To Make Homeownership Affordable in California, Rethink the Suburbs
California’s future as a place of aspiration is fading for all but the wealthiest residents — with that promise nearly out of reach for young people and new immigrants.
This state has become a place marked both by spectacular successes and by not-so-welcome superlatives. The rise of the tech giants, engines of wealth creation, coexists with the nation’s highest cost-adjusted poverty rate, the second-lowest rate of homeownership among the states and the greatest concentration of overcrowded housing in the nation.
Unfortunately, against this backdrop, California’s leaders have adopted state and local policies that further reduce the prospect of homeownership for most Californians, particularly millennials. These policies largely cut off new development on the urban fringe and steer most new housing into the high-cost, congested coastal areas.
In a drive to promote density and transit use, the state has also disfavored the kind of housing, especially the single-family variety, that many aspire to own, particularly in the pandemic. Worse, this trend works against upward mobility for the working class, because homeownership remains the predominant means by which the non-rich build assets.
Urban planners are right to say that the solution lies in more housing production. But the kind of housing they favor — generally expensive, small and densely packed — does not necessarily reduce prices. Patrick Condon, a professor at the University of British Columbia, for instance, has shown that upzoning (allowing more units in residential zones) in the city has not resulted in less expensive housing in Vancouver, which is one of the most expensive cities in North America.
And then there is the matter of market preference. Even before the pandemic, population growth had slowed significantly in the Los Angeles metro region, with growth soaring in the Inland Empire. Overall, the fastest growth in the last 10 years took place in San Benito County, south of Silicon Valley, and in San Joaquin County. Since the pandemic, this pattern has intensified, with San Francisco, Los Angeles, San Diego and Santa Clara counties all losing population while growth continued farther east in Riverside, Fresno, San Joaquin and San Benito counties.
Exurbs, once written off by urban experts as the country’s “new slums,” are now nationally the fastest-growing areas in the country. The only California metro area listed among the 10 most attractive to millennials, according to the National Assn. of Realtors, is, of all places, Bakersfield.
Rather than push more people into the least affordable areas, perhaps it’s time to revisit suburban and even exurban housing. Over the last decade many new projects have been held up because of regulatory entanglements and environmental and other lawsuits. Major developments like the Tapestry project in San Bernardino County (15,000 new homes marketed to first-time buyers) and the Tejon Ranch, located 70 miles from L.A. and slated for 35,000 homes at build-out, could help relieve housing pressures on urban and inner-ring suburban areas.
But under current regulations, such developments, even after getting local approvals, can take decades to move forward. By contrast, Texas, with one-quarter fewer residents than California, has permitted more than twice as many new housing units this year and has no housing crisis. Tennessee, now one of the 10 most popular destinations for transplants from California, issued permits for nearly 50,000 housing units in 2020, about half the number issued in California, despite having only one-sixth the population of California.
The lack of affordable housing and policies that constrict housing development hit younger working- and middle-class people — including people of color — hardest. These are groups starting out, trying to build assets and financial stability. Indeed, 95% of all new suburbanites over the last decade were people of color.
Read the rest of this piece at Los Angeles Times.
Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.
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