California has constantly battled with one crisis or another for the past few decades. The latest one to hit the state is a housing crisis. The average home rates are higher than average compared to other parts of the United States.
Not only that, the state is known to have some of the worst traffic and congestion in the country, along with the cost of living being expensive in general.
Why Don’t People Leave?
The question that would be on the minds of most people would then be, “Why don’t people move to cheaper locations with less congestion and a higher chance of getting a better deal on a home, whether to buy or to rent?” The answer apparently lies in the standard of living. It is a highly desirable place to live in for various reasons- the sun and the beautiful California beaches, the presence of Silicon Valley, the movie industry in Los Angeles, and more.
Why are Houses Expensive in California?
The housing in California has been expensive for a very long time. Even during times of economic downturns, the rare occasions when it may have been cheap, very few people took the chance, and still many could not afford it. And now that the economy is starting to bounce back leading to an increase in the job market, but a surprising lack of ability or willingness on the part of the builder to match the demand, cheap houses have all but disappeared.
Is it Fixable? What Can Be Done?
It’s important that builders focus on houses for the mass consumption as much as it does in the luxury homes segment in California despite the fact that upscale housing may possibly be a bit more profitable.
The tussle between the NIMBYs (Not In My Back Yard) and the YIMBYs (Yes In My Back Yard) leads to a distortion of what is needed in terms of growth; the NIMBYs abhor change in housing levels of any sort, even if it’s beneficial, whereas the YIMBYs are the polar opposite, that seek a resurgence of the construction boom and cheaper housing.
The landlords also take advantage of the desire of many people from not just all over the US, but all over the world, to live here. They charge disastrously high rates and hike expensive rates even higher. This simply adds to a problem which is already in desperate need of a solution.
There are no quick fixes to this problem, and while flooding the market with houses so that builders are forced to reduce property prices seems like a viable option, it almost never works.