The Shaky Foundation Underlying CA's New Long-Range Regional Plans

Wendell Cox rebuts the work of Arthur C. Nelson, who has projected CA as over-supplied with detached housing and in demand of small lot and multi-unit housing. Nelson's work has been the basis of long-range regional planning throughout the state.

Cox takes on the findings of a "sea-change" in household preferences away from suburban housing made by Nelson, Professor at the University of Utah, in a paper published by the Urban Land Institute and housing demand models developed for California's four largest planning regions. As Cox notes Nelson's "demand estimates rely strongly on data from three early 2000s stated preference surveys conducted by the Public Policy Institute of California (PPIC)...which can mislead if people act differently when they make choices in the real world."

Cox conducts his own analysis and comes to the opposite conclusion of Nelson with regards to housing supply and demand in the state. Using the actual change in housing by type from the 2000 Census data to the latest American Community Survey (ACS) 2006-2010 data, Cox finds that, "the demand data indicates a strong continuing preference among Californians for detached housing on conventional lots...If there is a sea change, it would appear to be in multi-family housing. In contrast with the 62% share for multi-family dwellings modeled by Nelson, the actual demand indicated in the census tract data was two-thirds less, at 19% (Figure 3), well below the supply of 43 percent in 2000. This suggests a tanking of demand for multi-family housing, even as builders, in California and elsewhere, put more product on the market."

If accurate, Cox's models would upend the basis for much of the state's much lauded long-range regional planning



Full Story: A Housing Preference Sea Change? Not in California


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