My View: Housing Is Not Just a California Problem Anymore

By David M. Greenwald
Executive Editor

The anti-housing advocates can breathe a sigh of relief—it turns out that not only is housing not just a Davis problem, it’s also not just a California problem.  Unfortunately for them, that doesn’t mean we don’t have to do anything about it locally—it just means that we can’t rely on the rest of the country to pick up our slack anymore.

Those voters of Davis who were surveyed selected the lack of affordable housing as by far the most important problem facing the city of Davis.

This week the NY Times reported, “San Francisco, Los Angeles, New York and Washington have long failed to build enough housing to keep up with everyone trying to live there. And for nearly as long, other parts of the country have mostly been able to shrug off the housing shortage as a condition particular to big coastal cities.”

Instead they found it to be “an increasingly national problem” that “has consequences for the quality of American family life, the economy and the future of housing politics.”

In 2012, much of populated California had housing surpluses.  Now only extremely rural and remote counties have them and much of coastal and the southern part of the Central Valley from Sutter County down to Kern have housing shortages—some of them severe.

But it’s not just California.

The Times reports, “What once seemed a blue-state coastal problem has increasingly become a national one, with consequences for the quality of life of American families, the health of the national economy and the politics of housing construction.”

They add, “Today more families in the middle of America who could once count on becoming homeowners can’t be so confident anymore. And communities that long relied on their relatively affordable housing to draw new residents can no longer be so sure of that advantage.”

Freddie Mac now estimates that the nation has about a 3.8 million housing unit shortfall.

Up For Growth, a Washington-based policy and research group focused on the housing shortage, claims that deficit doubled from 2012 to 2019.

Their just released report found that 47 states and the District of Columbia had worsening supply.  Of the 310 metro areas across the country, “supply was dwindling or shortages were growing worse in three-quarters of them heading into the pandemic.”

“Our nation faces a severe housing affordability crisis that urgently requires investment in housing supply with an eye toward eliminating longstanding barriers to housing opportunity for underserved communities,” said Julian Castro, the former Secretary of HUD from 2014 to 2017.

The report found even in Texas, the deficit rose nearly threefold from 2012 and 2019, to 322,000 homes.

In places like Arizona and Georgia where there was almost no housing shortage in 2012, the shortage has surged 14 and 27 times, respectively.

“If we don’t solve this deficit, particularly now with other headwinds, America’s housing underproduction is likely to get worse,” said Mike Kingsella, chief executive officer of Up for Growth. “More and more folks will have to drive farther and farther to find housing that they can afford.”

The reasons for this problem vary.

For example, as we are familiar, in places like Sacramento, the problem is underbuilding—as it is in much of California.

“In Los Angeles, for instance, which is the most underproduced metro in the country, it’s lacking 8.4% — nearly 400,000 homes missing across the region,” Kingsella told NPR this week.  “It doesn’t have to be this way, is a key message coming out of this report.”

But in St. Louis, restrictive zoning has prohibited the construction of more homes.  Kingsella said that many cities need to change their zoning laws.

In Detroit, the problem is a huge stock of housing is not inhabitable.

NPR interviewed Mark Zandi, the chief economist of Moody’s Analytics.  He estimated the shortfall to be closer to 1.6 million homes.

“It’s very difficult to know precisely what the shortage is,” Zandi says. “But the bottom line is, no matter what the estimate is, it’s a lot of homes that we’re undersupplied.”

He further added that “there’s no doubt that many more homes need to be built to ensure that housing becomes more affordable, whether it’s rental housing or homeownership.”

One of the interesting and sometimes frustrating discussions is what it means to have a housing shortfall.

The Times points out, “There are not, for instance, 400,000 households’ worth of homeless people on the streets of metro Los Angeles.”

Instead, “many people in need of housing there are doubled up with family or living in makeshift garages. A healthier housing market looks like a place where those people would be able to find and afford a home of their own.”

“It looks like the ability to live where you want to work,” said Mike Kingsella. “It looks like not having to worry about housing instability. It looks like a reasonable chance of eventually buying your own home.”

But these estimates are probably the tip of the iceberg.

For instance, “The cost of housing in the highest-paying, most productive parts of the country deters people from moving there (or forces existing residents to move away).”  So, “If Los Angeles had built an extra 400,000 homes over the past decade, it would be more affordable today. And that might lure more people there, driving demand for even more housing.”

As we know, that feeds the anti-housing advocates to discourage housing because it might encourage more housing.

On the other hand, it’s not just supply that’s a problem.

The Times noted, “Other forces like widening income inequality also worsen housing affordability, said Chris Herbert, managing director of the Harvard Joint Center for Housing Studies. That’s because more higher-income households compete for limited housing (prompting builders to build high-end homes).”

“That’s not to say that the supply story isn’t important,” Mr. Herbert said. “But it’s intersecting with other factors that are driving housing prices up.”

Bottom line is we need more housing—but housing is both a cause of and symptom of larger problems.