Housing Crisis

There is a growing problem in America in which it is incredibly expensive to live in  certain places, people allocating a very large, sometimes the majority, of their income on rent.

The housing market is looking dire for people, and there is a growing problem with home ownership, despite the growth of demand.

These problems also disproportionately affect minorities, and the insufficient supply of affordable housing is an immediate problem that needs to be addressed.

While the housing market is recovering, there is still a shortage of affordable options.

• The number of new housing units does not match what was being built in the past.
• There are upticks in housing prices that cause ownership levels to drop, especially for minorities.

Renters can pay more than 50% of their income for housing, and the number of these has risen tremendously since the recession, about 6.7 million over the decade.

There is difficulty addressing this problem in our policy.

• The government does offer housing relief for the poor, however these programs address a very low proportion of the population.
• Wait lists for housing are high.
• Inclusionary zoning is a method of addressing this problem, but does not help the vast majority of people.
• Very little has been done in actually addressing affordability for lower-income households, especially in California.

In the past, like New York in the 1800s, overcrowded housing options were a significant problem.

The housing/suburban boom helped alleviate this issue, but overcrowded housing has been a problem throughout history.

Housing Crash in 2007

• After the housing crash, the problems that lower-income and family households faced were even further worsened.
• The luxury housing market has seen the most growth, and middle-class families face a deficit in options.

Before the crash, at the peak of the bubble, housing was at 49 percent, but dropped to 42.5 percent, which is a incredible loss. This affected not only homeowners, but real estate agents, lenders, sellers, and it also affected the economy.

California and its Unaffordability

Because of restrictive land use policies starting in the 20th century, California home prices rose significantly compared to the rest of the nation.

Housing prices are skyrocketing again in the present, and the inequality is looking to be even worse than in the past.

Middle class families in California are completely barred from home ownership, but this also affects those at a national level.

Average impact fee in California for single-family residences is 31,100$ per unit, 90% higher than the second most expensive state in the nation. This makes it extremely difficult for minority households and first time home buyers.

Proposed Solutions

Reform Land Regulations

• Counter the impact of land use policies.
• Restore a competitive market.
• Automatic mechanisms to liberalize the urban fringe land supply.

Reform and Reduce Impact Fees

• Make it possible for suburban development to proceed without burdening municipalities.

Establish Special Housing Districts

• Make these districts on or beyond the urban fringe.
• Sponsored by counties.
• Remove the need for up-front payments.

Re-use Vacant Commercial and Industrial Space

• Convert commercial buildings to residential use.

Make Government Land Available for Development

• Land that is not immediately useful or needed should be used for development, and make a more competitive market for land

Re-Order Local Planning and Zoning Priorities

• Housing affordability needs to be the principal purpose of planning, and affordability monitoring can be put into place to increase public awareness

Kotkin, Joel, and Wendell Cox. “AMERICA’S EMERGING HOUSING CRISIS,” n.d. https://nationalcore.org/wp-content/uploads/2022/01/HousingCrisis-Report.pdf.

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