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Thursday, March 26, 2015

California's Housing Costs Hurt Economy

California has some of the most expensive housing markets in the U.S.--a result of the slow pace of development in high-demand coastal cities. The average home price in California, $440,000, is about 2 1/2 times the national average, while California's average monthly rent, $1,240, is about 50% higher than the average U.S. rent, according to a report released Tuesday by the state legislature's independent analyst.

"The state's high housing costs make California a less attractive place to call home, making it more difficult for companies to hire and retain qualified employees, likely preventing the state's economy from meeting its full potential," the report's authors wrote.

That high cost is largely driven by a slow pace of construction in the state's major coastal markets, where demand for homes is highest and prices are bid up, the report said. Between 1980 and 2010, for instance, new home construction in the state's coastal metro areas increased by 32%, compared with 54% nationally, the report said. In Los Angeles and San Francisco, the supply of new housing grew even more slowly, by about 20%.

Read more: http://www.nasdaq.com/article/californias-housing-costs-hurt-economy-increase-poverty-report-finds-20150317-01055

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