Posted on 03/23/2006 9:30:55 AM PST by NormsRevenge
California's home ownership rate is the second lowest in the nation, a trend that can only be reversed by easing up on land-use regulations and passing bonds for roads and other infrastructure, an industry group said Wednesday. The home ownership rate is 70 percent nationwide but only 57 percent in California and the Bay Area, according to a report released by the California Building Industry Association, which represents the home building industry. The report ranked California 49th nationwide in terms of home ownership. Only New York, with a home ownership rate of 55 percent, is lower.
"There was a time when California was on par with the U.S. during the'50s and'60s, " said Alan Nevin, the Building Industry Association's chief economist. "But during the'70s a long list of state, federal and local regulations have cumulatively relegated too many Californians to a lifetime of renting."
California needs to increase by 1.6 million its number of homeowners to be on parity with the country's 70 percent home ownership rate, the report found.
If that happened, it would result in more than $4 billion a year more paid in local and state property taxes.
Only 12 percent of Bay Area households have the minimum yearly household income of $174,460 to afford a single-family home with the median price of $712,940, according to the California Association of Realtors.
So what kind of housing must be built to address the Bay Area's needs?
"We need to build all types of housing ... so we can get a better balance and ultimately less pricing pressure," said Layne Marceau, Building Industry Association chairman and president of the Northern California Division of Shea Homes. "The only way to do that in the long term is to have all types of housings — an increased supply from condos in Oakland to single-family homes in Tracy."
To turn more renters into homeowners, the group is pushing for legislation that would ease land-use regulations that home builders say makes it hard for them to put up new homes.
But the builders group might find opposition to such changes.
"Those policies and laws are put into place for a very specific reason — to check sprawl," said Tina Duong, programs and communications director for the San Francisco-based Non-Profit Housing Association of Northern California.
Each year, California builders need to put up about 240,000 housing units — single-family homes, condos, townhouses and apartments — to keep up with demand and population growth, the groups say. This year, it's estimated that builders will put up between 185,000 and 205,000 units.
Geeta Rao, policy director at the Non-Profit Housing Association, said there are plenty of homes being built — just not the right type. She cited a Bay Area Council report showing that from 1999 to 2003 only 30 percent of the area's demand for affordable housing was being built. But for market-rate housing, 120 percent of the demand was being built.
"For very low-income and moderate-income families, the supply isn't meeting the needs of those households," Rao said. "That's where affordable housing comes into play."
One way to provide affordable housing is through inclusionary zoning, which requires developers to build a certain number of units priced below the market-rate units as a condition of getting local approval.
While inclusionary programs may appear to be good in theory, they aren't a practical solution to building more affordable housing, Marceau said.
"It's not achieving our long-term solution," he said.
Fees imposed by cities to pay for housing-related infrastructure improvements can add as much as $100,000 to the cost of a new home, according to the Building Industry Association.
To ease this, the group supports infrastructure financing programs, such as the unsuccessful effort by Gov. Arnold Schwarzenegger to get a bond measure on the June ballot to improve levees and roads.
"passing bonds for roads and other infrastructure"
Can't.
Envirowacko in the state believe in banana.
It might also have something to do with the fact that a 1200 square foot doublewide in a trailer park costs $400,000 there.
I DO NOT GET THAT. What is so appealing about the Gay Area...er...the Bay Area...that justfies that kind of price?
I just checked this site and found that our first home - an 1100 sf condo that we bought for $79,000 back in 1980 is now valued at over $400,000.
(Zillow.com - a great site)
hot issue today in santa clara county as the environmental extremists are proposing even more hillside building restrictions so they can acquire even more openspace they can call "theirs".
For the 12% that earn it...sure.
But-honestly, IMHO on that salary, one would still be quite strapped making the mortgage payment on a 3/4 million dollar house!
I am on the east foothills side of the valley, we have seen some development the last few years mainly above Milpitas, but housing density is kept low when they have built,, and will likely stay that way for some time.
I would miss the sound of the cows and raccoons, and pity the fools that spend good money for homes that could eventually get mudslid down the hills or rock'n'rolled when the Hayward and Calaveras faults let go big time.
There are quite a few nice double wides for a lot less that 400K available in the Bay Area.. and with good sized footage.
The comment was a bit tongue-in-cheek...but I was trying to make a point!
Comparing to Ohio, I don't see the appeal from a financial perspective. Homes in Marin County, CA cost 6 times on average what they do here...while salaries AT BEST are about double.
The climate is REALLY nice, you are on the beach, and Napa, Monterey, Reno and Tahoe are only two hours away. Plus it isn't Los Angeles.
it's not about geotechical safety, it's a "viewshed initiative" so the people on the valley floor won't see any homes on the hillside.
forget home ownership - for a variety of reasons incl weather
Target elhi proficiency
Fine, but see my last comment. I love nice weather, but I don't think it's worth spending 6 times as much (on maybe double the income if I'm lucky) for a crappy house in a place overrun with homos and liberals just to see the beach.
I hear ya. ;-)
The ownership rate is also obviously affected by the vast numbers of illegals here as well. But some banks and lending institutions are now doing what they can to address that by lending to illegals so they can be owners too.
The market disagrees with you.
As I said, the climate is REALLY nice.
I'm not arguing with the market. Just saying I don't personally get the appeal of SF. To each their own.
"Only 12 percent of Bay Area households have the minimum yearly household income of $174,460 to afford a single-family home with the median price of $712,940, according to the California Association of Realtors.This is liberal's ultimate utopian society. They don't need to own anything, do they? I can't wait the day they achieve their goal of 100% state own properties. SIGH...So what kind of housing must be built to address the Bay Area's needs? "
LOL! I'm with you completely. I've been to San Francisco; hung out there for 4 days/3 nights. Yes, it's beautiful and scenic. Yes, there are some very cool attractions both natural and man-made. Yes, it's close to other cool things (wine country, Tahoe, Carmel, etc.)
But fer cryin-out-loud, at those prices there's no way I'd ever have any remote desire to live there or own property there! Spending that much moolah to be surrounded by military-hating hippies and queers—living under constant threat of an earthquake, mudslide or other terrestrial upheaval—is just insane!
"There was a time when California was on par with the U.S. during the'50s and'60s"
Notice, he did not say: "with the REST of the U.S."
If California was part of the U.S., maybe that would help?
That, and the insane cost of housing. My Ohio home is worth roughly $200k, in California, it would go for $500k to $1M, depending on location. Who can afford that?
"Comparing to Ohio, I don't see the appeal from a financial perspective."
Well, if you could stand it, a good plan would be to find work in CA, buy a home and let it appreciate. After 15 to 20 years, retire, sell the $700k house and move to almost anywhere else in the U.S. Buy a similar home in Ohio for $200k and bank $500k.
Of course, you'd have to spend 15-20 years in California, the land of the fruits and the nuts.
For the 12% that earn it...sure
"But-honestly, IMHO on that salary, one would still be quite strapped making the mortgage payment on a 3/4 million dollar house!"
doh! I missed the 12 percent part. Well...I agree with the second half of your post :)
The more liberal your state the less chance you have of ever owning your own home.
Intuitively obvious to the most casual observer.
That is just the start of it for city permits.
My neighbor did a remodel - he had to give $10,000 to the local school as well for approval.
How about they cut the environmental regs on business and quite locking up supply (land) in liberal conservancies and open space initiatives? The same "business" minded folks (cough) who push global warming and land grabs are now touting that BONDS (taxes) are the only solution?
Its the weather in California that appeals to people. Althouth, I would NEVER want to live in the Bay Area, but I do live in Southern California and although the price of living and houses in particular is outrageous, familiarity, family and the weather keep me here.
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