How California Can Effectively Address its Housing Crisis

April 26, 2022

New polling by UC-Berkeley and the Public Policy Institute of California shows that Californians remain deeply concerned about housing costs – the topic of a recent Little Hoover Commission report that included recommendations for addressing the problem.

In a new poll by UC Berkeley’s Institute of Governmental Studies, 31 percent of California voters said housing affordability is the most important issue for the state to address. Voters ranked this crisis above fifteen other issues facing the state, including climate change, income inequality, and homelessness.

PPIC’s March statewide survey found that 64 percent of Californians said housing affordability is a “big problem.” In fact, in that same survey, “a record-high 46 percent of Californians say the cost of their housing makes them and their family seriously consider moving.” Most of those Californians – 37 percent – said they would move outside of California.

With a shortfall of two to three million homes in the state, Californians are paying record prices for shelter – and the consequences are devastating. Long commutes, which emit more harmful greenhouse gas emissions into the atmosphere, have become the norm for many workers pushed further and further away from their jobs by exorbitant prices. The dire lack of housing options make Californians four times more likely to live in crowded housing than the average American. When taking the cost of living into consideration – of which the cost of housing is the primary driver – California has the highest poverty rate in the nation.

To their credit, state leaders have made historic commitments to combat this dilemma. In the past three state budgets, Governor Newsom and the Legislature dedicated billions of dollars to promote affordable housing. Yet most of this funding is directed toward rental housing rather than homeowners. While supporting renters is crucial, homeownership is how most Americans build and pass on wealth to their children.  

There’s a better pathway forward to promote housing affordability today and for generations to come. In its new report, California Housing: Building A More Affordable Future, the Little Hoover Commission provides targeted actions state leaders can take immediately to address the state’s housing crunch:

Emphasize affordable home ownership and increase the housing supply. California must expand its affordable housing strategy – both in policy and funding – to put a greater emphasis on affordable home ownership. Such an emphasis, however, is counterproductive without simultaneously increasing the state’s supply of housing. By treating the housing shortage with the same urgency as the state’s wildfire emergency, leaders can jumpstart affordable housing production in communities throughout the state.  

Consolidate housing functions. California’s housing departments are currently spread across four main agencies under the purviews of the governor and state treasurer, causing critical inefficiencies and service gaps. Consolidating these services would allow the state to better create an affordable housing strategy, improve everyday operations, and streamline the process for developers interested in affordable housing.

Identify data and analysis gaps. Thanks to antiquated state technology, policymakers too often lack key pieces of information that would provide a complete picture of the state’s housing problems and potential courses of action. By using the best technology and methodologies available, California should collect and analyze the housing data it needs to inform policymaking and share those tools with local governments either at-cost, or preferably, for free.

Reconsider how to measure local governments’ housing progress. The state’s Regional Housing Needs Assessment, which determines how much and where housing needs to be built, fails to consider how much housing is actually built in California communities. Including the number of units constructed – as well as how those units factor into California’s larger climate goals – will hold local jurisdictions accountable for the progress they make toward vital housing goals.

Enforce housing requirements more effectively. A housing ombudsman should be appointed in each county to approve affordable housing projects when local jurisdictions are noncompliant with their housing plans. Along these same lines, the Governor should direct the newly created Housing Accountability Unit within the Housing and Community Development to develop reasonable standards for when the state should sue noncompliant localities.

Invest in shared equity models. The state can make housing accessible to a greater share of Californians by investing in shared equity housing, wherein the government or a nonprofit subsidizes the purchase of a home. As part of this effort, California should place a particular emphasis on the participation of individuals from groups historically excluded from home ownership.  

Tackling California’s housing crisis is possible. The Commission’s recommendations will help policymakers address the state’s housing shortage and build a more affordable future for everyone.

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