Housing in California – Do we have enough?
(photo credit: Concrete Forms)
When the California Economic Summit gets together next month in Los Angeles, one of the pressing issues that will go under the microscope is housing.
Is there enough of it?
Are people going to keep putting up with a commute from Modesto to San Jose or from the Antelope Valley to downtown Los Angeles just so they can have a backyard?
If there's going to be another housing boom, and odds are there will be one, the economy needs California to be ready for it.
These are some of the questions that the Action Team has been pondering in advance of the Summit.
Back to those pressing issues for a minute, when you think about it, housing is a cross-cutting issue for the California economy. It's a major driver in the state because it is a significant source of direct and indirect jobs. And if California is going to maintain its middle class with good jobs today and for the future, people will need an affordable and convenient place to live.
The lack of housing in the right places results in overcrowding, doubling and tripling up of families in existing homes and apartments, traffic gridlock, poor air quality and unnecessary depletion of green fields.
On top of the lack of inventory, the shutdown of the federal government may have a negative effect on the young housing recovery. Bloomberg reports one immediate effect is a slowing of the consideration and approval of mortgages.
"The last thing we need is anything that shakes the confidence in a softly recovering housing market," David Stevens, chief executive officer of the Mortgage Bankers Association and former head of the FHA, said to Bloomberg. "If it's a short-term shutdown, it's a story about these employees put out of work. If it's long term, it's a broader story about the adverse impact to the economic recovery."
While some parts of the Golden State are booming again (Silicon Valley, Orange County, San Diego, San Francisco), others aren't. The New York Times recently used the Inland Empire as an example of how housing woes continue in some parts of the country. There wasn't a major population area hit harder by the economic downturn five years ago than the Inland Empire region, which is still struggling to rebound. In fact, unemployment among our major population areas is still highest in the Inland Empire, says Paul Granillo, who is head of the Inland Empire Economic Partnership, and that simple factoid underscores the uneven recovery in California.
Granillo is concerned that the story of two California economies is not being told sufficiently. He says that the state's coastal regions are doing much better than the inland areas and that California's economic recovery won't be complete until all areas of the state are on the upswing.
We'll be hearing from Granillo in this blog soon, but in the meantime, keep in mind the concept of two Californias, going in opposite directions. None of us want that.
In addition to housing, the Action Teams working in advance of the Summit are focusing on Infrastructure, Workforce, Regulatory, Manufacturing, Working Landscapes and Access to Capital. They're all contributing to major goals of the Summit: to identify ways to create more middle class jobs and to improve the state's ability to compete in a global economy.