on existing lots. Around the state, officials have reported only lukewarm results from the laws, which allow high-rises to be built on or near nearly all “major transportation corridors” and provide almost automatic approval to build as many as six houses on almost all existing single-family lots.
For cities that don’t get new plans for high-density housing approved by HCD bureaucrats, a 2017 law known as SB35 (or the “builder’s remedy”) denies local governments and their constituents’ right to protest almost any construction plan that includes large amounts of “affordable housing” that would be available to buyers with incomes at 80% or below the median level in an area.
The UC Berkeley Terner Center for Housing Innovation reports that this law has so far resulted in the construction of 18,215 units, a drop in the bucket of what HCD needs to meet demand.
Meanwhile, median home prices did not decrease as they rose. In Los Angeles County, home prices have risen 30% over the past five years, according to a Zillow survey, with the median price just under $1 million. Several California cities have already surpassed the million-dollar median mark (half of the homes sold are above and half are sold below that level), including San Jose, Santa Maria, Santa Cruz, and San Francisco. California’s overall median is the second highest in America, behind only Hawaii, driven only by inflation.
The Zillow average home value index for California was $743,361 at the end of June, about five times the level of West Virginia, the lowest in the nation at $155,773.
All of these indicate the need for more conversions of vacant offices, shops, and parking lots into housing. An alternative is to build away from deserts and other ex-urban areas, a tactic that contributes to climate change because it forces longer commutes for those who still work in offices.
