LOS ANGELES—The California Association Of Realtors this week issued a statement on a report titled, California's High Housing Costs: Causes and Consequences, released this week by California's Legislative Analyst's Office:
"The Legislative Analyst's Office report on housing is completely on target. California's high cost of housing is putting the squeeze on the state's residents and making it difficult to attain the American Dream or just keep a roof over their heads," said CAR president Chris Kutzkey. "Providing safe and affordable access to capital and revising outdated underwriting methods will help increase homeownership opportunities. Moreover, to improve housing supply, thoughtful upzoning is one of the best things we can do to get better land use."
The report found that California's high housing costs make the state a less attractive place to call home, making it more difficult for companies to hire and retain qualified employees, likely preventing the state's economy from meeting its full potential. Housing has long been more expensive than most of the rest of the country - about 2 1/2 times the average national home price, while California's average monthly rent, $1,240, is about 50% higher than the average U.S. rent, according to the report.
The higher cost is primarily driven by less housing being built in the state's major coastal markets, where demand for homes is highest and prices are bid up. For example, between 1980 and 2010, new home construction in the state's coastal metro areas increased 32%, compared with 54% nationally, the report said. Home building was even slower in Los Angeles and San Francisco, where the supply of new housing grew only around 20 %.
The California Environmental Quality Act is a significant factor in inhibiting developers from increasing the supply of housing and building higher density housing, according to the report. Local governments must conduct a detailed review of the potential environmental effects of new housing construction prior to approving it.
The report urges the legislature to pass laws that would promote more density in urban areas. It also advises the legislature to consider changes to the state's environmental review process for new development, as well as changes to local land use and authority.

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CAR Calls for Upzoning to Spur Housing

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