Special Survey On Californians And Their Housing: Housing Costs Lead Many Californians To Consider Moving
Homeownership a Major Dividing Line Between Haves, Have Nots
SAN FRANCISCO, California, November 18, 2004 — Although Californians deeply value their quality of life in the Golden State, a surprising number say that the cost of housing could drive them away, according to a new survey released today by the Public Policy Institute of California (PPIC) in collaboration with the Hewlett, Irvine, and Packard Foundations.
The survey’s large sample size (2,502) and multilingual interviews (conducted in English, Spanish, Chinese, Korean, and Vietnamese) make this the most comprehensive survey on housing and housing policy to date. Overall, Californians express grave concerns about the cost of housing and see little upside to the run-up in housing prices. In fact, one quarter (24%) of Californians today say the cost of housing in their part of California is forcing them to seriously consider moving – to another part of the state or away from California altogether. This sentiment is highest among coastal residents, and many are acting on it: A recent PPIC study found that coastal Californians are driving much of the Central Valley’s population boom.
Nearly all Californians (94%) perceive that home values have been increasing in their region, with 84 percent saying they have increased a lot in recent years. Some see broad benefits to skyrocketing housing prices – most residents (82%) view it as at least somewhat important to the economic vitality of their part of the state. But they express greater ambivalence about this phenomenon as it relates to them personally. Specifically, 49 percent of Californians say that increasing average home values in their part of the state are a bad thing for them and their families, while 41 percent call it a good thing. One reason for this perspective? Californians worry about the fallout of increasing prices for younger family members. Three in four adults (77%) say they are at least somewhat concerned that the cost of housing will prevent the younger generation in their family from buying a home in their region of the state. Moreover, one in three (31%) cite a more immediate effect of housing costs – that is, it places a financial strain on their households today.
“Californians understand the economic value of our hyper real estate market, but they also feel the pinch of high prices,” says PPIC Statewide Survey Director Mark Baldassare. A majority of Californians (55%) view the availability of affordable housing as a big problem in their region today, placing it just below traffic congestion (59%) and far above the lack of well-paying jobs (35%), population growth (35%), and air pollution (30%) as a regional concern. Orange and San Diego County residents are the most likely (63%) and Central Valley residents the least likely (39%) to see affordable housing as a big problem in their area.
Homeownership: The Great Divide
Beyond regional differences, homeownership represents a profound dividing line between the “haves” and “have nots” in California today. About six in 10 California adults say they own their own home. Majorities of whites (71%) and Asians (59%) own their homes; majorities of Latinos (55%) and blacks (51%) are renters. A large majority of U.S.-born residents (68%) are homeowners, while immigrants (55%) are more likely to rent. And the likelihood of owning a home increases sharply with age, income, and education.
Homeownership rates also have serious implications for elections and politics in the state. Seventy-five percent of likely voters in the state’s elections are homeowners, while a majority of those who are not registered to vote are renters. As a result, voters’ preferences largely reflect the opinions of homeowners. “Despite all the recent focus on coastal versus inland California or blue versus red counties, we need look no further than the demographics of homeownership to see a great social divide facing our state,” says Baldassare.
Consistent with this divide, homeowners express greater satisfaction than do renters with their quality of life:
- While 89% of state residents say they are at least somewhat satisfied with their current housing and neighborhood, homeowners are far more likely than renters to say they are very satisfied with their housing (75% to 34%) and community (65% to 41%).
- Homeowners (68%) are also more likely than renters (34%) to report a high degree of satisfaction with the amount of living space in their home. Overall, 86 percent of Californians are at least somewhat satisfied with their living space and privacy, with Central Valley residents more likely than others to be very satisfied.
- Neighborhood safety is less of a concern for homeowners than for renters: 64 percent of residents who own homes say they are very satisfied with the security of their neighborhoods, compared to 40 percent of renters. Whites (64%) are more likely than Asians (47%), Latinos (41%), and blacks (38%) to hold this view.
Given the dramatic rise in home values, homeowners have another reason to feel good. Indeed, 93 percent of homeowners say that the value of their home has increased in recent years, and 76 percent say it has increased a lot. Nevertheless, these large increases in equity do not make most homeowners confident that they could buy another home, given the current market. Only a slim majority (53%) say it is very likely (23%) or somewhat likely (30%) that they could find a home they could afford and would want to buy in their part of California. Of those who say their home values have increased a lot, only 23 percent think they would be able to find another home to buy in their region.
Although 86 percent of renters in California hold onto the hope of being homeowners someday, only 18 percent believe it is very likely they will find a home they can afford, with fewer than half (49%) saying it is at least somewhat likely. Renters in the Inland Empire are more likely than others to believe they can find a home to buy in their region. Whites (11%) are much less likely than Latinos (23%) and blacks (25%) to be optimistic about finding a home to buy in their part of the state.
Homeownership in Low-Income Communities Harder to Achieve
Regardless of their housing status, many state residents express concern about the housing options that are available in low-income and minority neighborhoods. Most Californians (55%) – and majorities across racial/ethnic groups – believe that these neighborhoods are less likely than other communities to attract developers to build new single-family homes. And by more than a two-to-one margin (54% to 25%), state residents are also more likely to think that buyers in low-income communities have a harder time rather than an easier time qualifying for loans than buyers in other neighborhoods. Blacks (74%) and Democrats (57%) are far more likely than whites (48%) and Republicans (45%) to hold this view.
Little Support – But Lots of Ideas – for Government Housing Policies
Given their worries about housing availability and affordability, how do residents feel about the related policies of their state and local governments? Only one in four (23%) believes that state government is doing an excellent or good job on housing and land use policy, with a similar percentage (22%) giving state leaders poor ratings on the topic. However, there is a lack of consensus about whether or not state government should alter its policies in response to rising housing costs or shortages. Half (50%) think state government is doing enough (33%) or too much (17%) to encourage construction, while 37 percent say government could do more. And 52 percent say the state government should maintain current land use and environmental restrictions even if it increases the cost of new housing, compared to 40 percent who support easing such restrictions. However, residents do get behind a number of specific proposals aimed at promoting the development of new housing: Majorities favor shifting property tax dollars from state to local governments as an incentive for local leaders to approve new housing developments (57%); using transportation funding as an incentive to encourage local governments to develop integrated plans for housing, jobs, and transit (59%); and providing “smart growth” guidelines to local governments (54%).
At the local government level, Californians are only slightly more supportive of the way leaders are handling land use and housing issues: 33 percent say they are doing an excellent (6%) or good (27%) job. Despite this ambivalence, most residents (67%) believe local governments should work together to develop regional plans for housing development and land use. And they also see a role for themselves at the ballot box: 61 percent say they would support a local bond measure to subsidize the cost of building affordable housing, and 53 percent would reject efforts to slow down the pace of development in their community.
More Key Findings
- Community Spirit— Page 2
Two in three residents (66%) say their neighborhoods have a sense of community. This perception increases with age, homeownership, and length of residence.
- Commuting Satisfaction — Page 3
Three in four employed residents (77%) say they are either very satisfied (44%) or somewhat satisfied (33%) with their commute to work. Fewer workers (52%) express satisfaction with the public transit options that are available to them, with one-third (32%) saying they are dissatisfied with public transit.
- The Lure of the Single-Family Home — Page 10
Seventy percent of Californians would prefer to live in a single-family detached home, even if it means they have to drive to work and to travel locally. However, a majority (53%) also say they would choose to live in a small home with a small backyard if it means a shorter commute to work.
- Urban vs. Suburban — Page 11
Californians are divided when asked if they would be willing to trade the typical features of suburban communities for more urban amenities: 48 percent prefer to live in a mixed-use neighborhood if it means proximity to stores and services, while an almost equal number (49%) choose a residential-only neighborhood.
About the Survey
This survey – a collaborative effort of the Public Policy Institute of California, The William and Flora Hewlett Foundation, The James Irvine Foundation, and The David and Lucile Packard Foundation – is a special edition of the PPIC Statewide Survey. Findings of this survey are based on a telephone survey of 2,502 California adult residents interviewed between October 21 and November 1, 2004. Interviews were conducted in English, Spanish, Chinese, Korean, or Vietnamese. The sampling error for the total sample is +/- 2%. The sampling error for subgroups is larger. For more information on methodology, see page 19.
Mark Baldassare is research director at PPIC, where he holds the Arjay and Frances Fearing Miller Chair in Public Policy. He is founder of the PPIC Statewide Survey, which he has directed since 1998. His book, A California State of Mind: The Conflicted Voter in a Changing World, is available at www.ppic.org.
PPIC is a private, nonprofit organization dedicated to improving public policy through objective, nonpartisan research on the economic, social, and political issues that affect Californians. The institute was established in 1994 with an endowment from William R. Hewlett. PPIC does not take or support positions on any ballot measure or on any local, state, or federal legislation, nor does it endorse, support, or oppose any political parties or candidates for public office.