A new report from the Terner Center for Housing Innovation at the University of California-Berkeley looks at how restrictions are limiting housing construction within the state.
The study—”Built-Out Cities: How California Cities Restrict Housing Production Through Prohibition and Process”—found cities that permitted more housing between 2013 and 2017 were larger, wealthier, and located further away from jobs than the average city. Those cities were zoned for more housing and had fewer regulatory prohibition, but also had more “onerous development processes.”
Also, cities with more regulatory prohibitions on housing permitted fewer units. Cities with a higher-zoned capacity for new housing permitted more units, and these effects remain significant across our models.
“Burdensome regulatory processes were not statistically associated with housing production generally, and cities with more onerous processes actually permitted more multifamily units,” the study says. “One caveat, and explanation for these findings is that, in cities with little demand for new development, planners may be less likely to report processes as a constraint on new housing in a survey.”
The study said the main drivers of the state’s affordability crisis comes down to the high demand to live in the state and the low supply of housing to meet that demand—a new development.
The Terner Center said post-war California consistently boomed more than it busted. Between 1963 and 1988 the states GDP more than doubled. During that time, it added almost 10 million and four million housing units. The state failed to add at least 200,000 housing units during periodic recessions.
While the state again saw its population grow by 10 million between 1997 and 2017, California added just three million units and production fell in many years to only 100,000 new units annually.
“The results are of this mismatch were predictable: as housing became scarce, prices rose, even amongst older stock that was once much more affordable,” the report states.
The median value of a home in the 1980s within Los Angeles County home built in the 1970s was $269,000 in 2016 dollars. By 2016, the value of a home that was four decades old was $524,000.