An interview with...
Dir., California Budget Project
Your organization recently completed a study on housing costs in California;
what was it called, and what did it reveal?
Locked Out: California's
Affordable Housing Crisis -- and our study found that California
has a real crisis in terms of the accessibility and availability of
affordable housing for California families.
is your general assessment of housing in the Central Valley?
The central valley
is having some serious housing problems. A lot of the valley's problems
are really the spillover effect of the crisis situation that's occurring
in a lot of the coastal counties.
does the Central Valley's situation compare to the rest of California?
Is there anything that sets us apart?
The Valley has more
supply, and a lot of that certainly has other consequences -- the paving
of our farmland to build housing. But there has been relatively more
construction to job growth, which means that prices are lower, although
they are beginning to increase at a fairly rapid pace here, in particularly
the greater Sacramento area. So we have more housing that's available,
but we have lower incomes here in the Valley. And in particular, in
the Southern and Northern parts of the Valley, job growth has been limited
or nonexistent, so people don't have the incomes they need to afford
is achieving the dream of home-ownership easier in the Central Valley?
It's easier in parts
of the Valley. It's also more difficult in other parts, and again, it's
a trade-off between lower prices, but also lower incomes. If you look
at the average earnings in Tulare County, for example, it's about a
third of what someone in Silicon Valley can expect to make on an annual
basis. So while housing is certainly a lot less expensive, if you're
earning $22,000 a year, it's still hard to buy a house.
you mentioned the link between the Bay Area and the Central Valley;
how does the housing crisis in the Bay Area impact the Central Valley?
The really tremendous,
unbelievable housing costs in the Bay Area have caused people to move
further and further out. Young families who want to own a home -- even
in many cases renters who just can't afford housing in the greater Bay
Area -- are moving out into the Valley: into the Stockton area, into
the 80 corridor. We're hearing reports of people living in Merced and
Madera commuting into Silicon Valley, and that's driven the prices up.
And you end up in a situation where those workers bring the higher salaries
that that they're earning in the Bay Area to the Valley housing market,
and they're able to outbid the people who live and work in the Valley.
And that's caused a real problem for the people who live and work here.
from an economist's perspective, what is the real, day-to-day, real-life
impact on Valley residents who are competing with people from the Bay
Area for housing?
They are spending
a greater share of their income either on rent or on a mortgage payment.
That leaves less money to spend on childcare, on healthcare, on buying,
clothing and shoes for their kids to go to school in -- and so it really
has had a tremendous impact on families' total standard of living.
are the challenges for farm workers or people who live in rural areas?
The farm worker
population has some of the same problems. They have very low earnings,
which make it very hard to afford either rent or housing purchases.
To the extent that there is still a migrant population through the Valley,
they have particular housing needs. It can be either housing for single
adults who are traveling without their family or, many times, extended
families who work and move from crop to crop. Over the past two decades,
the supply of farm worker housing has dropped by about two-thirds in
the Valley despite the fact that we have a growing agricultural workforce.
If you look, moving further up into the foothills and the more the really
rural parts of the Valley, we see the highest prevalence of substandard
housing. Over a third of the housing stock in the foothills is substandard.
That means it has at least two or more serious defects.
about the urban area? What's the housing situation, say, in downtown
It's a housing market
that's changed a lot in the last couple of years. Housing prices are
going up. Over the past year, the housing affordability index for both
Sacramento and the Valley as a whole has dropped. In other words, fewer
families are able to afford the median priced home that's available
on the market. It's stayed flat for the state as a whole, and some of
that's been the dot-com slowdown in the Bay Area. We've seen rental
prices in Sacramento go up tremendously, and vacancy rates decline significantly.
Some of that again is the spillover. We hear reports of people who have
public housing assistance who get a section eight certificate, for example,
in the Bay Area. They can't find a place to use it; they'll move to
Sacramento, where, at least until very recently, housing has been more
happens to those renters who can't afford an apartment, or a middleclass
family that gets outbid by Bay Area folks?
To lower income
families, we see people doubling up, tripling up -- a lot of overcrowding.
Overcrowding's become a real problem in California the last several
years: people living in substandard housing stock that couldn't have
been rented a few years back. And so people are living under tougher
conditions than they might have been. The people who are commuting,
maybe they have to move further out to find something they can afford
to rent or own. That means they're spending more time on the highway.
They're clogging the freeways, polluting the air, and they have less
time to spend with their families, and they're stressed out at the end
of the day.
ahead, what is your best-case scenario prediction for housing in the
I think there have
been some positive steps forward. We've seen things like the Metrosquare
development in Midtown. We're seeing some of the housing, the development
that's going on at McClellan. I think that there can be an opportunity
for planning, for in-fill development -- so called "smart growth."
And I think that because our prices are a little bit more affordable,
that can be a good thing. I think if things keep going the way they
have been, we can see a greater imbalance between job growth, growth
in the supply of the housing stock. We can see prices continue to go
up, and we can see more loss of farm land, and more loss of the quality
of life that I think people like here in the Valley.
your advice to policy makers, in terms of handling growth in the Central
That there needs
to be public investment in housing. In previous decades, state and federal
dollars were significantly higher for housing programs. We saw an increase
last year, but this isn't a problem that can be solved in one year.
There needs to be greater public investment in housing. We need to look
at land use policies, how we finance government in California, and find
ways to encourage housing development. We need to build more multi-family
housing. One of the clearest findings in our report was the fact that
multi-family housing -- apartments -- haven't kept pace with demand
for those units, and that's really crunching. Particularly for young
families, lower income families.