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Report · January 2020

California’s Future: Housing

Hans Johnson, Marisol Cuellar Mejia, and Julien Lafortune

We gratefully acknowledge the support of the PPIC Corporate Circle and the PPIC Donor Circle.


The high cost of housing has emerged as a threat to California’s future. Many Californians see homelessness and housing costs as the state’s most important challenges, according to the PPIC Statewide Survey (September 2019). This is not surprising, considering that California has the second-highest homelessness rate in the nation and ranks near the top in cost-burdened households’second among homeowners and third among renters. Indeed, according to the California Association of Realtors, only 31 percent of households can afford to buy a median-priced home in California in the third quarter of 2019, 25 percentage points lower than the nation’s average. What is more, California has one of the highest poverty rates in the nation when housing costs are accounted for.

The governor and the state legislature have taken steps to spur housing production and address homelessness. The 2019-20 state budget includes $1 billion to address homelessness, a historic $1.75 billion investment in new housing, and incentives for cities to approve new home construction. The governor signed 18 bills in 2019 designed to help jump-start housing production, including major legislation (SB 330) aimed at removing local barriers to housing construction and speeding up new development; he also signed a statewide rent control measure. At the same time, several local jurisdictions have dramatically expanded funding for affordable housing and homelessness prevention and services.

There are no quick fixes to California’s housing crisis, which has been decades in the making. State efforts to improve housing affordability, increase housing supply, and address homelessness must interact with local policies. This means that identifying and implementing effective strategies will require sustained cooperation between state and local stakeholders.