A new report from Harvard University’s Joint Center for Housing Studies highlights California’s continuing struggle with high housing costs — an issue that the Little Hoover Commission addressed in a report in 2022.

The annual report — which provides a snapshot of the country’s housing landscape — puts a spotlight on California’s housing affordability challenges. The report shows that in 2022, nearly one-third of California homeowners were cost-burdened.

In 12 of the California metro areas analyzed, the median sales price was at least eight times the median household income in 2023, compared to a national median that is five times household income.

And for a growing number of Californians, the high housing costs are too much to bear, as the state’s homeless population was 53 percent larger in 2023 than a decade prior.

The commission examined the state’s affordable housing crisis and its devastating impacts in our report, California Housing: Building a More Affordable Future, released in 2022. They learned that California’s record-high housing prices were in part due to its limited supply of housing.

They also found that state policymakers needed to do more to increase the development of and access to affordable housing — but that there were specific issues standing in the way of these efforts.

For one, the state’s primary method of helping homebuyers was through down payment assistance. But with a limited supply of potential homes available, this just resulted in buyers bidding up housing costs.

Furthermore, similar housing functions were spread across four different agencies and divided under the purview of the governor and the state treasurer. This structure, the commission found, was inefficient and resulted in service gaps.

The state also lacked key pieces of information that would help state leaders better understand the housing crisis and potential solutions. Some of the needed data existed already, but it was not always clear how policymakers could use it to make housing more affordable. Antiquated technology also got in the way of progress. Other data was simply missing.

Finally, California has a lengthy history of racist and discriminatory housing policies. Laws and practices have enabled groups to be excluded from property ownership or forced into low-value areas. Those harmed by these actions are hit particularly hard by the state’s high housing costs, as they were denied generational wealth-building opportunities.

The commission offered several recommendations for state policymakers to address these challenges:

• Build more houses: Expand its affordable housing strategy — in both policy and funding — to include a greater emphasis on affordable home ownership. This effort must also include an emphasis on increasing housing supply to avoid being counterproductive.
• Organize government more efficiently: Consolidate housing functions. Formalize a strategic working relationship between the governor and state treasurer and the agencies they oversee.
• Jumpstart affordable housing production: Create targeted working groups to tackle logistical and policy challenges. Build in CEQA flexibility to expedite projects.
• Get data and use it: Identify and fill housing data and analysis gaps. Start with development fees, mass home purchases by institutional investors, and the cumulative impact of laws and regulations on the cost of housing. Use this information in policymaking.
• Address historical inequities and prevent new ones: Invest in “shared equity” models. An emphasis should be placed on those who have been hurt by discriminatory policies and practices.