California's Growing Housing Imbalance

Robert Steuteville looks at a recent report on the Golden State's supply and demand imbalance in the housing market. It's not what the The Wall Street Journal has led you to believe.

2 minute read

May 2, 2012, 11:00 AM PDT

By Jonathan Nettler @nettsj


Despite recent pieces in The Wall Street Journal decrying the efforts of California's public officials and planners to implement smart growth initiatives throughout the state, Steuteville looks to the findings of a recent study written by University of Utah researcher Arthur C. Nelson, and published by the Urban Land Institute, and argues that the state's biggest housing challenges are exactly the opposite of the crisis described by Joel Kotkin and Wendell Cox.

Nelson's study, titled "The New California Dream: How Demographic and Economic Changes May Shape the Housing Market", reports that demographic and market changes are producing a growing imbalance between the supply and demand for suburban style single-family and transit-accessible housing. However, contrary to the picture painted by the Journal, the unmet demand is on the transit-accessible side, and the over-supply is in conventional lot single-family homes.

According to Steuteville, "California could build nothing more than transit-oriented development in the next quarter century and still not meet demand. 'The bottom line is that as many as 9 million households would like the option to live in locations served by public transit, but today only about 1.2 million California households can claim to have it,'" the report explains.

Steuteville continues, "Another major finding focuses on the supply of conventional-lot single family housing...Even if no new suburban-style single-family housing is built, there will still be an oversupply of more than two million of these kinds of units in California in 2035...In California's four largest metropolitan planning areas (MPOs), which include a majority of the state's population, current supply is 84 percent higher than projected demand for conventional single houses in 2035, 23 years from now."

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