www.nytimes.com/2006/05/07/realestate/07california.html
By ALINA TUGEND Published: May 7, 2006 IN 2005, the least-affordable place in the country to live, measured by the percentage of income devoted to mortgage payments, was Salinas, Calif.
Forum: Owning and Renting a Home The second was the Santa Cruz-Watsonville area of California. In fact, California has the distinction of having the 11 least-affordable metropolitan areas in the country. One would need to go all the way down to 12th place and across the country to the New York region's northern suburbs to find a non-California metropolitan area on the least-affordable list of 2005. It has beaches and the mountains and, of course, the weather. But why are places like Salinas, which is surrounded by agriculture, topping places like Honolulu (No. There is no one answer, but demographers and public planners who study such trends say that a confluence of factors in California both artificial and natural have combined to create a particularly acute problem. "California has both political and geographical constraints on building," said Dowell Myers, professor of policy, planning and development at the University of Southern California. The geographical limits on developable land are the hills and the coast, while the political restrictions are state and local regulations that prevent building new homes, in response to both environmental and congestion concerns. "One of the key factors here is the basic law of supply and demand," said James W Hughes, dean of the Edward J Bloustein School of Planning and Public Policy at Rutgers University.
It's more like the New York suburbs, where too many dollars are chasing too few homes." While many states have regulations on growth, California is a leader, Dean Hughes says. California is also in the forefront of population growth, but it is not driven, as might be expected, by envious Easterners and Midwesterners escaping snowbound winters. In fact, census figures show that over the past decade, more people have left California emigrating to neighboring states like Nevada and Arizona and farther away, to Texas and Florida than have moved in from other parts of the country. The population increase is driven primarily by births and foreign immigration. According to census statistics, from April 2000 to July 2005, California experienced a net natural increase taking into account births and deaths of 15 million people. And an additional 14 million moved in from other countries. While California's birth rate is not the highest in the nation Utah's is it is near the top. "New York has the constraints but doesn't have the population growth," Professor Myers said. "Florida has the population growth but doesn't have the constraints." While it is difficult to build new houses in California, that isn't to say none are going up. According to the California Association of Realtors, there have been increases in the number of housing units built over the past nine years from 94,283 in 1996 to 207,154 in 2005. That is substantially more than the low in 1993, when California was in the throes of a severe economic recession and only 84,656 units were built. But it's not as prolific as in 1988, when 255,559 went up. There are a number of reasons for the restraints on home building, including the fact that many desirable areas in the state are already "built out" and the permit process is more complex and drawn out now than it was a few decades ago. Leslie Appleton-Young, chief economist for the Realtors group, said the state needs about 250,000 units a year to meet housing demand. "We've been below that every year over the past 10 years," she said. The high demand and low supply created a perfect breeding ground for investors and speculators, which became "the last straw" in driving housing prices up, said David Seiders, chief economist for the National Association of Home Builders. Another quintessentially California issue is Proposition 13, the 1978 measure that slashed property taxes by more than 50 percent and ignited a national property tax revolution.
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