Study Gloomy About Prospects for Southern California Housing Crisis - 10/25/2004 - Real Estate House Home Condo

Study Gloomy About Prospects for Southern California Without Solution to Area’s Housing Crisis

The region needs to do a far better job of building housing in the first two decades of this century, when its population is projected to grow by more than six million residents, than it did between 1990 and 2004, when Los Angeles County saw the actual construction of about 160,000 units and the accumulation of a housing shortfall of more than 282,000 units, according to the report, "Meeting the Housing Challenge in Los Angeles and Ventura."

The housing shortage has contributed significantly to a more than $131,000 increase in the average price of a new home in Los Angeles County and almost $156,000 in Ventura County since 2000, the study found.

“With more than 10 million people already calling Los Angeles County home, and the number estimated to increase dramatically in coming years, we simply are not building enough homes to meet demand,” said Jack Kyser, chief economist for LAEDC.

“If demand continues to outpace supply, we’ll not only see higher home prices, the housing shortage will soon have a negative rippling effect across all sectors of the county’s economy,” he predicted.

On what awaits the area if it doesn’t come to grips with its growing housing crisis, the study envisions a bleak scenario in which:

• Businesses, especially manufacturers, flee to neighboring counties and states where their employees can enjoy a higher standard of living at lower salaries.
• Companies won’t be able to recruit employees from outside the area because housing prices are just too expensive.
• Traffic congestion and air pollution get even worse as families are forced to move to outlying areas to find housing they can afford.
• Attracting new businesses to the area will become nearly impossible.
• Residents will continue to double up in single-family homes, condos and apartments as affordably priced homes become virtually non-existent.

“We need courageous leadership to step up to the plate and bring an end to the crisis and prevent a regional meltdown," said Ray Pearl, executive officer of the home builders association. “Who will lead to curb the skyrocketing price of buying a home? Who will lead to increase the supply of homes to meet the growing population? Who will lead to solve the gridlock on our roads and freeways?”

Among the solutions proposed in the study:

• Increasing the mix of suburban homes and higher-density developments
• Streamlining the planning and permitting process, and finding ways to protect the environment while accommodating growth, including the community and pursuing mixed-use residential and retail development
• Planning for the region’s transportation, school and water needs

“We face serious problems with dire consequences, and it’s going to take strong leaders with clear-cut solutions to solve our region’s housing problems,” said Pearl. “The outcome of doing nothing will only turn the housing crisis into a quality of life catastrophe.”