LOS ANGELES, Nov. 18, 2024 /PRNewswire/ -- Top housing industry experts from across the state and nation gathered last month for the Center for California Real Estate's flagship event of the year, the CCRE Housing Summit: Charting California's Future. The forum brought together academics, state and local officials, and private sector experts to examine California's political and socioeconomic landscape, homeownership trends, and strategies to expand housing supply.
Featuring keynotes from Senate President pro Tempore Emeritus Toni G. Atkins and Nobel laureate Dr. Douglas W. Diamond, the forum sparked critical conversations on the state's housing crisis, drawing hundreds of attendees across California. The event built upon a year of CCRE dialogue on many converging issues around housing — yielding important emerging insights and setting the stage for crucial conversations in 2025.
Key among those shared during the Housing Summit include:
1. California's affordability crisis demands urgency to expand options for the "missing middle."
The state's affordability crisis is described as "the biggest threat to California's vitality," according to Tomiquia Moss, California Business, Consumer Services, and Housing Secretary. Moss said that more than two-thirds of Californians today spend over 30 percent of their income on rent, stressing that "housing is foundational to all the other ways in which Californians live our lives," influencing everything from health to educational outcomes. However, Moss noted that past efforts to address affordability have primarily centered on providing shelter for the elderly and unhoused, leaving little attention to the "missing middle" or first-time homebuyers.
Shane Phillips, Housing Initiative Manager, UCLA Lewis Center for Regional Policy Studies, agreed. "We do need more deed-restricted, affordable housing, but we also need a lot more market-rate housing and pitting these two things against each other has caused us a lot of problems," Phillips said.
Los Angeles has struggled to deliver adequate supply, particularly for middle-income earners, according to Mary Leslie, President, Los Angeles Business Council & LABC Institute. "We built a lot of market-rate, high-end, and we built some low-income housing, but the middle was a failure—we hit just 3% of [the region's] RHNA targets."
Even with these shortages, a recent Los Angeles Times survey revealed a striking perception gap: "74 percent of respondents still believe that homeownership is within reach, despite the reality that, for most, it isn't," Leslie added. Policy solutions need to address the full spectrum of housing needs, yet "I do not think there is the political will to reach the scale we need," said Leslie.
2. Despite persistent racial disparities, state financial support is helping increase homeownership for communities of color.
The panel discussed persistent racial disparities that continue to limit homeownership opportunities for communities of color in California, blocking pathways to generational wealth.
Tara Roche, Project Director, Pew Charitable Trusts' Housing Policy Initiative, reported a 30-percentage point gap between black and white households when it comes to homeownership. Roche called for more modernization of the rules and regulations to bring more lenders back into this space as policy continues to change around the ways people can access financing. "Across the country, about three- quarters of black home applicants who apply for financing on a manufactured home are denied credit."
Programs like California's Dream for All, which provides targeted down payment assistance, are working to address these disparities, and have helped nearly 19,000 households in three years—60% of whom are people of color—qualify for homes with no defaults, said Tiena Johnson Hall, Executive Director, California Housing Finance Agency. "In spite of that imbalance, what we have seen is when we do wonderful things like down payment assistance, that tends to change the cycle."
3. California's high costs and complex regulatory landscape are hindering its housing production.
Panelists shared lessons from other states and sector-specific examples to show that easing California's onerous development regulations can help expand housing options.
Dan Dunmoyer, President & CEO of the California Building Industry Association, emphasized that "the Metroplex of Houston builds more housing than the entire state of California," where affordable units can cost from $700,000 to a record-breaking $1.2 million per unit, creating financial hurdles that would demand trillions [of dollars] to fully address the state's housing needs.
Similarly, Jason M. Ward, Co-Director of the RAND Center on Housing and Homelessness, said that hard construction costs are about $140 per square foot in Texas versus $350 in California.
In the accessory dwelling unit (ADU) sector, regulatory reforms have yielded a rapid increase in construction. "When the government removed permit fees and delays, ADUs increased from 2,000 to 18,000 in one year," said Dunmoyer.
Sujata Srivastava, Chief Policy Officer for the San Francisco Bay Area Planning and Urban Research Association, pointed out the need to shift towards more urban, high-density housing at attainable prices. Nearly all existing models are "suburban, low density"—a format that is ill-suited to California's evolving housing needs," Srivastava said.
Full panel sessions are available to watch here, and a full report will be released soon at ccre.us.
About the Center for California Real Estate
The Center for California Real Estate (CCRE), an institute of the California Association of Realtors (C.A.R.), advances knowledge and research by collaborating with varied partners, spurs innovative thinking about key issues facing California and the real estate industry, and extends C.A.R.'s influence via intellectual engagement with different audiences, diverse stakeholders and new external partners.
CCRE serves as a nexus for multi-disciplinary thinking aimed at solving some of the state's most challenging issues. Bringing together key experts from a variety of fields — from academics and policymakers to industry leaders — CCRE produces new knowledge and serves as a key resource about housing issues for all C.A.R. members, external entities, the media and the public.
About the CALIFORNIA ASSOCIATION OF REALTORS®
Leading the way…® in California real estate for more than 118 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 180,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
SOURCE CALIFORNIA ASSOCIATION OF REALTORS' Center for California Real Estate