Creswell hsgneed101206

The 27th Annual NPH Fall ConferenceSan Francisco October 2006California Housing Issues: 

The 27th Annual NPH Fall Conference San Francisco October 2006 California Housing Issues California Department of Housing & Community Development Cathy Creswell, Deputy Director

Recent Housing Demand Influences: 

Recent Housing Demand Influences Strong Population Growth Demographic and employment change Inadequate Housing Supplies Declining Affordability Favorable Mortgage Rates

Identifying the Problems: 

Identifying the Problems

Slide4: 

Strong Population Growth California’s Population Predictably Grows About 500,000 Per Year. Like adding a city the size of Long Beach every year.

Slide5: 

Source: DOF Demographics Research Unit, 2003 California Today: 37 Million 2020: 44 Million Inland Empire 20.2% Los Angeles 21.7% San Diego 9.1% Santa Clara 4.4% Sacramento 4.1% Highest 2020 Growth Areas:

Slide6: 

CALIFORNIA’S Projected Growth 2000 - 2010 by Age Cohort Source: DOF Demographic Research Unit, 2004

Demand for Greater Diversity of Housing & Special Needs Housing: 

Demand for Greater Diversity of Housing & Special Needs Housing Disabled Elderly Large Families Homeless Farmworkers

California New Housing Permits 1967 - 2005New Housing Permits Below Need: 

California New Housing Permits 1967 - 2005 New Housing Permits Below Need SOURCES: CAR; Construction Industry Research Board; CSHP

Slide9: 

Shortfalls are especially acute near coastal job centers Source: Raising the Roof, 2000

Growing Condo Activity California’s New Condominium Units & Units Converted 1990 - 2005: 

Growing Condo Activity California’s New Condominium Units & Units Converted 1990 - 2005 SOURCE: CA Dept. of Real Estate, Feb. 2005

Slide11: 

New Condominium Units as percent of New Residential Units 1990 - 2005 SOURCE: CA Dept. of Real Estate, Feb. 2005

Wage and Housing Gaps : 

Wage and Housing Gaps The “Housing Wage” in California is $21.24 - more than three times the minimum wage. An extremely low income household can only afford monthly rent up to $483, while the fair market rent for a two bedroom unit is $1,104. A worker earning minimum wage must work 126 hours per week in order to afford the average two-bedroom unit. Source: Out of Reach 2006, NLIHC

Top 10 workers that often cannot qualify to purchase a home in California: : 

Top 10 workers that often cannot qualify to purchase a home in California: *Fast-Food Workers *Cashiers *Building Maintenance Workers *Administrative Assistants *Truck Drivers *Construction Workers *Nurses *Firefighters *Teachers *Police Officers Source: Rural Community Assistance Corporation (RCAC), July 2006

Appreciating Home Prices 2000-2006: 

Appreciating Home Prices 2000-2006 *without adjustment for inflation Source: California Association of REALTORS® (C.A.R.), Trends in California Real Estate, August 2002 and August 2006

Slide15: 

50 Least Affordable Metro Areas 2nd Quarter 2006 Source: Housing Affordability Continues to Fall, California Building Industry Association

Slide16: 

Source: US Census, Annual Statistics: 2005 Table 13. Homeownership Rates by State: 1984 to 2005; Graphic representation by HCD. California’s Homeownership Among Lowest In U.S.

Slide17: 

Bay Area: Cost of Homeownership Versus Annual Income San Francisco 2005 3rd Qtr Median Priced Home: $760,000

Slide18: 

The Los Angeles Region: Cost of Homeownership Versus Annual Income Los Angeles 2005 3rd Qtr Median Priced Home: $495,000

Slide19: 

The Central Valley Region: Cost of Homeownership Versus Annual Income Fresno 2005 3rd Qtr Median Priced Home: $290,000 Bakersfield 2005 3rd Qtr Median Priced Home: $255,000

A Heavy Load:The Combined Housing and Transportation Burdens of Working Families : 

A Heavy Load: The Combined Housing and Transportation Burdens of Working Families “DRIVE ‘TIL YOU QUALIFY” has backfired as working families spend even a larger portion of their budget on housing and transportation.

Slide21: 

How Low-to-Moderate Income Workers Get to Work Source: A Heavy Load: The Combined Housing and Transportation Burdens of Working Families Center for Housing Policy

Slide22: 

What Working Families spend on Housing and Transportation Source: A Heavy Load: The Combined Housing and Transportation Burdens of Working Families Center for Housing Policy

Other Tradeoffs…: 

Other Tradeoffs… The lack of affordable housing near major employment centers leads to region-wide traffic congestion and reduction of air quality. Outer suburban areas usually have few public transit options. As commute times increase, families spend less time together.

Why Housing is ImportantHousing Industry Contribution to the California Economy: 

Why Housing is Important Housing Industry Contribution to the California Economy Contributes $218 billion per year to economy Generates 935,000 jobs Accounts for approximately 10% of all economic activity in the state Housing industry is the second largest industry group in the state, when all economic multipliers are considered Source: Sacramento Regional Research Institute: The Economic Benefits of Housing in California

Slide25: 

Source: National Association of Realtors/ Bureau of Economic Analysis, Survey of Current Business, 9/2002; Housing wealth has a more immediate impact on consumer spending than stock wealth. About 6 in 10 homeowners have more home equity than stock wealth. Housing accounts for more than one-third of the nation’s tangible assets. Why Housing is Important

Slide26: 

When there is enough housing that is affordable… Children have stable neighborhoods and healthy environments… When they thrive…the community thrives.