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91
CALIFORNIA
California Faces Affordability Challenges
California has the highest poverty rate in the nation, according
to an analysis from the U.S. Census Bureau, and according to Texas
Public Policy Foundation VP Chuck DeVore on Forbes, California's
new rent control law will likely make things worse.
"California's new housing stock has been severely restricted by
the state's myriad of web of development fees, restrictive zoning
rules, environmental laws—including greenhouse gas restrictions—
and lawsuits," DeVore said. "Now it's about to get much worse, with
statewide rent control further discouraging new investment in the
state."
DeVore notes that the bill also strengthens already-strong tenant
protections, now barring property owners from pursuing evictions
without a government-approved reason. e California Association
of Realtors said that the bill will "…impose onerous standards upon
small property owners and, in turn, exacerbate the state's housing
crisis."
"In 2018, California builders started construction on 116,400
single and multi-housing units, likely not enough to accommodate
demand with what was expected to be about 125,000 new house-
holds in the state," DeVore notes. "At this rate, it would take build-
ers 122 years to completely turnover the state's 14.3 million housing
units. California's 2018 construction starts were 31% below the state's
historical average since 1960."
ere is good news for homeowners and buyers in California,
though. CoreLogic reported that home sales in July grew from the
year prior for the first time in a year. Growth was motivated by
lower mortgage rates. Home prices across the state were less than
2% above last year, and prices in the Bay Area fell annually for the
third-consecutive month.
e nine-county San Francisco Bay Area saw the purchase of
7,404 new and existing houses and condos, which is a 2.2% year-
over-year decline. Median-sales prices, though, fell 4.1%—the
largest decline December 2011's 10.5% drop.
e report finds that an estimated 42,432 new and existing
homes and condos were sold in July, which is a 5.1% increase from
June and up 1.8% from July 2018. CoreLogic, however, stated that
housing activity usually declines, with the average decline for the
two months being 5.3%.
