The housing crisis in California has reached a critical point, and state leaders, policymakers, and industry experts are rallying for bold, transformative solutions. At the recent CCRE Housing Summit: Charting California’s Future, key stakeholders from across the housing sector came together to discuss the state’s most pressing housing challenges and explore ways to address them.

A Deep Dive Into California’s Housing Struggles

California’s soaring housing costs have left many residents struggling to find affordable homes, and experts agree that the affordability crisis is one of the most significant threats to the state’s long-term viability. According to Tomiquia Moss, California’s Business, Consumer Services, and Housing Secretary, more than two-thirds of Californians now spend over 30% of their income on housing, with many facing the added burden of limited availability in both affordable and market-rate housing.

At the summit, Moss stressed that housing issues extend beyond the elderly and unhoused populations, emphasizing the need to focus on the so-called “missing middle”—a demographic of first-time homebuyers and moderate-income households that has been largely overlooked in past policies. UCLA’s Shane Phillips echoed this point, underscoring the need for more housing at all price points—not just affordable units or luxury developments, but a broad spectrum of housing options to address the needs of California’s diverse population.

The Struggle for Middle-Income Housing

In cities like Los Angeles, the gap in housing availability for middle-income earners is especially glaring. Mary Leslie, President of the Los Angeles Business Council, highlighted that while high-end market-rate and low-income housing have been built, middle-income housing—critical for many working families—has been woefully underdeveloped. The region has only met 3% of its housing goals for the “missing middle,” exacerbating affordability challenges.

Despite these challenges, a recent survey by the Los Angeles Times revealed that 74% of respondents still believe homeownership is attainable, even as the reality for most Californians tells a different story. As Leslie pointed out, the political will to take bold action remains a significant hurdle, and without it, the state will continue to fall short of addressing its housing needs.

Addressing Racial Disparities in Homeownership

Another key issue discussed at the summit was the racial divide in homeownership rates. Tara Roche, Project Director at Pew Charitable Trusts, shared sobering statistics revealing a 30% gap in homeownership between Black and White households in California. These disparities not only hinder wealth-building opportunities for communities of color but also exacerbate broader economic inequalities.

California’s Dream for All program, which provides down payment assistance to underserved communities, has been a positive step toward addressing this issue. Tiena Johnson Hall, Executive Director of the California Housing Finance Agency, reported that the program has helped nearly 19,000 households—60% of whom are people of color—purchase homes without defaults. While these efforts are a step in the right direction, panelists emphasized the need for more systemic changes to ensure equitable access to homeownership for all Californians.

Navigating the Regulatory Maze and High Costs

One of the most significant barriers to housing production in California is its complex regulatory environment. Experts at the summit shared insights from other states, noting that less restrictive regulations in places like Texas have enabled quicker and more affordable housing construction. In comparison, the high cost of building in California—where construction costs can reach $350 per square foot—puts a heavy financial strain on developers and delays the delivery of new units.

Dan Dunmoyer, President of the California Building Industry Association, pointed out that Houston alone builds more housing annually than the entire state of California. Solutions to streamline California’s regulatory landscape are necessary to boost production and ease the affordability crisis. Interestingly, the state has seen success in the construction of accessory dwelling units (ADUs), where regulatory reforms have resulted in a surge in building activity. When the state removed permit fees and bureaucratic delays, ADU construction rose from 2,000 units to 18,000 in just one year.

Rethinking Urban Development for the Future

As California continues to grow and evolve, experts agree that the state must shift towards more high-density, urban housing models. Sujata Srivastava, Chief Policy Officer for the San Francisco Bay Area Planning and Urban Research Association, emphasized the need for more high-rise, urban developments in lieu of suburban, low-density housing that is increasingly out of step with California’s population growth and housing needs. More compact, urban development models could offer more affordable and sustainable housing options in high-demand areas.

What’s Next for California’s Housing Future?

The discussions held at the CCRE Housing Summit have paved the way for critical conversations about California’s housing future. While the state faces immense challenges, the shared commitment among policymakers, academics, and industry leaders to address the crisis head-on offers hope that solutions are within reach. As California enters 2025, the work done at this summit will likely serve as a foundation for the bold, multifaceted strategies required to tackle the housing crisis at scale.

Conclusion: A Call for Collective Action

With California’s housing crisis growing ever more urgent, leaders from across sectors are calling for bold and innovative solutions to increase housing supply, ensure affordability, and promote racial equity in homeownership. The conversation at the CCRE Housing Summit has set the stage for a year of action and collaboration. The question now is whether the political will and resources will be mobilized to turn these ideas into tangible results that benefit all Californians.

Sources:

• Center for California Real Estate (CCRE)
• Los Angeles Times Survey
• Pew Charitable Trusts
• California Housing Finance Agency (CalHFA)
• California Building Industry Association (CBIA)
• San Francisco Bay Area Planning and Urban Research Association (SPUR)