Shortage of homes grows in rural areas
`The cost of housing and the demand for it has grossly outpaced salaries and supply,' says CEO of group doing study
America's housing crisis is spreading from big cities to the nation's heartland, with housing shortfalls worsening in 230 out of 309 U.S. metro areas.
The nation's shortfall reached 3.8 million homes in 2019, more than double 2012's tally of 1.7 million “missing” homes, according to a study by the nonprofit group Up For Growth. With a shortage of 978,000 homes, California had the nation's biggest shortfall in 2019.
The number of cities with a housing surplus decreased to 140 metro areas in 2019, down from 212 in 2012.
“It doesn't matter if you're in an urban area or a rural area or really anywhere in between, the cost of housing and the demand for it has grossly outpaced salaries and supply,” said Up For Growth CEO Mike Kingsella, who discussed the study in November at the National Association of Realtors conference in Orlando, Florida. “Our study really found that for far too many Americans, folks can't afford to live well where they work, play and gather.”
While housing underproduction more than doubled in metropolitan areas, it nearly tripled in “non-metropolitan America.”
The three cities with the biggest housing surpluses in 2012 — Tampa-St. Petersburg, Las Vegas and Phoenix — all had housing shortages in 2019. Phoenix went from a surplus of 32,699 homes in 2012 to a shortage of 108,564 homes by 2019, the study found.
Despite high rates of construction, housing shortfalls tripled in Dallas and Houston.
Southern California and the Bay Area are epicenters in the nation's housing crisis.
The Los Angeles-Orange County metro area had a shortfall of 388,874 homes in 2019, or 31% more than in 2012.
The shortfall tripled in the Inland Empire to 153,372 homes in 2019, fourth highest in the Up For Growth study.
The San Francisco Bay Area ranked seventh with a shortage of 114,000 homes as of 2019.
Kingsella discussed the study's findings with the Southern California News Group. Here are highlights of that conversation.
Q
Why is the nation's housing shortage getting worse? A “Why” is really the confluence of NIMBYism, exclusionary and restrictive zoning codes and other artificial impediments to building needed homes.
If you look at, for example, in the state of California, we measured housing elasticity, which is to say, what is the market response is to increases in housing need.
California had about a 0.49 housing supply elasticity, meaning for every 1% increase in housing demand, builders responded with a 0.49% increase in supply. So, you're building essentially half of the housing need year over year, which is why the state's falling further into a housing deficit.
Other states, like Texas and Florida, are also following similar trend lines. In other words, their rate of underproduction is increasing quite faster than in California.
It all goes back to uncertainty and unpredictability in obtaining building permits.
In more than 80% of residential zoned land, only single-family, detached housing can be built. Then, you have layer upon layer of other sorts of barriers and land use policy that artificially constrains building envelopes, building height, setback requirements, meaning that fewer units can be built on any given lot.
And all of these things taken together mean that there's this gap between the housing that's needed in communities and the housing that we have.
Q
Why does California have the nation's worst underproduction rate?
AGoing back to the taxpayers' revolt and the creation of Proposition 13 in the 1970s and to exclusionary zoning … in the 1930s, these barriers to production are manifold.
Also, California is a popular place. A lot of people have moved to California for the past 50 years for access to jobs, for the quality of life.
And so, you have layer upon layer of artificial barriers to building versus a lot of demand drivers that have led to really this sort of extreme deficit of homes.
Those barriers in California have proven to be extraordinarily acute, and have perpetuated and worsened housing deficit over the past several decades.
Q
California lawmakers passed a lot of bills to boost housing production in the past five years, making it easier to build backyard units, subdivide single-family lots, build small apartment buildings in single-family neighborhoods and new housing on commercial land. Is that going to help?
A
I believe so. As has been illustrated in the case of Santa Monica (where developers are seeking to build new homes under the “builder's remedy,” which makes it hard to block plans containing affordable units).
The city actually saw 4,000 units of production (being proposed), a large share of that being affordable.
So, Santa Monica is a perfect case of an exclusionary and affluent suburb that is predisposed to deny housing, particularly affordable housing, from attaining building permissions. And that is really the crux of this issue.
Some folks have called it a tragedy of the anticommons where local governments are working to respond to the voiced concerns of their constituents. But at that level of government, it's very hard to balance those hyperlocal concerns with regional and statewide policy priorities.
We certainly applaud several of the pieces of legislation that have moved statewide, including fixing RHNA (the Regional Housing Needs Assessment program), strengthening the Housing Accountability Act, and some of the direct zoning interventions in SB 9 and SB 10. Our organization worked (to support former Assemblymember Lorena) Gonzalez's bill, AB 2435, which really was, I think, a terrific bill … to provide more allowable unit density on any given site (that includes) affordable housing.
Q
During the NAR conference, you spoke about addressing the “missing middle” of the housing market, not just low-income housing. What solutions are you proposing?
A
The idea of the missing middle is that we used to build a lot of stuff, a lot of different housing typologies. I'd say living in between single-family homes and high-density multifamily housing. So, these are ADUs (accessory dwelling units), backyard cottages, duplexes, triplexes, cottage clusters, even six-plex and eightplex apartment buildings.
In a lot of cities across the country, these types of properties are not allowed under modern zoning codes.
The benefit of (developing the) missing middle is that you can deliver more units in a compact, walkable format that yields all kinds of benefits from economic to environmental, and of course, to affordable because these units by and large are cheaper to construct per door than high-density multifamily.
Yet, they are amazing solutions for infill development, which is a way to leverage existing investments and infrastructure.