California sees major housing shortage

Associated Press

SACRAMENTO, Calif. — For decades, California has represented the good life to many Americans, with its fine weather, great jobs and the ocean next door. But to people trying to find housing in the state, it can be something quite different: cramped, expensive and impossible.

Richard Ramella, right, and Randy Jackson, principals of The Planning Center in Costa Mesa, Calif., replaced a block of commercial-only, single-story storefronts with the mixed-use commercial-residential development behind them in Huntington Beach, Calif. Public parking, shops and offices are on the ground floor, with residential units above. Such reuse of commercial space is one way developers are addressing a statewide housing shortage in California. Associated Press

Only one in three Californians can afford a median-priced home of more than $2.5 million. Millions of working people spend more than half their paychecks for rent. And as the homes in the rest of the country become less crowded, Californians are moving in together.

"In San Jose, even the lawyers have roommates now," said Dean Misczynski, director of the California Research Bureau. The state's Department of Housing and Community Development warns of extreme shortages in years ahead.

California needs an "unprecedented amount of new housing construction," the agency said.

The average number of people occupying each housing unit rose from 2.8 to 2.9 people in the 1990s. Nationally, the average per household is 2.6 and falling. In many parts of the state, the household size is well above average. In East Compton in Los Angeles County, the average dwelling houses five people.

In Berkeley, Hermina Astalis recently bought a house with her sister after renting for years and living with three and four others. Now, a homeowner in her late 20s, she recalls numerous stories of rental hell.

"It took me six weeks once to find a room in a house," she said. "At the time I couldn't afford a one-bedroom (apartment) by myself. It's like a full-time job looking for an apartment."

In San Francisco, where monthly rent for a one-bedroom apartment ranges from $1,800 to $3,500, the number of people with roommates rose 30 percent during the 1990s.

San Francisco produce store owner Lee Ly knows that "dreaming of buying a home in California is very tough."

Ly, who moved from Ho Chi Minh City, Vietnam to the Bay Area in the early 1990s, bought a $400,000 house three years ago in Daly City, south of San Francisco.

The irony in a state that desperately needs housing is that most cities don't want it.

"The fundamental argument you hear from local government officials is that housing doesn't pay its own way," said Paul Lewis, research fellow with the California Public Policy Institute.

A local government typically keeps about 11 percent of the annual property taxes generated by a house. For a $300,000 house, that's little more than $500 a year to help pay for police officers, playgrounds and pothole repairs.

Cities want shopping malls, car lots and big retail stores that bring in the sales taxes that support most city treasuries.

There has also been a steep decline in condominium construction. In the early 1990s, California developers built 19,000 condos a year. By last year, that number was down to 2,900. Insurers are reluctant to cover condos after recent lawsuits alleging defects in attached housing.

Thousands of acres also lie fallow in California's central cities. Known as "brownfields," these are former industrial areas often blighted and contaminated.

One solution, according to Richard Ramella, principal with The Planning Center in Costa Mesa, would be to turn aging strip malls into new housing. Orange County, which adds three jobs for every house it builds, has hundreds of old strip developments on major streets, he said. Builders could reconfigure them numerous ways for housing.