California鈥檚 take on a housing crisis: Aim for abundance, reap affordability
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Ali Martin Staff writer
| Santa Monica, Calif.
Tricia Crane stands at the corner of Wilshire Boulevard and 26th Street in Santa Monica, a few blocks from her home, pointing out a stretch of businesses that will be replaced with a 170-unit apartment building.
A Starbucks has already closed; a store selling chairs and mattresses is still open, but not for much longer. This block just 2 miles from the beach is scheduled to be redeveloped in January.
Facing a budget crisis and a state mandate to create more housing, members of the City Council, she says, are 鈥渏ust doing whatever they can鈥� to get more units built.
Why We Wrote This
One answer to an affordability gap in housing, experts say, is building more units to try to ease the pressure on prices. That can mean changing laws that regulate where and what kinds of housing can be built.
The eight-story building will stand out among its mostly one-to-three-story neighbors. It鈥檚 one of a half dozen developments that will add over 1,000 units to this coastal city of 91,000 people next to Los Angeles.
Average monthly rent is here, among the highest in the United States. Ms. Crane is concerned that the addition of these market-rate units in the highly desirable beach community won鈥檛 do anything to bring prices down. 鈥淲e are losing our middle class,鈥� she says.
But these are the type of projects that pro-housing advocates hope to see more of, and California is making them easier to build. Over the , Gov. Gavin Newsom signed a slate of laws aimed at eliminating a deficit of 2.5 million housing units. In support of more and denser housing, lawmakers relaxed the state鈥檚 landmark environmental rules, cleared the way for multiunit housing near , streamlined building permits, created new funding programs for developers, and increased tax credits for renters.
The laws are, in part, designed to promote units that are affordable 鈥� generally defined as costing no more than 30% of a family鈥檚 income. They move California in the right direction, says Sherri Lawson Clark, a cultural anthropologist at Wake Forest University who studies housing and poverty. If California 鈥� where midtier homes cost more than twice the nationwide average 鈥� can narrow the affordability gap with an influx of new housing, then it could 鈥減erhaps be a blueprint for other states and localities,鈥� she says.
The Golden State鈥檚 effort faces significant obstacles. Factors like the high cost of construction, concentration of relatively high earners, and high interest rates affect how much it costs to build, buy, and rent units 鈥� which directly impacts their accessibility. In fact, California has enacted a series of reforms over the last decade, only for the crisis to persist.
A 聽by the McKinsey Institute for Economic Mobility estimates the U.S. is short 8.2 million housing units 鈥� 32% more than 10 years ago, despite聽decades in which聽聽toward聽more streamlined permitting and denser housing. The limited supply, says the report, has kept rents and home prices high.
California鈥檚 need for more housing units, plus a growing disparity between income and housing costs, calls for a 鈥渂oth/and鈥� solution, says William Fulton, professor of practice at the University of California, San Diego鈥檚 department of urban studies and planning. 鈥淵ou have to build way more housing鈥� in general, he says. 鈥淏ut you also need to build as much affordable housing as you can.鈥�
New laws could change California landscape
A long-standing state law requires cities to have plans for meeting projected housing needs, and to update those plans every few years. of Santa Monica鈥檚 existing housing stock is in buildings with five or more units, according to a 2023 analysis by the Santa Monica Daily Press. The city鈥檚 is nearly 9,000 new units by 2030. Just over a 鈥� has been completed. Nearly all of it is in multifamily or mixed-use buildings.
The new law that allows for clears the way for high-rises of up to nine stories, and overrides any local ordinances.
The wide-ranging reforms reflect the complexities of housing affordability.
鈥淭here isn鈥檛 a silver bullet here,鈥� says Mr. Fulton. Homes get built at the market鈥檚 highest end, where profits are higher, and at the very low end, because that construction is subsidized. But 鈥渧ery little new housing is being built鈥� for people making $100,000 a year, he says. 鈥淭hat鈥檚 a very complex spot to be in. ... Rents are going up, and they鈥檙e the ones who are really getting squeezed.鈥�
can afford to buy a median-priced single-family home in their state, according to the California Association of Realtors. In 2012, it was 56%.
Adding market-rate units, even at the high end, helps ease the shortage and expand affordable options, says Mr. Fulton. As people move into more expensive homes, their less expensive units free up for others to move into.
This push to expand the kinds of housing available in California communities could reframe the California dream, as condominium and apartment buildings gain legislative support to outpace single-family homes like the ranch, Craftsman, and Spanish bungalows found throughout the LA area.
And one significant obstacle to building condos and apartments no longer exists. Faced with the loss of thousands of homes in the LA wildfires, plus the increasing crisis of affordability, lawmakers agreed on limited reforms that ease restrictions on denser building where infrastructure already exists, generally in urban areas.
The new law , waiving its regulations for 鈥渋nfill鈥� projects and clearing the path for a wide range of development, including single-family homes as well as multiunit and mixed-use projects.
Housing effort has community impact
The new laws will affect residents in different ways. In some areas, developments have the potential to usher in big changes to traffic patterns and demographics.
Ms. Crane moved to Santa Monica with her husband in 1982. They bought a 1920s Spanish bungalow on a leafy street not far from the planned 170-unit building.
If that building goes up, she says, not only will traffic increase on the smaller side streets, but it will make parking more difficult as well. She also laments the loss of businesses along the commercial stretch, which has a mix of restaurants, boutiques, grocery stores, and shuttered storefronts.
鈥淲e鈥檙e losing community,鈥� she says.
But the YIMBY movement has had strong backing in the State Legislature. Standing for 鈥淵es in My Backyard,鈥� YIMBY counters the idea of supporting solutions as long as they鈥檙e implemented somewhere other than near where one lives.
That 鈥測es鈥� movement, which advocates for more and denser housing, is , who was elected on a pro-housing platform. Governor Newsom to lead the state in building millions of new units by 2025. Both say increasing the housing supply will ease the state鈥檚 affordability crisis.
California YIMBY declared the state鈥檚 reform package a 鈥渓andmark victory鈥� earlier this month . 鈥�2025 was by far the biggest year for pro-housing reforms in our history,鈥� the group wrote.
But driving around Santa Monica on a tour of the new housing complexes, Ms. Crane calls them 鈥渁 gift to the developers.鈥� (The Monitor reached out to builders and had no response.)
鈥淭his is not going to generate affordable units,鈥� she says. 鈥淭his is driving the middle class out.鈥�
The National Association of Home Builders published a that determined about 75% of U.S. families could not afford to purchase a median-priced home. For most of the last 20 years, median home prices in the U.S. have exceeded the affordability benchmark of 30% of a family鈥檚 income. This year, the median cost of housing in the U.S. shot up ) of a family鈥檚 median income.
Miracle McKinney aspires to purchase a home, but for now, 鈥渋t鈥檚 just really survival,鈥� she says.
Ms. McKinney estimates she spends close to 70% of her monthly income on housing, even though she lives in a subsidized apartment. As a volunteer with the nonprofit Alliance of Californians for Community Empowerment, she advocates for policies that keep people housed. 鈥淏uilding isn鈥檛 the only solution,鈥� says an ACCE spokesperson.
ACCE wants to see more cities pass laws that allow tenants an opportunity to purchase their building if it goes on the market. Tenant-opportunity-to-purchase acts are in at least 11 cities, including San Francisco, Chicago, and Washington, plus Maryland.
Ms. McKinney says she and her neighbors can鈥檛 compete with the corporate developers buying up properties.聽
Everyone deserves housing, says Dr. Lawson Clark from Wake Forest, and the U.S. has the capacity.
If there are too few housing units, 鈥渢hen, yes, I think we need to sort of make a way for that to happen.鈥�
