Consider these facts from the California Building Industry Association:

• The Department of Housing and Community Development estimates that California must build an excess of 200,000 homes each year through the year 2020 in order to accommodate the population growth and remain "reasonably affordable."
• The California Building Industry Association estimates the state's housing deficit total to be nearing 1 million homes and apartments in 2003.
• The state Department of Finance estimates that a healthy jobs/housing balance is one new home built for every 1.5 jobs created. California is falling far short of that ratio: Within the last decade, we have built one new home for every 4.0 jobs created.
• In San Mateo County the ratio of new jobs to new housing units is 13.3 to one.
• Recent forecasts from the Department of Housing and Community development predict a steady housing deficit in the Bay Area of more than 12,000 units per year for the next decade. In Los Angeles County the annual housing deficit will be 28,000 units.
• It is estimated that California's population will reach 58 million by 2040 - that means that 24 million more Californians will need a place to call home.

The result of this crunch is some of the highest home prices in the world. Because of the shortage, working people are locked out of housing market:

• California has 9 of the nation's 10 least affordable housing markets.
• Half of all renters pay more than 30 percent of their income toward housing, and nearly 25 percent pay more than 50 percent.
• California's median home price was $324,000 in 2002.
• A family earning the state's median income ($43,800) would need to double its income in order to afford the state's median-priced home.
• Despite a strong desire by Californian's to own a home, homeownership is suffering. The state's recent homeownership rate (58%) is far behind the national average (67.8%).
• And for minorities, the homeownership rate is even worse at just 44.6%.
• California's homeownership rate is the 4th lowest in the nation.
• More than 1.3 million renter households would need to buy homes in order for California's homeownership rate to match the national average.
• Only 27% of households in California can afford the median-priced home in their area.
• A childcare worker in Downtown Los Angeles needs to quadruple his or her income to afford the median-priced home.
• In order to purchase the median-priced home in San Francisco, an elementary school teacher must earn an additional $85,601 each year.
• A firefighter in Monterey needs to earn an additional $82,573 annually to be able to purchase the median-priced home in that area.

And if you think that's bad, just wait. By 2025, an estimated 18 million more people will live in California, squeezing the housing markets even tighter if trends continue.

How did we get in this jam?

A number of factors -- population and job growth, land prices, restrictive zoning, homebuilder liability, development fees, water supply lawsuits, anti-housing ballot box initiatives, NIMBYism and misguided no-growth activism among others -- have conspired to keep the housing industry from meeting the state's needs and satisfying consumer demand.

Survey after survey has shown strong preferences for suburban living, and particularly strong preferences for detached, single-family homes in clean, safe, quiet neighborhoods. American consumers, faced with a variety of choices, are choosing suburban lifestyles.

As Peter Gordon and Harry Richardson, well-known professors of planning and economics at the University of Southern California, wrote in the Winter 1997 Journal of the American Planning Association, "America is not running out of open space, nor in any danger of having cities encroach upon preserves of prime agricultural land. Low density development is the overwhelming choice for residential living."

Home construction has a number of economic benefits:

• The construction of 1,000 single-family homes generates 2,448 full-time jobs in construction and construction-related industries: $75 million in wages and $37 million in combined federal, state and local tax revenues.
• The construction of 1,000 multi-family units generates 1,030 full-time jobs in construction and construction-related industries: $32 million in wages and $15.8 million in combined federal, state and local tax revenue and fees.
• Nationally, housing generates more than 22 percent of the Gross Domestic Product and accounts for 32 to 40 cents of every dollar spent.
• According to the Construction Industry Research Board, in 2000 - even as housing production was far below demand - homebuilding in California generated $28 billion in direct economic benefits and $69 billion in related or induced economic activity.
• In 2000, California's homebuilding industry created more than 330,000 jobs directly and 830,000 in additional related jobs.
• According to the Real Estate and Land Use Institute at California State University, Sacramento, every $1 spent on residential construction produces $2.59 in economic output.

Sources:

Links:

Home Builders Association of Northern California
www.hbanc.org

California Building Industry Association
www.cbia.org

National Association of Home Builders
www.nahb.com

Bay Area Council public policy and business leadership organization
www.bayareacouncil.org

California Association of Realtors
www.car.org