(Photo Credit: tpsdave/Pixabay)
Californians learned something profound about the perils of housing insecurity when the housing bubble burst almost ten years ago. Foreclosures and evictions devastated the finances of millions of families, of course, wiping out the savings of entire generations. But as researchers began to sift through the wreckage of the recession, they found the acute anxiety generated by the loss of a home—along with the more general financial insecurity associated with struggling to pay for housing—had serious health impacts as well, from psychological disorders and substantial declines in physical health (including high blood pressure, depression, and increased obesity risk) to increased crime and child maltreatment.
The 2008 housing crisis literally made us sicker—even for those who just lived close to someone who lost their home or defaulted on their mortgage. Unaffordable housing, in other words, impacts everyone.
This is a lesson the state Legislature seems to have forgotten. More than 100 bills have been introduced this year to tackle our state’s ongoing housing affordability crisis, but the vast majority of the Legislature’s “solutions” are aimed in the wrong place. As we argue in a new white paper, they will not only perpetuate California’s decades-long struggles with housing affordability, they will actually make things worse—and make Californians less financially secure, sicker, and less safe. And this time by choice.
The issue lies in the problem many state leaders (with the notable exception of the governor, his housing director, and the Legislative Analyst’s Office) are trying to solve. While economists see the state’s unaffordably high housing prices as a straightforward case of supply failing to keep pace with demand, many housing advocates (and their political allies in Sacramento) remain convinced that California is facing a shortage only of subsidized “affordable” homes—housing built using public resources and rented at below-market rates to low-income households without the means to live anywhere else.
There is certainly a case to be made that we need more—much more—of this kind of housing, especially as wages stagnate for millions of working Californians and local resources remain strained after the loss of redevelopment.
But here’s the thing: Even when cities had access to redevelopment funding, low-income, subsidized housing only made up about 5 percent of the state’s housing stock. To tackle affordability challenges confronting the other 95 percent of California households, we need to think much more broadly. Bringing supply back into balance with demand, policy experts agree, will require approving at least 100,000 more housing units of every type each year for a decade—including subsidized housing for those who can’t afford to rent or buy a home, as well as a new generation of market-rate housing affordable to every income level.
The first step toward increasing housing supplies—and lowering home prices—is to dramatically reduce the cost of building, accelerating development and letting the market get to work on the housing stock it is responsible for. That means targeting the biggest obstacles to housing production, including the exclusionary zoning practices and other regulatory burdens identified as barriers last year by the Obama Administration (remember them?)—complex local rules that perpetuate residential segregation and contribute directly to rising housing prices.
So far, this is not where the Legislature is headed. A series of legislative proposals this year to “streamline” housing development instead are focused almost exclusively on subsidized, below-market housing—and are packed with benefits for a political coalition of labor, environmentalists, and equity groups: They require payment of prevailing wages to construction workers for all new residential construction (raising prices), push costs on middle-income renters and homeowners to subsidize production of more below-market units (raising prices), and call for costly building features and higher ongoing environmental fees to address climate change and “ecosystem services” (raising prices).
Research on the 2008 housing crisis tells us what the consequences of these policies—and the insecurity that comes with ever-higher housing costs—will be. One study conducted in Pennsylvania after the bubble burst found that people living in housing they couldn’t reliably pay for—i.e. when monthly costs exceeded 30 percent of income—had much higher odds of developing hypertension and arthritis and were less likely to seek health care. Other similar studies found housing insecurity caused everything from higher rates of anxiety and depression to increased risk of suicide. Health impacts have been found even among neighbors not directly experiencing housing insecurity—with one study finding people experience statistically significant increases in blood pressure for every foreclosed property located within 100 meters of their home.
Nine million renters in California live in households that spend more than 30 percent of their income on housing. By some estimates, as many as 40 percent of the state now qualifies as the “working poor,” while middle-income professionals of every stripe, from teachers to nurses and firefighters, are spending hours each day commuting to jobs in cities where they can’t afford to live. No amount of low-income housing investment will be able to provide these Californians with the housing they need.
It is time for the Legislature to acknowledge this—and to recognize the housing crisis for what it is: a misalignment of supply and demand that requires a comprehensive effort to accelerate housing construction and allow more Californians to buy a home, live close to their jobs, and not break the bank (or their health) to pay for it.
Adding to the cost of housing isn’t going to make California any more affordable. That should be obvious by now.
To read the full white paper on the health impacts of housing, please click here.
Herman Gallegos is a co-founder of the National Council of La Raza. John Gamboa is a co-founder of The Greenlining Institute. Jennifer Hernandez is a partner at Holland & Knight.