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A Toolkit for Solving California's Housing Crisis

The McKinsey Global Institute wants to help California build 3.5 million homes by 2025.
October 26, 2016, 9am PDT | James Brasuell | @CasualBrasuell
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"California will have to build about 3.5 million homes over the next eight years, more than triple its current pace of construction, simply to keep up with expected population growth and hold down housing costs to affordable levels," begins an article by Conor Dougherty and Karl Russell.

That premise introduces the policy recommendations contained in a new report from the McKinsey Global Institute. The "Closing California's housing gap" provides a toolbox to help the state increase housing production in an era of scarcity, constrained by various levels of local controls. "Those ideas include streamlining grants of local permits, and using tax policy to withhold money from anti-growth cities that drag their feet on new housing," according to Dougherty and Russell.

The headlining policy idea, however, is to build on the vacant plots of land in the state's urban areas. The article includes maps of the Los Angeles region and the city of San Francisco, showing the broad swaths of land available to build "225,000 or so homes and apartments."

An article on the McKinsey Global Institute website has more on the methodology and findings of the study:

To understand the nature of the problem, we built a quantitative model to identify California’s housing affordability gap by household and location. To do this, we segmented the state’s more than 12 million households into 34 housing markets and 16 income bands, and assessed each household’s ability to afford housing in their local market. We learned that 50 percent of California’s households cannot afford the cost of housing in their local market. Virtually none of California’s low-income and very-low-income households can afford the local cost of housing.

Full Story:
Published on Tuesday, October 25, 2016 in The New York Times
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