These are some of the issues behind California’s housing crisis
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In a state known for innovation and at a time when technology and entrepreneurship are main drivers of our economy, it is frustrating that the solutions to our burgeoning housing crisis are taking far too long to develop and implement. But let’s be frank, that should surprise no one, given that the problem has been decades in the making.
Years of restrictive planning, layers of time-consuming local and state regulations and painfully slow recognition by leaders of the depth and breadth of the housing crisis have all conspired to get us to where we are today: An eroded quality of life for millions who are paying more than they should for housing, not to mention a disgraceful epidemic of homelessness and despair.
The state and many cities have taken bold steps that have sown the seeds of reform and change. For example, Los Angeles with its successful measures H and HHH offer rays of hope. Even so, the time frame for construction and occupancy of these publicly funded units is painfully slow and ridiculously expensive.
With the cost of producing a single unit of multi-family housing exceeding $700,000 in some areas, the equation is simple: We must find ways to be more efficient with the scarce but essential affordable housing dollars. By the same token, it will take a long-term commitment to meaningful reforms if policymakers are going to facilitate a needed and sustained boom in construction of market-rate housing that is affordable to working- and middle-class Californians.
California has a lot going for it. Our economy is strong and the demand for housing is high. Unleashing our considerable market forces and directing them at the housing sectors most in need (anything but “luxury housing”) should be achievable. We have a long tradition of innovation and reform. The explosion of affordable-to-build accessory dwelling units that followed key 2016 legislation demonstrates this.
One important and largely untapped manufacturing innovation that also leverages California’s own housing market demand is modular housing. Prefabricated modular housing achieves numerous efficiencies that help lower construction costs. We have virtually unlimited in-state housing demand, copious technical know-how and ample resources. In areas like the Central Valley and Inland Empire, rapid growth in the modular housing manufacturing sector looks to be a major in-state economic development, jobs and housing winner.
Yet, some real estate developers have been importing modular housing from China and other countries. That’s a shame, because a program to incentivize home-grown modular should create local manufacturing capacity that responds to the in-state housing shortage, as well as out-of-state and even international demand. The same rail lines and highways that transport traditional goods around the world will accommodate modular units that are designed to fit on trailers and trains and ships.
In fact, there are a number of modular construction start-ups in the state that are slowly ramping up production. We should help this industry mature faster and more strategically.
Lasting change will take time, persistence and patience. As a recent report commissioned by California Forward points out, the notion that we can end the current housing shortage by 2025 is highly suspect. That is why tenant protections to ease the impact on impossibly rent-burdened individuals are so important. It is also why we must think long term and strategically.
Our motto “Eureka” – “I have found it” – proclaims that Californians of all stripes are, by nature, optimists and problem solvers. But, like all humans, we are prone to forget. When the day comes that we have achieved housing equilibrium, we should have in place a matrix of housing policies that lift every Californian up, while also preventing us from again falling into the abyss.