My extended family spans from third to seventh generation Mexican immigrants. Most of us expect to work hard, provide for our families, and hope our children do better than we did. However, in a total Blue State betrayal of the political, environmental, and civil rights progress that began in the 1960s, younger and middle-income Latino families can no longer afford to buy a home in California.
Much of the Democratic party’s traditional middle-income constituency include small business owners, first responders, and the army of the “essential workers” who were directed to work during the prolonged COVID-19 lockdowns. These groups earn too much to qualify for housing assistance, but too little to live in the state’s most expensive population centers.
Economist John Husing showed that even the highest-paid construction workers cannot afford to buy a median priced home in any Southern California county that touches the ocean, or any Bay Area county that touches San Francisco Bay
Homeownership is by far the most effective multi-generational wealth accumulation investment for working families. According to Habitat for Humanity, homeowners have four times the net wealth of non-homeowners. They are also physically and mentally healthier, vote more often, and their children achieve higher levels of education. Owning a home in the working-class Bay Area town of Pittsburg, in Contra Costa County, was a far superior economic and quality of life choice for my parents and grandparents rather than paying landlords rent in San Francisco.
Today, however, middle-income home ownership is thwarted by urbanists who solely desire denser cities as well as environmentalists who condemn any development, even of fallow pastures next to urban freeways as unsustainable “sprawl”. Vast areas of the state where affordable, desirable housing could be built are exclusive, high-income, and largely white “green’ enclaves.
For example, Marin County, which is located a scant two miles from San Francisco has proudly banned homes on over 83% of its land. Marin has the region’s lowest Latino population (about 17% of all households) and has one of the region’s highest median incomes and home prices. It is essentially still a “sundown town,” a segregated area during the Jim Crow era where people of color were encouraged or forced to vacate each night. Over 60% of the county’s workforce commutes from other counties where housing is more affordable.
Scores of studies have bemoaned California’s housing crisis. Yet, the state continues to favor policy reforms that focus on high-priced infill housing. Truly affordable home building outside of these areas is seen as harmful to the environment and anti-climate. At the same time, the state’s profligate spending and record deficits are draining revenues from local governments which forces cities and counties to boost development fees for local service funding. The state is utterly failing to provide “missing middle” affordable housing, or indeed any housing for hard-working families and households.
Background: Progress Report on California Housing Law Reforms
Starting in 2017, an all-Democrat slate of statewide leaders enacted the first few dozen laws — which have now grown into more than 100 — aimed at solving California’s acute housing crisis. Total housing production continued to hover between 110,000 — 1118,000 new housing units per year but these figures conceal the fact that single family, condominium and apartment construction stagnated or fell. Instead, accessory dwelling units (ADUs) — granny cottages and garage apartments built in someone else’s home — rose from nearly nothing to 19% of all new housing permits in 2022.
ADUs are most popular in Los Angeles County, where 49% of the population is Latino. They provide homeowners with rental income opportunities and nearby living units for family or friends who would otherwise be forced to move to more remote, but affordable locations, including other states. But ADUs do not provide the same generational wealth-building benefits as owner-occupied housing and are not well-suited for households with children.
Despite the new laws, affordable single and multifamily housing production - particularly compared to competitors like Florida and Texas — continues to be blunted by California’s increasingly stringent “CalGreen” building code costs, fees and exactions that can exceed $150,000 per unit, as well as high cost cleanup or utility improvements required to reuse urban infill sites. Infill housing costs have skyrocketed to the point that infill proponents concede that even staggering expensive rental housing development is not feasible in major California urban areas. A multi-family project charging over $4,000 per month for a small two-bedroom unit touted as an infill housing solution in 2019 simply did not “pencil” almost anywhere in 2023.
California’s inability to produce affordable for-sale and rental housing particularly harms the aspirations of Latino households. According to the Public Policy Institute of California, Latinos are far more likely to have children. In 2022, the median annual income of a U.S. born Latino household was estimated to be $70,000, and $55,000 for a foreign born household, compared with $90,000 for white and $100,000 for Asian households.
These incomes are far too small to rent a $4,000 per month apartment, which requires annual earnings of at least $160,000 to avoid paying more than 30% of total income on housing, the standard threshold for excessive housing costs. California Latino households have much lower homeownership rates compared to white and Asian households. Only 45.4% of California’s Latinos were homeowners in 2021, compared to 63.6% of California’s non-Latino white population. California Asian households had a homeownership rate of 60 percent. African Americans rates were also far lower than in other states.
Read the full report (PDF; this section starts on page 27)
Jennifer L. Hernandez has practiced land use and environmental law for 40 years, and leads Holland & Knight’s West Coast Land Use and Environmental Group. Ms. Hernandez is the longest-serving minority board member (23 years) of the California League of Conservation voters, was appointed by President Clinton to serve as a trustee for the Presidio National Park in San Francisco, serves on the board of directors for Sustainable Conservation, and teaches environmental justice at the Univeristy of Southern California Law School. Ms. Hernandez graduated with honors from Harvard University and Stanford Law School. She and her husband live in Berkeley and Los Angeles.
Photo: Lucas Valley, Marin County. Source: Mark, via Flickr, under CC 2.0 License
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