Please ensure Javascript is enabled for purposes of website accessibility
Under Newsom, California Housing Crisis Gets Worse, Not Better
GV-Wire-1
By gvwire
Published 5 years ago on
August 13, 2019

Share

Gov. Gavin Newsom’s grand plan of building 3.5 million housing units by 2025 is off to a terrible start.
In the first six months of 2019, builders gained approval for 51,178 new homes in California, nearly 20% fewer than the same period a year earlier.
That puts the state on track for the first meaningful annual decline since the recession, The Los Angeles Times reports.
Most alarming: multi-family construction, the biggest need, was down 23%.
“We are going in exactly the wrong direction,” said Christopher Thornberg, founding partner of Beacon Economics.

Chart of building permits approved in California Jan. 1-June 30, 2019
(GV Wire/Alexis DeSha)
And, in fact, a report prepared by Beacon Economics for next10.org found that “certain jurisdictions in California will not meet their low-income housing production targets for more than 1,000 years.”

The Fresno-Clovis Story

The same report shows that Fresno and Clovis are doing well with housing for moderate and above-moderate income residents.
However, Fresno is not projected to meet its housing goals for very low and low-income families until 2057 and beyond. In those same categories, the projected fulfillment dates in Clovis are the years 3000 and 2108. respectively.

Causes of the 2019 Slowdown

What’s behind the 2019 slowdown?
Builders, particularly in Southern California, point to high costs for land, labor, materials and government fees. And there are the Trump administration’s tariffs on building products and appliances from foreign countries. For some builders, their potential profit margin is so small that it doesn’t justify the risks of construction.

According to John Burns Real Estate Consulting, costs for labor and materials rose 7.2% in June in Northern California compared with a year earlier, while home prices were essentially flat. In Southern California, costs rose 2.1% while prices increased by 2%.
But perhaps the biggest hurdle is the not-in-my-backyard sentiments of residents and voters. This results in many local governments, especially cities, slowing or even opposing large-scale housing construction.
At the behest of city officials throughout California, the Legislature killed a bill to overcome NIMBYism, Senate Bill 50, before the summer recess.

Mortgage Rates Falling

One bright spot for both home buyers and builders: The average rate on a 30-year fixed mortgage is 3.6% — down from 4.94% in November, according to Freddie Mac.


DON'T MISS

What to Know About Pam Bondi, Trump’s New Pick for Attorney General

DON'T MISS

North Korean Leader Says Past Diplomacy Only Confirmed US Hostility

DON'T MISS

Democrats Strike Deal to Get More Biden Judges Confirmed Before Congress Adjourns

DON'T MISS

Newsom Gaslights on Potential Gas Price Hikes in Fresno Visit

DON'T MISS

Automakers to Trump: Please Require Us to Sell Electric Vehicles

DON'T MISS

President Biden Welcomes 2024 NBA Champion Boston Celtics to White House

DON'T MISS

Ohtani Makes History With 3rd MVP, Judge Claims 2nd AL Honor

DON'T MISS

Trump Chooses Pam Bondi for Attorney General Pick After Gaetz Withdraws

DON'T MISS

Average Rate on a 30-Year Mortgage in the US Rises to Highest Level Since July

DON'T MISS

Cutting in Line? American Airlines’ New Boarding Tech Might Stop You at Now Over 100 Airports

UP NEXT

North Korean Leader Says Past Diplomacy Only Confirmed US Hostility

UP NEXT

Democrats Strike Deal to Get More Biden Judges Confirmed Before Congress Adjourns

UP NEXT

Newsom Gaslights on Potential Gas Price Hikes in Fresno Visit

UP NEXT

Automakers to Trump: Please Require Us to Sell Electric Vehicles

UP NEXT

President Biden Welcomes 2024 NBA Champion Boston Celtics to White House

UP NEXT

Ohtani Makes History With 3rd MVP, Judge Claims 2nd AL Honor

UP NEXT

Trump Chooses Pam Bondi for Attorney General Pick After Gaetz Withdraws

UP NEXT

Average Rate on a 30-Year Mortgage in the US Rises to Highest Level Since July

UP NEXT

Cutting in Line? American Airlines’ New Boarding Tech Might Stop You at Now Over 100 Airports

UP NEXT

MLB Will Test Robot Umpires at 13 Spring Training Ballparks Hosting 19 Teams

Newsom Gaslights on Potential Gas Price Hikes in Fresno Visit

8 hours ago

Automakers to Trump: Please Require Us to Sell Electric Vehicles

8 hours ago

President Biden Welcomes 2024 NBA Champion Boston Celtics to White House

8 hours ago

Ohtani Makes History With 3rd MVP, Judge Claims 2nd AL Honor

9 hours ago

Trump Chooses Pam Bondi for Attorney General Pick After Gaetz Withdraws

9 hours ago

Average Rate on a 30-Year Mortgage in the US Rises to Highest Level Since July

9 hours ago

Cutting in Line? American Airlines’ New Boarding Tech Might Stop You at Now Over 100 Airports

9 hours ago

MLB Will Test Robot Umpires at 13 Spring Training Ballparks Hosting 19 Teams

10 hours ago

Death Toll in Gaza From Israel-Hamas War Passes 44,000, Palestinian Officials Say

10 hours ago

Jussie Smollett’s Conviction in 2019 Attack on Himself Is Overturned

10 hours ago

What to Know About Pam Bondi, Trump’s New Pick for Attorney General

NEW YORK — Pam Bondi, the former Florida attorney general, was chosen Thursday by Donald Trump to serve as U.S. attorney general hours after...

6 hours ago

6 hours ago

What to Know About Pam Bondi, Trump’s New Pick for Attorney General

7 hours ago

North Korean Leader Says Past Diplomacy Only Confirmed US Hostility

7 hours ago

Democrats Strike Deal to Get More Biden Judges Confirmed Before Congress Adjourns

8 hours ago

Newsom Gaslights on Potential Gas Price Hikes in Fresno Visit

President Joe Biden with Mary Barra, the chief executive of General Motors, at the Detroit Auto Show, Sept. 14, 2022. President-elect Donald Trump has promised to erase the Biden administration’s tailpipe rules designed to get carmakers to produce electric vehicles, but most U.S. automakers want to keep them. (Doug Mills/The New York Times)
8 hours ago

Automakers to Trump: Please Require Us to Sell Electric Vehicles

8 hours ago

President Biden Welcomes 2024 NBA Champion Boston Celtics to White House

9 hours ago

Ohtani Makes History With 3rd MVP, Judge Claims 2nd AL Honor

Former Florida Attorney General Pam Bondi, speaks before Republican presidential nominee former President Donald Trump arrives to speak at a campaign rally at First Horizon Coliseum, Saturday, Nov. 2, 2024, in Greensboro, NC. (AP/Alex Brandon)
9 hours ago

Trump Chooses Pam Bondi for Attorney General Pick After Gaetz Withdraws

Help continue the work that gets you the news that matters most.

Search

Send this to a friend