A new report released Wednesday by the California Building Industry Association found that compared to the national average of 70 percent, only 58 percent of Californians own a home, and home-ownership levels are significantly lower for California’s growing Latino population.
The report, by CBIA Chief Economist Alan Nevin, also found that the state’s home-ownership rate is almost dead last — 49th of the 50 states.
According to the report, California ‘s home-ownership gap has significantly impacted California’s diverse population. For example, in Los Angeles, Latinos constitute 50 percent of the population, yet account for only 28 percent of all conventional home loans. Blacks and non-Hispanic whites have much lower home-ownership rates in California than they do in the rest of the nation.
Putting the percentages into perspective, the report found that if California’s home-ownership rate could be raised to the national average, 1.6 million additional California families would enjoy the financial and social advantages of owning their own homes.
“We must act immediately to begin closing California ‘s home-ownership gap,” said Layne Marceau, CBIA’s 2006 chairman as well as president of the Northern California division of Shea Homes. “Home builders are ready to work together with state and local officials to reform public policies that have prevented too many working families from being able to afford their own home. We have offered real solutions that can help make the American Dream of home ownership a reality for more California families.”
Marceau said enacting reforms to allow more Californians to own their own homes would benefit the state in several ways, noting that home ownership helps individual families prosper, strengthens communities and improves our overall standard of living. Nevin said that the study found that cash-strapped state and local governments, which are always searching for stable revenue sources in order to provide essential services, are missing out on exactly that.
“The study found that if home-ownership rates were increased to just the national average, state and local tax revenues would increase by more than $4 billion a year,” Nevin said. “Getting California to the national average could help fund much needed transportation, flood protection, education and public safety improvements.”
In an effort to turn the tide, CBIA has launched the 2006 Campaign for California Homeownership. The Association’s statewide effort is designed to advocate for public policy reforms that would begin the difficult task of bringing the state’s home-ownership rate up to the national average.
One of the key components of CBIA’s 2006 legislative agenda is Senate Bill (SB) 1800, sponsored by State Sen. Denise Ducheny, D-San Diego, which would ensure that a sufficient supply of land is zoned to meet a community’s long-term housing needs. SB 1800 gives the people certainty to know how and where cities and counties intend to meet their future housing needs and to ensure that a variety of choices, including condominiums and townhomes, are available to California’s diverse population. Additional CBIA legislative measures include construction litigation reform, infrastructure financing, flood protection, fee accountability and reform of the California Environmental Quality Act (CEQA), which CBIA’s report notes is often used as a weapon against home ownership.
“CEQA reform will again be a high priority for home builders,” Marceau said. “Over the years, the threat of lawsuits resulting from CEQA has been a major constraint on building needed housing, because many home builders have had to abandon or scale back projects, resulting in fewer new homes being built and higher costs for the ones that were built.”
The California Building Industry Association is a statewide trade association representing more than 6,500 home builders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals. Home building generates more than $60 billion a year to the California economy and creates an estimated 526,000 jobs statewide, according to CBIA.