California’s High Housing Costs: Causes and Consequences

Published: 2015 | Mac Taylor | Legislative Analyst’s Office

Abstract

The purpose of this report is to provide the Legislature an overview of the state’s complex and expensive housing markets, encompassing both single-family homes and multi-family apartments. We pay particular attention to identifying what has caused housing prices to increase so quickly in recent decades, and provide information to assist the Legislature in making decisions that will affect the future performance of the state’s housing markets. The report covers four main questions: 1) How expensive is housing in California?, 2) What has caused housing prices to increase so quickly over the past several decades and what would it take to moderate this trend?, 3) What are the consequences of California’s high housing costs on the state’s households and the economy generally? 4) What steps should the Legislature take in the near term as it considers how to address the state’s high housing costs?