California’s Housing Future – Challenges and Opportunities

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Challenges and Oportunities
By Attorney Stephen J. Beede, BPE Law Group, P.C.

In January of this year, the California Department of Housing and Community Development (“HCD”) issued a draft Report on the housing challenges facing California now and projecting to 2025.

With California’s desirable climate, diverse economy, and many of the nation’s top colleges, the State continues to experience strong housing demand. However, housing construction is constrained by regulatory barriers, high costs, and fewer public resources.
Today’s population of 39 million is expected to grow to 50 million by 2050. Without intervention, much of the population increase can be expected to occur further from job centers, high-performing schools, and transit, constraining opportunity for future generations. These challenges not only impact the availability and affordibility of housing but, unless resolved, will be of great significance to the livelihood of California Realtors.

The Report focused on Five Key Challenges:

1. Housing supply continues to not keep pace with demand, and the existing system of land-use planning and regulation creates barriers to development. Production averaged less than 80,000 new homes annually over the last 10 years, and ongoing production continues to fall far below the projected need of 180,000 additional homes annually.

2. The highest housing growth is expected in communities with environmental and socioeconomic disparities. Lack of supply and rising costs are compounding growing inequality and limiting advancement opportunities for younger Californians. Without intervention much of the housing growth is expected to overlap significantly with disadvantaged communities and areas with less job availability. Continued sprawl will decrease affordability and quality of life while increasing transportation costs.

3. Unstable funding for affordable home development is hindering California’s ability to meet California’s housing demand, particularly for lower-income households. The majority of Californian renters – more than 3 million households – pay more than 30 percent of their income toward rent, and nearly one-third – more than 1.5 million households – pay more than 50% of their income toward rent. Overall home ownership rates are at their lowest since the 1940s.

4. People experiencing homelessness and other vulnerable populations face additional barriers to obtaining housing. California is home to 12 percent of the nation’s population, but a disproportionate 22 percent of the nation’s homeless population. For California’s vulnerable populations, discrimination and inadequate accommodations for people with disabilities are worsening housing cost and affordability challenges

5. High housing costs have far-reaching policy impacts on the quality of life in California, including health, transportation, education, the environment, and the economy. Unless these Challenges are resolved, the benefits of living in the Golden State may become a thing of the past.

The Report identifies Three Options for Addressing Housing Challenges:

1. Reforming land use policies to advance affordability, sustainability, equity.

2. Addressing housing and access needs for vulnerable populations through greater inter-agency coordination, program design, and evaluation.

3. Investing in affordable home development and rehabilitation, rental and homeownership assistance, and community development.

While California’s housing challenges may appear to be overwhelming, the full Report: “California’s Housing Future: Challenges and Opportunities” provides the data and analysis to describe the problem and frame the discussion surrounding solutions. You can read the entire 60 page Report at:’s-Housing-Future-Main-Document-Draft.pdf

BPE Law Group, PC represents real estate professionals, as well as developers, investors, and even communities. If you would like a consultation with us, please call our office at (916) 966-2260 or e-mail our Managing Attorney, Keith Dunnagan, at

This article is not intended to be legal advice, lending advice, or a specific recommendation of any particular lender or company, and should not be taken as such advice.