Housing Crisis in California: A Look at the State of Affordability in 2023

The housing crisis in California continues to worsen, according to a new Harvard study. Despite more people leaving the state, housing remains increasingly unaffordable for those who stay. The 2023 State of the Nation’s Housing report from Harvard University’s Joint Center for Housing Studies reveals that the market for both for-sale and rental houses has cooled, but costs remain high.

Home sales and construction are down, slowing price appreciation, while the rise in rents has eased and more apartments are vacant. However, the grim reality of housing in 2023 is that millions of households are priced out of homeownership, facing housing cost burdens, or lacking shelter altogether. This disproportionately affects people of color, highlighting the need for policies to address the national housing shortfall at the root of the affordability crisis.

California has been hit particularly hard, losing a significant number of lower-cost rental units. The state experienced the most notable growth in homelessness nationwide since 2020, with an increasing number of people leaving the state. Net moves out of California jumped from 208,000 in 2019 to 340,000 in 2022, with concerns about healthcare and housing costs driving the exodus.

The solution to the housing crisis, according to the report, is to build more affordable housing. Expanding the supply of new homes and improving the existing housing stock is crucial. However, challenges such as rising risks of climate-related disasters and zoning reform need to be addressed to support a broader range of housing types and reduce development costs.

State officials have been working to boost housing stocks, with a call for planning more than 2.5 million homes over an eight-year cycle. Efforts to enact more flexible zoning rules and allow for the construction of accessory dwelling units (ADUs) have been made, but not without pushback from some cities and residents.

Despite these efforts, California lags behind other states in adding to its housing stock. Some of the fastest growth in housing is happening in states like Utah, Idaho, and Texas, where fleeing Californians are known to move. The housing crisis in California remains a significant challenge, with no easy solutions in sight.