REAL ESTATE TOPICS...Affordability crisis: How worried are Californians?

by Ryan Smith

With housing prices second only to Hawaii, California has home prices and rental costs about 2 ½ and 1 ½ times, respectively, the national average. And Californians see that as a threat to their stability, according to a new poll.

“(The) California Dream is best characterized by the belief that, by coming to the Golden State and working hard (and with a dash of good luck), an individual can strike success,” writes Hoover Institution research fellow Carson Bruno. “Yet with home ownership out of reach for the median household, and rental prices just as much of a strain on household budgets, the Golden State Poll tested a series of concerns related to the affordability crisis.”

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According to the poll, three quarters of Californians feel the rising cost of housing threatens them personally or other Californians. The poll found that 28% feel that younger generations would have a difficult time owning a home, 17% felt that lower-income families were being priced out of the area, and 15% worried that middle-income families were being priced out of the area. Many of those polled said they were being priced out of their own neighborhoods as home values rose.

While housing affordability has been a problem in California for more than 30 years, it may be turning more acute as the state shifts from a diverse, statewide economt to a tech-centric Silicon Valley/Bay Area economy, Bruno writes. And the problem is particularly acute there – 78% of Bay Area residents, the most among the regions surveyed in the poll, said housing prices were somewhat or very expensive.

“And this has implications,” Bruno writes. As more of the state is reliant on jobs in just one area – particularly an area as unwilling to endorse pro-growth policies as the Bay Area … those Californians seeking home ownership are facing immense friction.”