Housing follows the basic economic 101 fact that if demand is higher than supply, pricing will go up. The age chart reflects the Millennials are in their prime housing formation years.
The aging population is staying put, and the average time of housing retention used to be 7 years, now it’s 11.
New housing construction dropped substantially after the housing boom in 2005… and hasn’t come back to a level that will make up the difference in the loss of housing construction lost during that timeframe, or even comes close to meeting the Housing and Community Development (HCD) estimates to meet the housing needs of the basic population.
Since 1969, California has required that all local governments (cities and counties) adequately plan to meet the housing needs of everyone in the community. California’s local governments meet this requirement by adopting housing plans as part of their “general plan” (also required by the state). General plans serve as the local government’s “blueprint” for how the city and/or county will grow and develop and include seven elements: land use, transportation, conservation, noise, open space, safety, and housing. In order to create a housing plan (aka housing element) showing it could meet the local housing needs, a jurisdiction must first know how much housing it must plan for (and estimate how much will be needed at a variety of affordability levels in order to match the needs of the people who will live there). This is determined by a process called the regional housing needs assessment.
Bottom line… the government has not followed the law and made sure an adequate quantity of housing has been built to meet the needs of the population. The result is the existing affordable housing crisis.
Of course, the government wants money, but when they have $150,000 in fees for each unit of housing to be constructed, it has an effect on a developer’s ability to economically construct housing.
Politicians may propose bills that institute various controls on property rights. The main legal property rights are the right of possession, the right of control, the right of exclusion, the right to derive income, and the right of disposition. If they are not careful, taking away an owner’s rights will be counterproductive, even if it sounds politically viable at the time.
Just elements to think about, especially coming into an election season.
If you are in the Los Angeles area, have any questions or real estate sales or financing needs, feel free in contacting me
Ron Henderson GRI, SRES, SFR, RECS, CIAS
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals (2017-2018)
Chairman – OutWest Marketing Meeting (Real Estate Education)
BRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth
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