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Press Release · August 20, 2003

California’s Newest Neighborhoods More Exclusive – But Not More Expensive – Than Older Communities

Bigger Homes, Longer Commutes in New Residential Developments

SAN FRANCISCO, California, August 20, 2003 — Located mainly near the urban fringe, California’s newest residential developments attract a wealthier, whiter population than do older communities across the state, according to a study released today by the Public Policy Institute of California (PPIC). But contrary to popular opinion, these new neighborhoods are not characterized by ultra-expensive housing.

The study, California’s Newest Neighborhoods, uses data from the 2000 Census to examine the state’s newest residential developments, defined as those communities in which half of the housing units were built during the last decade. It finds that 845 new neighborhoods were created in the 1990s, compared to 1,739 in the 1980s. Despite the overall decline in the number of new residential developments, over 2 million Californians currently reside in new neighborhoods.

On the whole, California’s newest neighborhoods share a number of characteristics. They are disproportionately located in the inland areas of the state: The Inland Empire, the San Joaquin Valley, and the Sacramento Metro regions together account for almost half of the state’s new neighborhoods. New residential developments also tend to be located along the edges of suburban cities rather than in urban areas and consist of homes that are much larger than the average-size house statewide.

Given the more remote locations of new neighborhoods, commutes are longer: In 2000, almost one in four commuters from new neighborhoods spent at least 45 minutes (one way) to get to work, compared to one in six commuters elsewhere. Residents of these communities are more likely to drive alone to work and less likely to take public transportation. The number of cars per household is also higher in new neighborhoods than in other neighborhoods.

Although there is wide variation within communities, residents of new neighborhoods appear substantially different than those of other neighborhoods in California. In general, they are:

  • Less diverse: Non-Hispanic whites constitute a majority of the population in the state’s newest neighborhoods (57%) but a minority elsewhere (46%).
  • Wealthier: Almost half of households in new neighborhoods have incomes greater than $75,000, compared to just 29 percent in the state as a whole.
  • More likely to be two-parent families with children: Two of every five households in new residential developments consist of a married couple with children, compared to one in every four households in other neighborhoods.

“To their critics, these new neighborhoods represent sprawl and economic exclusivity,“ says PPIC research fellow Hans Johnson, who coauthored the report with PPIC research associate Joseph Hayes. “Yet, the reality of California’s housing crunch and the fact that housing values in these communities are competitive makes their attractiveness for young families undeniable.” Indeed, newer residential developments are similar to other California neighborhoods with respect to median housing values. Values in new neighborhoods are slightly more homogenous than in other neighborhoods, with fewer very high-priced homes (over $500,000) and substantially fewer lower-priced homes (under $100,000).

The Public Policy Institute of California is a private, nonprofit organization dedicated to improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett.