State leaders need to act on housing crisis in 2021

Residential housing units under construction. (Photo: Orange Grove, via Shutterstock)

 “It’s time for California to say yes to housing,” Gov. Gavin Newsom boldly declared at his 2020 State of the State Address.

The governor was right. But in 2020, the Legislature’s answer to our housing crisis was to say no to housing.

Even before the COVID-19 pandemic hit, millions of Californians were struggling to make ends meet. Our state’s high cost of living is driven in large part by exorbitant housing prices. Skyrocketing rents and record-high home prices are forcing many families to make the heart-wrenching decision to leave our state altogether.

Californians of all backgrounds are calling out for action: We need housing now.

Fortunately, the solution is clear. California needs to build more homes to stem our housing crisis.

The challenge we face is stark. California has the second lowest home ownership rate in the nation. Less than one-third of Californians can afford to buy the median-priced home, compared to more than half of households nationwide. That median-priced home reached north of $700,000 by mid-September, more than double the national home price.

It was our hope as REALTORS® that in 2020 the legislature and Gov. Newsom would take action to usher in a new housing era for California. 2020 was supposed to be the year of housing production.

Even with COVID-19, the Legislature recognized that housing could not wait and introduced several good bills. The California Senate housing bill package introduced last year is a good example, but not one of the bills made it to the governor’s desk. Those proposals included: streamlining the developer permitting process, rezoning land for commercial property to housing development, allowing more duplexes and responsibly reforming certain CEQA requirements.

That’s not to mention the bolder reforms that started off the year, like state Sen. Scott Wiener’s Senate Bill 50, which would have brought more housing around transit centers and employment hubs.

None of these proposals would have completely solved California’s housing crisis, but they would have moved our state in the right direction.

As the governor has said multiple times, this crisis is not hard to understand. There is simply too much demand and not enough supply. It’s estimated that our state is short 3.5 million housing units, meaning there should be 180,000 new units built every year to keep up with demand. We’re currently only producing two-thirds of that.

Since the beginning of this year, 72,300 homebuilding permits were issued in the state, nearly 10,000 fewer permits than this time last year. Half of this nation’s housing need is in California, but we are unable to keep up with the growing demand.

We can’t seem to fix this crisis because both state and local governments have created too many obstacles to building new homes, namely high developer fees, a complicated and confusing patchwork of county, city and state requirements and antiquated zoning laws.

The Legislature’s inaction is hurting millions of Californians and threatens our state’s future as a global economic leader.

Just last year, more than half of Californians said they were considering leaving the state due to high housing costs. And now with working remotely becoming the norm, many people have packed up their bags in search of a more affordable place to live. COVID-19 has only made matters worse, forcing homeowners and renters alike to choose between the place they’ve called home for decades and places where their money goes farther.

It’s time to build more housing so Californians at all income levels can afford to call the Golden State home.

There is a lot of work to be done. REALTORS® look forward to working with all those who share our goal for more housing for all – including state legislators and the governor – to help solve the state’s housing shortage. 2020 may not have been the year for housing production, but 2021 must be. California’s future depends on it.

Editor’s Note: Dave Walsh is a San Jose real estate broker and president of the California Association of REALTORS®.



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