Study Reveals California Housing Production Far Behind Demand

Industry News,

The Public Policy Institute of California released a new study, “New Housing Fails to Make Up for Decades of Undersupply,” which concluded that California “added 3.2 times more people than housing units over the last 10 years” and “there are now 2.93 Californians for every occupied housing unit, behind only Utah (3.09) and Hawaii (2.93), and far above the average of all other states,” cites the state’s Legislative Analyst’s Office which reported “the state should have been building 70,000 to 110,000 more housing units beyond what it actually built in each year from 1980 to 2010,” but “average annual production has actually slowed, from 147,000 per year in the first decade of the century to just 71,000 per year since.”

The study further concluded that the “state’s exorbitant housing costs have long been driven by too many potential buyers chasing after too few houses. The typical home value in California is considerably more expensive than in the rest of the country, and while incomes here are also higher, they are not high enough to match. Rents are also high, with California renters spending a larger share of their income on rent, and vacancy rates are consistently lower in California than elsewhere.”