Housing Crisis Overview

National Context

• Supply vs. Demand: Insufficient housing supply relative to demand drives prices up.

• Underbuilding: A decade of underbuilding since the Great Recession exacerbated the issue.

• Millennials: The largest U.S. generation is entering the housing market.

• Zoning Restrictions: Restrictive laws hinder housing development in job-rich areas.

• Labor & Material Costs: Skilled labor shortages and material price spikes further limit construction.

• Effects:

  • Affordability crisis: Housing shortages fuel rising costs.

  • Cost-burdened families: 70% of low-income households spend over half their income on rent.

  • Homelessness: A direct consequence of the shortage.

California Context

• Historical Housing Boom (Post-WWII): Economic prosperity, affordable military mortgages, and migration to suburbs fueled housing growth, with 40M homes built from 1946-1975.

• Current Housing Crisis:

  • Housing Shortage: California has been short 3–4M units since the 1970s.

  • High Costs: From 2020–2024, housing costs rose 75–80%, far outpacing wage growth.

  • Low Homeownership: California has the second-lowest homeownership rate in the U.S., with young adults and minorities most affected.

  • Supply Chain & Inequality: COVID-19 disrupted supply chains, and real estate speculation contributes to inequality and declining homeownership rates, now at their lowest since the 1940s.