“The report looks back at the past decade, perhaps as a way to justify its low estimate of unmet housing needs, but in so doing it overlooks what every reputable scholarly institution is telling us — housing shortages are crippling affordability,” said Coyle. “As all economists will tell you, high prices signal market shortages, and no state has higher housing prices than California.”
He cited a report from the California Association of Realtors® that the median price for an existing home in January was $405,720, 21% higher than a year earlier and 68% above the price in 2000.
The Realtors®, Coyle said, also reported that “constraints on supply continue to impact both the availability and affordability of housing options for California families,” with only a two-month supply of homes on the market compared to the seven- to 10-month supply that is considered normal.
Coyle also voiced concern with the report’s implication that there might be some benefit from retreating from residential development in areas with the greatest housing demand and pushing home building to inland areas.
Noting that the three areas in which housing shortages are the greatest cause for concern “are the least receptive to new construction, and other research has indicated that restrictive land-use policies in these regions exacerbated the shortages,” the report's authors suggest that “policies could be enacted to encourage job growth in areas with relatively abundant housing, perhaps by providing infrastructure in less developed areas adjacent to existing job centers.”
“Housing needs all over the state demand public policies that support new development,” Coyle responded. “Despite the warnings from PPIC, California policymakers should not yield to NIMBYs and other no-growth advocates and abandon the so-called coastal areas when that’s where the people and the jobs are. To do so would be bad public policy — driving development further and further away from job centers and placing greater stress on the environment as well as on California’s working families.”
Don’t Miss NAHB’s Spring Construction Forecast Conference
See what's on the horizon for the housing industry at the semi-annual gathering of the country's premier economists and finance experts. Get the latest forecasts on housing starts, project budgets and other economic bellwethers at the Spring Construction Forecast Conference on April 21 at the National Housing Center in Washington, D.C. Visit the Web site for more information.
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