California’s housing crisis: what we don’t know does hurt us

OPINION – California’s housing crisis is large and multidimensional — from a desperate lack of affordable rentals for low- and moderate-income families to an equally severe lack of affordable homeownership opportunities for all but wealthy Californians. As an organization devoted to increasing affordable homeownership opportunities for communities of color, we saw a huge gap in our knowledge, one California must address.

We consider homeownership critical because not only is it fundamental to the American Dream, it’s how most American families build wealth and financial security. And in much of California, it’s out of reach for all but the rich.

What is the California we want to live in? Do we want a state of extremes that is only for the very rich and the very poor?  Do we want a state where people live in nice houses next to others living on the street?  If the answer is no, we must support low- and middle-income families.

State and local governments rightly aim most housing assistance and subsidies at low-income Californians – families making significantly less than most in their region, generally 80% or less of the area median income. That help is desperately needed and must be expanded.

But in California’s warped housing market, middle-income families struggle, too – especially lower-middle-income families, generally termed “moderate-income” in state policy. They get much less help – and, we discovered, less attention from researchers and advocates.

We’re talking about folks with what have traditionally been considered good jobs, like teachers and dental assistants. We dug into the available data and just published our findings in a report titled California’s Missing Middle: Middle-Income California is Large, Diverse, and Left Out of the Housing Conversation.

We found that middle-income Californians broadly and the lower-middle-income segment specifically are incredibly diverse. Lower-middle-income families are 60% nonwhite. But some of what we learned is worrisome – both the data that’s available and the data that isn’t.

From 2000 to 2019, while the numbers of low-income and high-income Californians grew, the number of middle-income Californians shrank. That decline was entirely in the lower-middle-income category, which cratered by 35%, from 6.7 million to 4.3 million.

What happened? Did these families leave the state in search of affordable housing? Did they change income brackets? No one knows.

We know too little about middle-income California and its housing challenges. We have only the crudest demographic information and don’t know how well current housing programs serve them.

But we do know that homeownership rates have dropped for middle-income Californians, and again that drop is concentrated in the lower-middle-income segment. The number of lower-middle-income households who were homeowners with a mortgage imploded from 2000 to 2019 — down 42%. Homeownership rates for Blacks, Latinos and certain groups of Asian Americans have dropped alarmingly and remain far lower than for whites – in part a legacy of past redlining and discrimination.

We also know that millions of Californians – including 11% of middle-income Californians — are “cost-burdened,” paying more than 30% of their income for housing. Asian, Black and Latino households are more likely to be cost-burdened than whites.

To fix this, we need more research into middle-income Californians and their housing challenges. And we need advocates and policymakers to recognize that effective housing policy can’t be treated as a zero-sum game in which gains for moderate- and middle-income Californians come at the expense of low-income Californians. Together, these groups add up to more than 30 million people. We need a united housing movement that works for all of these families.

If we unite behind land use reforms, renter protections, and policies to make homeownership more accessible and affordable, we can ensure all Californians have a decent place to live, and that those who want to own their own home can do so.

Adam Briones is CEO and Greg Magofña is Chief Strategy Officer of California Community Builders, a nonprofit organization that seeks to close the racial wealth gap by focusing on the core issue of housing and homeownership.