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CA Must Build Millions Of Homes By 2030 To Address Housing Crisis

Patch logo Patch 3/4/2022 Daniel Hampton
Aerial view middle class neighborhood in South California, USA © Getty Images/iStockphoto/Thomas De Wever Aerial view middle class neighborhood in South California, USA

LOS ANGELES, CA — California must build millions of homes by 2030 to address severe housing supply and demand challenges.

That's according to a new report published Wednesday by the California Department of Housing and Community Development, which is updated every four years and outlines challenges and strategies to address the state's housing crisis over the next decade.

In its 2020 update, the report said California has a required goal of adding at least 2.5 million homes over the next eight years. Of those, at least 1 million must be targeted for lower-income households.

That number represents homes that cities and counties must zone for by law. It's also more than twice as high as the housing planned for in the last eight-year cycle.

  • Very Low Income
    • 643,352
  • Low Income
    • 384,910
  • Moderate Income
    • 420,814
  • Above Moderate Income
    • 1,051,177

“We need new construction of all (housing) types," Megan Kirkeby, deputy director for housing policy at the state Department of Housing and Community Development, told The Orange County Register. "We lag behind where we need to be.”

The plan seeks to help everyone from renters to lawmakers, officials said in a news release.

"Even in a time of economic growth and record employment, too many Californians are experiencing the squeeze of stagnant wages and the rising price of building-block necessities such as housing, health care, education, and child care," Gov. Gavin Newsom said in a statement.

The report comes after decades of soaring housing and rental prices. In August 2021, the median sales price of a single-family home reached a record high of over $827,000, the report said.

“High housing costs threaten the California dream,” Kirkeby told CBSLA.

And housing prices in California continue to climb, exacerbated by extreme supply and demand challenges.


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A Housing Crisis Decades In The Making

California’s housing crisis didn't happen overnight. It comes after a half-century of housing underproduction, underscored by exclusionary policies that left housing sorely lagging behind what was needed, and sending costs soaring.

Millions of Californians were severely affected, and lower income and people of color were disproportionately impacted.

Now, one in three California households don't earn enough money to meet basic needs, including food, health care, child care and transportation.

Other factors contributing to the housing crisis: opposition to neighborhood change; numerous varied and opaque regulatory hurdles; insufficient amount of land zoned and available for housing; lacking federal support; and pricey building costs, among other factors.

In the previous housing need cycle, which ends in 2024,the state set a goal of 1.2 million new units. As of 2020, just over 588,000 units were built, or about half of what was needed.

"While there is still time to close the gap between housing need and housing supply in the previous housing cycle, it is anticipated that the state will fall short of its housing goals – particularly in the construction of housing units for lower-income Californians," the report said.

Ensuring More Houses Are Built

In the new housing need cycle, the state is requiring local governments to plan for more housing — and insisting that a much larger share of planned units are built.

The state outlined what it called " bold and urgent" actions to ensure this happens, including passing laws to streamline development and increasing funding for affordable housing. It also plans to enforce housing laws.

It also listed three objectives for the next 10 years: keeping Californians in their homes, producing more affordable and climate-smart homes, and addressing homelessness and housing need.

“We don’t want to see people on the streets, we don’t want to see the tent cities, we don’t want to see this crisis that has just gone far, far out of control,” Kenra Lewis, executive director for the Sacramento Housing Alliance, told CBSLA.

As California Patch previously reported, a bill introduced in the State Senate last month would reduce costs for affordable housing projects by shifting reserve money from individual projects to a state-operated pooled reserve.

Senate Bill 948 would shift responsibility for so-called "transition reserves" — which have not been used much for projects funded by the Department of Housing and Community Development — from individual projects to the state.

Matt Schwartz, president and CEO of the California Housing Partnership, said the legislation would "immediately reduce costs while protecting tenants and ensuring long-term solvency of affordable homes."

"The creation of a systemwide insurance policy to replace large reserves previously locked into individual properties will effectively repurpose tens of millions of dollars a year to help create more affordable homes," he said.

Last year, Newsom signed some of the biggest housing bills in years. One would allow more than one house to be built on single-family lots, which comprise the vast majority of the state's developable land.

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