Published
4 years agoon
As he was running for governor, Gavin Newsom repeatedly and emphatically promised to attack California’s housing shortage head-on, pledging in an online article to “lead the effort to develop the 3.5 million new housing units we need by 2025 because our solutions must be as bold as the problem is big.”
During his inaugural address in January, Newsom said he would implement “a Marshall Plan for affordable housing,” likening it to the reconstruction of Europe after World War II.
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It was never going to happen — and perhaps it shouldn’t.
The 3.5 million figure comes from a 2016 study by McKinsey & Company on the San Francisco Bay Area’s very tight housing picture, based on an assumption that California should have the same per capita housing level as New York, despite obvious demographic and cultural differences.
A critical examination of the McKinsey conclusion by the Palo Alto-based Embarcadero Institute contends, logically, that Texas would be a better basis for comparison and using it indicates that California needs another 1.5 million units, not 3.5 million. Based on nationwide housing trends, the Embarcadero study concludes, the number would be 1.4 million.
Those lower numbers would translate into a need for about 200,000 housing starts a year, which comports with the state’s official goal of 180,000 units a year or 1.1 million by 2025, still much higher than current production but in line with what’s happened in years past.
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So while California may not need 3.5 million new units, it still has an acute shortage that would take tens of billions of dollars in annual investment — plus political will and thousands of more construction workers — to erase.It can’t happen overnight, as Newsom now — and belatedly — concedes, but it could happen if all the ingredients could be assembled.
Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He has written more than 9,000 columns about the state and its politics and is the founding editor of the “California Political Almanac.” Dan has also been a frequent guest on national television news shows, commenting on California issues and policies.
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