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Homeownership in California lowest since the 1940s, finds report

The state has been adding just 80,000 new homes a year when it needs 180,000

California tract housing Shutterstock

While San Francisco is often portrayed as the epicenter of housing unaffordability on the West Coast, the issue is truly pervasive to California as a whole. A draft report from the state’s Department of Housing and Community Development found that a dramatic housing shortage is pushing up prices, increasing sprawl, and lowering the quality of life for residents.

Nearly a third of California’s renters—more than 1.5 million households—spend more than half of their income on rent. And the state’s overall homeownership rates haven’t been this low since the 1940s.

Unsurprisingly, a major factor in rising housing costs is insufficient construction. The state report found that about 180,000 new homes need to be built in California each year to meet demand, but an average of just 80,000 have been built annually over the past decade. Without measures to stimulate the construction of more affordable abodes, this gap will only get worse as the state’s population continues to grow. By 2050, California’s population is projected to increase from 39 million to 50 million people.

Possible solutions for the state’s housing crisis range from investing in modular construction (like the U.K.) to using taxes on second homes to finance low-income housing, making it easier for cities to permit additional housing projects.

Via: Construction Dive, LA Times