Everyone knows that California has a severe shortage of housing, but studies released this week illustrate just how dire the situation has become. The three reports were prepared by Beacon Economics and released by Next 10, a nonprofit group founded by Bay Area venture capitalist F. Noel Perry. The findings suggest that Californians are finding home ownership increasingly unattainable, with middle- and lower-income earners are literally being priced right out of the state.
Beacon found that, in 2014, California ranked a miserable 49th in homeownership rates among states, with less than 54 percent of homes occupied by their owner. The state also finished dead last in overall affordability, with prices in Los Angeles County rising 6.5 percent over the last year, according to pricing data from CoreLogic. As a result, Californian homeowners spend the highest amount of their annual income—25.4 percent—on housing.
Compounding the problem is a startling lack of construction. The studies found that, between 2005 and 2015, permits were filed for only 21.5 units of housing for every 100 new residents of the state. This has led to increased rental prices and more cases of room sharing. (LA is home to some of the US's most crowded zip codes.)
And so the unaffordability of homeownership has helped drive up the rental burden—while homeowners spent about a quarter of their income on their housing, renters in California spent on average 36 percent of their incomes on their housing (the numbers for Los Angeles are far higher), more than only two other states. Even scarier, that share shot up from an already high 28.1 percent in 2000.
- High Housing Costs Are Driving Californians Out in Droves [Curbed LA]
- New report says California needs more housing [LA Biz]
- Current State of the California Housing Market [Next 10]
- How Much Does Los Angeles Have to Build to Get Out of Its Housing Crisis? [Curbed LA]
- Everything Wrong With Los Angeles Housing, In One Graph [Curbed LA]
- 58.5 Percent of Los Angeles Renters Can't Afford Their Rent [Curbed LA]