Walters: High housing costs keep Californians poor

A Texan is richer than a Californian, even if the California earns 20% more than the Texan.  Texas has no income tax—that saves them 13% a year on their earning.  The cost of housing in Texas is at least one third less than in California.  Plus, the other high taxes, the significantly higher, by at least 30% for the cost of energy in California over Texas.  Now you understands why California has the most homeless, both in raw numbers and percentages, they have the most people living in poverty.  Government, not bad economic conditions, not the canard of climate change—it is Democrats running the State into the ground.

“Moreover, even before recession struck, the Public Policy Institute of California, using methodology similar to that of the Census Bureau, had calculated that as high as our “supplemental poverty rate” may be, roughly the same number of Californians are in “near-poverty.” Combining the two categories means that about a third of the state’s residents are struggling to keep their heads above water.

The major driver of California’s high poverty indices is, as mentioned earlier, that too many Californians must spend too much of their incomes on housing due to meager construction.

The reasons for the failure to meet housing demand are many but one long-ignored factor — the insanely high cost of building so-called “affordable” housing — is beginning to be recognized.

Last year, I wrote about a $28 million city-financed project to rehabilitate 74 dilapidated, low-rent apartments in Sacramento and noted that it worked out to $378,000 per unit, markedly higher than the median cost of a detached, single-family home in Sacramento at the time.

Why the high costs?  The payoffs to the unions and special interrsts, at the same time crating environmental regulations that boost the cost of housing so few can afford.  California is collapsing before our eyes and the media is still making up stories that Gavin Newsom, because he is white, is a racist—but a “good” one.  The media has failed us.

High housing costs keep Californians poor

by Dan Walters, CalMatters,   9/20/20  

In summary

California still has the nation’s highest poverty rate, thanks to our high housing costs, which restrict much-needed construction.

Congratulations California, you’ve done it again.

The Census Bureau has once again found that California has the highest real-world poverty rate of any state, 17.2% over the previous three years and much higher than the national rate.

The “supplemental” poverty rate includes factors ignored by the outdated “official” poverty rate, such as living costs. And our sky-high living costs, particularly for housing, impoverish at least 7 million Californians.

We topped the poverty charts even as California’s overall economy was booming in the 2017-19 period. The state now is mired in its worst recession since the Great Depression, thanks to the COVID-19 pandemic, and poverty has surely increased.

A new report from the California Policy Lab at the University of California reveals that in August nearly 20% of California’s workers were drawing unemployment insurance benefits, calling it “startlingly high.”

Moreover, even before recession struck, the Public Policy Institute of California, using methodology similar to that of the Census Bureau, had calculated that as high as our “supplemental poverty rate” may be, roughly the same number of Californians are in “near-poverty.” Combining the two categories means that about a third of the state’s residents are struggling to keep their heads above water.

The major driver of California’s high poverty indices is, as mentioned earlier, that too many Californians must spend too much of their incomes on housing due to meager construction.

The reasons for the failure to meet housing demand are many but one long-ignored factor — the insanely high cost of building so-called “affordable” housing — is beginning to be recognized.

Last year, I wrote about a $28 million city-financed project to rehabilitate 74 dilapidated, low-rent apartments in Sacramento and noted that it worked out to $378,000 per unit, markedly higher than the median cost of a detached, single-family home in Sacramento at the time.

Last week, two more examples found their way into print.

The Los Angeles Times did a deep dive into the tortured history of a low-income housing project in Solana Beach, a wealthy seaside community in San Diego County. Times reporters found that it originally was to cost $414,000 per unit, but by the time the developer pulled out after a decade of trying to line up financing and permits, it had exploded to $1.1 million.

The Times called it “an alarming example of how political, economic and bureaucratic forces have converged to drive up the cost of such housing at a time when growing numbers of Californians need it.”

“California leads the nation in the cost of building government-subsidized apartment complexes for low-income residents,” the Times said, reporting that its “analysis of state data found that apartments cost an average of about $500,000. In the last decade, the price tag has grown 26%, after adjusting for inflation.”

Solana Beach is not alone. The Times reported that in Alameda, an island community in San Francisco Bay, a low-income development called Everett Commons cost $947,000 per unit.

Meanwhile, back in Sacramento, city housing officials are still spending too much to get too little. The Sacramento Bee reported that redeveloping the downtown Capitol Park Hotel into tiny, 250-square-foot units for low-income residents costs more than $445,000 per unit, higher than the median price for a detached single-family home. At $1,100 per square foot of living space, it is double what a luxury suburban home would cost.

These are outrageous numbers, driven by bureaucratic tangles, misplaced environmental restrictions and high mandated labor costs, and unless state officials do something about them, we will never solve our housing shortage and we will continue to have shamefully high rates of poverty.

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.

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