Housing affordability problems in California remain real and pervasive, no matter who is in the White House. That was the message at last week’s California Association of Realtors (C.A.R.) Real Estate Summit, “Housing Affordability and California’s Future.”

  • At the California Association of Realtors (C.A.R.) Real Estate Summit, leaders focused on the state's most pressing housing issue: affordability.
  • With regard to President-elect Donald Trump, industry professionals spoke to the benefits of having a real estate insider in charge as well as his unclear policy plans.
  • Experts are concerned about how future generations will be able to make homeownership work in the Golden State.
  • Carol Galante, faculty director of the Terner Center for Housing Innovation, called for bold ideas in infrastructure and building to remedy broken housing systems.

Housing affordability problems in California remain real and pervasive, no matter who is in the White House.

That was the message at last week’s California Association of Realtors (C.A.R.) Real Estate Summit, “Housing Affordability and California’s Future.”

Housing experts said that combination of high rents, low supply and under-building have made homeownership out of reach for many would-be buyers and demanded bold solutions to fix systems that, if continued, would disservice future generations in the Golden State.

While the liberal-leaning Californian housing industry was still digesting the news of a Republican presidency, industry professionals also spoke to the benefits of having a real estate insider in charge.

“We do have a President[-elect] who loves real estate, maybe not the type we need, but he loves real estate,” said C.A.R. CEO Joel Singer, noting that the market reaction had been positive from an economic standpoint so far.

Rising rents, high demand, and low homeownership levels

In the presidential campaigning season, housing was not addressed in any great detail, so there’s been tremendous uncertainty about how the industry might be affected by a Trump government, Singer added.

“Will Janet Yellen be replaced, and what about HUD [Department of Housing and Urban Development] and the FHA [Federal Housing Administration]?” he asked.


Public policies that block people from being able to afford a home in communities where they work are responsible for a historically low California homeownership rate of 54 percent, said the association.

Another key element restricting potential buyers in the hot California markets is the high cost of rent, which hinders consumers’ ability to save even a slight down payment. In California, 50 percent of renters can’t afford to buy, and are not planning to.


He added that low-income housing can get a bad rap, but it is being executed well in parts of California: “When you show people well-designed new low income apartments — and we do this with our Realtors — we take them to recent projects in Oakland and they are stunned by how they lift an area.”

And California’s hot property market is not going anywhere. “California has an affordability issue but really we have a housing supply issue,” Singer said. “Until we get more housing, none of this should surprise us.”

Infrastructure and housing investment should go hand-in-hand

Meanwhile, the keynote speaker at the C.A.R. summit, Carol Galante (the I. Donald Terner Distinguished Professor in Affordable Housing and Urban Policy at the University of California, Berkeley) urged real estate professionals to be bold with their ideas on solutions for housing affordability and supply.

She also pointed out some positives of a Donald Trump presidency.

“Trump will have a better ability to get an infrastructure proposal through Congress, so I think there is an opportunity there,” she said.

She suggested talking about infrastructure dollars and “how we use it in a housing context.”

“I think we should start to include that in our thinking and messaging,” she told the audience of real estate professionals.

Infrastructure plans by the government could include residential development opportunities around transit projects, for instance.

“We have been under-building for decades; now we could take that building and place it in new locations where we have not traditionally been building,” she said.

“If there is any new shiny penny for us to focus on, this has a good chance to turn into something.”

Realtors called on to help with new ‘granny flat’ movement

Some progress is already happening in increasing the new housing stock in California, added Galante.

She called on California real estate agents to help homeowners find properties where it was possible to add mother-in-law units or “granny flats” in their backyards or within their homes.

In August, the California State Assembly approved State Senator Bob Wieckowski’s (D – Fremont) bill to eliminate excessive fees and restrictions that discourage the building of accessory dwelling units (ADUs), also known as granny flats, in California.


“In California, 65 percent of our housing stock is single-family homes –they are not going anywhere. In California, in most neighborhoods, these are valuable properties,” she said.

Building studios or small housing units next to main homes is what some call “invisible density.”

“You could add 100,000 units [in California] if we got people interested in building accessory homes. But you need to have innovative, entrepreneurial folks out there who want to pick this idea up,” she added.

She noted that Realtors will be very important in identifying these properties — they are well-suited for this task.

Bold thinking, of course, may get shot down; it calls for disparate interest groups to come together, but it is time to be innovative, said Galante, noting that the focus should be on expanding supply and working on ways to lower the cost of construction.


“We have got to find a way with multiple solutions to make these things happen or our children are going to move Portland or Austin,” said Galante.

Climate change still a priority in California

No matter what the federal government is planning, California would remain committed to climate change — and housing is associated with that, Galante told the summit attendees.

“We have to continue to have focus on climate change and how we use housing to meet those climate change goals. The state of California is not going to back out of its climate change goals,” she said.

Galante is also hoping to see more innovation from mortgage companies in the coming years.

There are lease-to-purchase programs from innovators who want to supply a more affordable way to help people go from renting to ownership, she said.

Let the young take up the baton

“Where will our children live?” she concluded.

“Young adults are working hard; they want to stay in California; they care about just, equitable living environments; they care about the environment and these folks are waking up.

“We need to bring them into the tent and work with them so they can help advocate for some of these bold solutions that are necessary if we are to move the dial on housing affordability in California.”

Email Gill South.

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