The news media are taking notice of these realities — and the impacts they’re having on affordability.
Both Forbes and the Huffington Post today published articles about the high cost of rental housing in California, and last week, the Sacramento Bee reported a steep decline in homes for sale.
According to the Huffington Post piece, the Golden State has the least affordable rental housing on the mainland United States. The Post cites the National Low Income Housing Coalition’s annual report.
The California Apartment Association sees how the dots connect and some possible solutions.
“This is a basic issue of supply and demand,” said Beverly Kenworthy, executive director of CAA’s Los Angeles Division. “The regulatory environment and anti-development strongholds in major cities are a major part of the problem.
“We need to start changing the dialogue from lack of affordable housing to lack of available housing.”
The Forbes piece says that rents in California are unaffordable to those in the bottom 25 percent income bracket — a fact attributable, in part, to low vacancies.
The article says the availability of apartments in Oxnard, Los Angeles, Bakersfield, San Francisco and San Jose are substantially below the nation’s average.
“We can expect inflation adjusted rents to continue to rise in these cities, making housing affordability even worse,” writes the author, Richard Green.
Kenworthy also worries that the housing situation will continue to deteriorate, but offers some ideas to change the culture.
“It’s only going to get worse unless we prioritize infill development in our major cities and offer real incentives for set asides that cannot be challenged by NIMBY groups,” Kenworthy said.
As with a scarcity in rentals, fewer homes are being listed.
An article in the Sacramento Bee last week reported the number of Sacramento homes on Zillow had dropped by nearly half last month, compared with the same time in 2012. Los Angeles, San Francisco and San Diego also saw steep declines.
Joshua Howard
With fewer homes for buyers, and fewer apartments for renters, the pressure on prices is mounting.
Joshua Howard, executive director of CAA’s Tri-County Division, offers some perspective.
“Competition to buy homes is tough, especially in Northern California. One example, a 1,136-square-foot home was listed for $829,000 and sold for $1.02 million,” Howard said. “Rental housing is still the most affordable type of housing we have — and doesn’t require one to come up with a $100,000 upfront payment.”
Howard pointed out that while the Silicon Valley has experienced job growth — 7 percent since 2010 — the housing stock hasn’t kept pace.
“While demand for rental housing has risen,” he said, “the supply side has only recently been increasing.”