By Joel Kotkin
This is the introduction to an new report “The Cost of NOT Housing” authored by Joel Kotkin for the National CORE Symposium on Affordability of Housing. Download the entire report (pdf) here.
It is a commonplace view that housing does not contribute to the overall fiscal and economic condition of cities. Recent trends—both nationally and here in California—suggest that this is not the case. New housing, including affordable units, provide some direct stimulation through construction jobs, but also allow people, particularly young families, to stay, work and shop locally. Lack of affordable housing ultimately drives people, particularly the entry level and young educated, out of regions where their labor would be coveted by local companies.
Some in the real estate industry, seeing ever higher prices, do not see a crisis here. Yet the current real estate “bubble” is not a durable replacement for a strong, sustainable economy. Older owners, and land speculators with a hold on scarce developable parcel, may do well under such conditions, but draining household finances for rents depresses retail sales, and makes saving for a home purchase ever more difficult.
The problems are particularly relevant to areas like the Inland Empire and the Central Valley, whose economies depend on the migration of middle and working class families seeking more affordable housing. Yet developing such houses—critical to future economic growth—has been greatly constrained by a regulatory regime that works to reduce housing growth, particularly for single family houses, in the periphery. The result has been steadily escalating rents and house prices across the state.
To meet the needs of its increasingly diverse population, and particularly the next generation, California needs to reform its regulations to more fully reflect the needs and preferences of its citizens. Once the home of the peculiarly optimistic “California Dream”, our state is in danger of becoming a place good for the wealthy and well-established but offering little to the vast majority of its citizens who wish to live affordably and comfortably in this most blessed of states.
Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.
This post was originally published by newgeography on 5/26/2016