In recent months the Vanguard has been focusing on, in addition to the local housing crisis, the issue of California’s overall housing crisis. The legislature last week passed a package of 15 bills aimed at increasing housing – in a state where the estimated need is about 1.8 million new units over the next decade.
As Dan Walters wrote back in May: “Soaring housing costs are distressing millions of Californians, forcing them to devote 50 percent or more of their incomes to shelter. It hits the working poor particularly hard, gives us the nation’s highest poverty rate and threatens the economy.”
A report in August found, “Nearly 70 percent of poor Californians see the majority of their paychecks go immediately to escalating rents.”
Some have suggested that California will not solve its housing crisis until and unless it addresses the “elephant in the room” – illegal immigration.
As one poster put it: “[T]he housing problem will never go away in California as long as we have policies in place that welcome illegal immigrants.”
But there are problems with that claim, and the available data does not seem to back up the claim that immigration is behind the housing crisis.
First of all, the number of unauthorized immigrants declined slightly, from a high point in 2007 of 12.2 million down to 11.3 million. The number of new immigrants declined during the Great Recession and, if anything, has increased only this year.
Second, and perhaps more importantly, the data from California’s population since 2010 suggests a supply problem with housing, rather than a demand-driven crisis.
Dan Walters wrote in May: “California has seen a relatively modest population growth, 2.3 million or 6 percent, since 2010, but has added just 400,000 housing units, a 2.9 percent increase.”
In other words, the state itself is growing since 2010 at a rate of less than one percent per year (which is lower than Davis’ advertised rate) but has been adding housing at less than half that.
The new housing data seem to support that contention.
“Los Angeles saw its population grow by 6.5 percent in 2010-17, but its housing stock increased just 4 percent.”
“Other cities’ gaps were as bad or worse. San Diego: 8 percent population growth, 3.9 percent housing growth. San Francisco: population up 8.6 percent, housing up 5.9 percent. San Jose: 10.7 percent more people, just 5.7 percent more housing. Sacramento: population up 5.7, housing up 1.1 percent.”
In other words, the data suggest that this isn’t a growth demand issue, it is a supply issue.
The third problem with the theory is that the pressure for housing seems to be coming from the wrong place to be driven by undocumented immigration.
A report in the San Jose Mercury News from late August bears this out. The exploding cost of housing is forcing home prices to absurd levels. We wrote a few weeks ago that in the Silicon Valley people making $160,000 are having trouble affording housing.
The Mercury News reports that “even extremely high incomes aren’t enough to blunt the cost of housing. In San Jose, where the current median income is nearly $100,000, renters can still expect to pay 40 percent of their monthly income on rent, according to an analysis by the real estate data firm Zillow.”
That is clearly not a trend driven by unauthorized immigration.
The problem, the Mercury News reports, is one of gentrification.
They write, “It’s difficult to measure things like ‘gentrification’ and ‘displacement’ – when the arrival of higher-income, higher-educated residents in a community results in the expulsion of longtime lower-income residents. But there’s little question change is happening rapidly across many California cities.”
They cite research out of UC Berkeley which “found that more than half of low-income households in the Bay Area are at risk of, or already experiencing, gentrification. It’s not just lower-income communities bleeding households – higher-income neighborhoods are losing their lower-income members as well. And in places like the Boyle Heights neighborhood of Los Angeles, gentrification protests have exposed escalating tensions between longtime Latino residents and new, predominantly white arrivals.”
Those low-income people who are being forced out are leaving the state.
“From 2000 to 2015, the state lost nearly 800,000 residents with incomes near or below the poverty line. Nearly three-quarters of those who left California since 2007 made less than $50,000 annually. The leading destination for California’s poor? Texas.”
Again, these people are not being forced out by an influx of immigrants, they are being forced out because higher-income earners are not finding enough housing and are bleeding into lower-income neighborhoods.
Bottom line, California’s population really isn’t increasing at a huge rate. The one percent growth rate we have seen since 2010 is on par with the mandated growth rate of Davis – a slow growth community. The problem is that housing is increasing at less than half the rate.
Will the new legislation lead to an increase in housing? That remains to be seen. But the data we see doesn’t point to unauthorized immigration as the culprit.
—David M. Greenwald reporting