Majority of Californians Have Considered Moving Due to High Housing Costs

California’s sky-high housing prices — especially in desirable metropolitan locales, like the Bay Area and Los Angeles — are a subject of national infamy and tremendous stress for manyof the state’s residents whosimply want a place to live.

A new study from from the Jack Citrin Center for Public Opinion Research at the University of California, Berkeley, highlights the scope of the problem: 56 percent ofsurvey participants said housing prices were forcing them to consider moving — in some cases, out of state.

California residentshavewarned that something has to give, but the question of how to address housing costs inthe state– where some of the wealthiest make 10-14 times as much as those in the bottom 10 percent — is a challenging one.

Homes in California cost about 2.5 times as much as the national average. The state’s rents are also extremely high– particularly in the Bay Area, with San Francisco edging out the notoriously expensive New York City in 2014. If you want a place to live, it’s going to cost you — if you can find one at all.

Nearly half of voters overall say affordable housing is a “serious issue,” a number that jumps to 65 percent in the Bay Area. Unsurprisingly, many people also support rent control, although this opinion is heavily split along partisan lines.

Of the 56 percent who said they were thinking about moving, a quarter said they’d look out of state. Young adults in particular are more likely to want to move, perhaps reflecting thedifficulties of breaking intothe housing market is very difficult for them to break into.

The survey also asked about potential support for a 2018 bond measure to finance low-income housing opportunities. A slim majority indicated preliminary support for the bond, which is likely good newsfor thelegislature.

A lack of available housing stock only contributes to the issue: When the occupancy rate is high, it becomes an owner’s and seller’s market, with homes routinely renting and selling above advertised prices in some parts of the state.

The best way to mitigate that is, of course, to build more homes, but the spirit of “not in my backyard” — or NIMBY — is strong in many high-value areas of the state, like the Bay Area. Meanwhile, the growing “yes in my backyard” — YIMBY — movement is pushing for new construction of dense housing, especially near public transit,to get as many homes as possible on the market.

Many regions of California are characterized by suburban sprawl, which is highly inefficient for meeting the needs of the state’s residents, in addition to being environmentally unfriendly. Dense housing doesn’t have to be ugly or disruptive, but stalwart opposition to any development — particularly that which involves large-scale developers who have the capital and experience to build new homes — is creating big problems for California.

Proposition 13, which restructured property tax assessment in 1978, is also an issue. This constitutional amendment says that instead of being taxed at their assessed value — whatproperties are worth right now — properties should be assessed at the value of their last sale, with small increases allowed annually to account for inflation. That means someone who bought a house for $30,000 in 1973 is paying radically reduced taxes comparedto a neighbor who bought a house for $800,000 in 2013.

Sound unfair? A lot of people would agree, arguing that homes should be taxed as a capital investment — and because Prop 13 creates a disincentive to sell property, it keeps homes off the market.The policy also has a cascading effect for commercial real estate, where companies use tactics like buying the companies that own buildings, but not buying the buildings themselves — thus retaining a lower tax rate.

Rent control, designed to make it easier for people to stay in their homes, can also have some unintended effects. Landlords eager to capitalize on the housing market explosion may look for ways to evict rent-controlled tenants in the hope of relisting their units at much higher prices. Some take advantage of the Ellis Act eviction, which permits landlords to kick everyone out of a building if they’re “going out of business” — claiming, for example, that they don’t intend to rent units anymore, and then flipping the building into condos that they can sell at a premium.

Once tenants are forced to leave a rent-controlled unit, they may have difficulty finding a home they can afford — imagine being accustomed to paying $800 for your home and discovering that the only comparable units cost twice that, or even more.

While the tech industry is often blamed for congestion and high prices in the Bay Area, the truth is more complicated. In fact, ithas the potential toplay an active role for good. For example, encouraging remote work could help employees telecommute from anywhere, relieving stress on the housing market. Similarly, tech giants like Google and Apple could actually pay their taxes, and stop relying on an exploitative independent contractor system to ensure that all their employees are paid fairly — putting them in a better position to afford housing.

Photo Credit: Jeff Turner/Flickr

36 comments

Marie W
Marie W3 months ago

Thanks for sharing

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Sarah Hill
Sarah Hill7 months ago

Everything is high cost in California. They need to start by lowering taxes instead of raising them, but that's what you get from the Dems!

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Celine Russo
Celine Russo9 months ago

They need to keep the housing prices in check. It sounds way too expensive over there.

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Ellie M
Ellie M9 months ago

ty

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Joe M
Joe M.9 months ago

Land Value Tax is what is needed. Shift taxes off of Labor, Sales, Income and onto Land and you eliminate speculative rises in land price and you incentivize investing in real enterprise.

This would help to ensure that workers are not priced out of the area in which they live and work.

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Clare O'Beara
Clare O'Beara9 months ago

Obvious that a popular location will cost more. And don't we hear that taxes are very low?

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Julie D
Julie D9 months ago

Yes. I am a native Californian, several generations of native Californians in my family tree. We pay more for everything here, gas, food, rent, homes, utilities, water, everything that is vital to life costs more and more and more. But salaries are not increasing. It is very frustrating and exhausting fighting so hard all the time to just scrape by, because it requires a small fortune to live here and most of us do not have fortunes.

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Peggy B
Peggy B9 months ago

TY

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Muff-Anne Y

Not everyone can live in California. Governments should control immigration and people should be sent to the States that need more people! It’s the same in Canada. Everyone that comes into this country wants to live in British Columbia, especially Vancouver and they’ve pushed the prices through the roof. This just shouldn’t be allowed.

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Anne Moran
Anne Moran9 months ago

Time to move to the country...

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