Thursday, January 5, 2017

California New Housing Shortage Hits 100,000 a Year

It’s no secret that California is grappling with a housing shortage, but a new report quantifies how serious the problem is.


California represents 18% of new home starts needed to reach the magic number of 1,000,000 starts in the US. And just like the rest of the country there is not enough new starts in the pipeline to meet it.

regs zzz.jpg

Developers are building an average of 80,000 new California homes a year, but that falls well below the 180,000 that are needed, according to the California Department of Housing and Community Development. What is very interesting is this department actually acknowledges the state and local building code departments are the main problem.

The department’s “California Housing Future: Challenges and Opportunities” report shows new home construction is being constrained by a variety of factors, including regulatory barriers, high permitting costs and diminishing public resources.


California will need more than 1.8 million additional homes by 2025 to keep pace with the state’s ever-growing population. The state housing and community development department and state Department of Finance determined the state’s housing need based on population projections of 50,000,000 people and household formation data.

What happens in California happens eventually in the rest of the country.

Not sure what you think but I see modular home construction playing a huge part in helping to solve the crisis.


Anonymous said...

Their code is extremely aggressive, and I can see how that would slow the building process. Agreed that modular construction will play a huge role in generating new housing, hopefully that construction takes place in the US.

Steve L said...

I live in California. I agree new building codes for SFR are onerous. Site builders prefer the high end market over affordable housing. New law for them deal with Inclusion laws (15% dedicated units gift to below market rate hosuing) if they want their development approved.

CA State trying
Two new 2017 laws became enacted:

1. No Place like Home ($2billion to build homeless shelters)
2. ADU/Tiny House State approval for local building code to allow backyard homes