LOS ANGELES (Oct. 28, 2024) – The Center for California Real Estate (CCRE) has just released its list of top issues and insights in housing this year, reflecting the past 10 months of conversations among the state’s leading government, academia, nonprofit and business leaders working together to tackle California’s multi-faceted housing challenges.
The list comes just ahead of the Center’s flagship event, the CCRE Housing Summit: Charting California’s Future, on Wednesday, Oct. 30 in Los Angeles. Arguably the most important statewide housing event of the year, the Summit features industry, academic, civic and private sector experts convening to analyze the current political environment for implementing housing policy changes, examine the state of homeownership for Californians, and explore broad strategies for enhancing housing supply.
“This is a critical time in housing with many different issues converging that impact our ability to deliver what Californians need,” said Melanie Barker, 2024 president of the CALIFORNIA ASSOCIATION OF REALTORS®. “The Center for California Real Estate was created for exactly this purpose ― to bring together the best minds from across the state and country to have frank conversations about what’s happening on the ground, what’s impeding progress and what needs to be done to help solve the biggest challenges in housing and real estate.”
The year that began with a spotlight on interest rates and housing affordability quickly shifted focus to homeowners insurance as the leading issue impacting housing and homeownership, which dominated news cycles.
The need for immediate consumer participation and action drove this year’s housing news to a new level of awareness across the state, as homeowners, buyers and sellers sought to replace canceled insurance plans and capitalize on market changes.
The below issues and insights are summarized from a series of conversations across the state this year hosted by the Center for California Real Estate.
- Insurance: relief in sight, but still far off
With insurance rates skyrocketing, large carriers leaving the state and major legislative changes underway, homeowners insurance was far and away the biggest issue in the housing sector this year.
- The CALIFORNIA ASSOCIATION OF REALTORS® reported 7 percent of members surveyed in 2023 had a transaction fall through last year due to the inability to obtain affordable insurance.
- Mark Sektnan, vice president of State Government Relations, American Property Casualty Insurance Association, reported that for the last decade, insurers have been paying out $1.13 for every dollar they’ve taken in.
- While Insurance Commissioner Ricardo Lara shared his commitment to delivering major insurance reforms around rate change rules by the end of the year to help bring carriers back to the state, relief will not be immediate. Insurers need more expedited processing and approval by the California Dept. of Insurance, and time to implement the changes.
- Housing Supply: Reversing a decades-long issue
- State legislative action is not delivering enough support for more housing. “In Sacramento this year, there were two bills that were housing creators and eight bills that were housing killers. Still, after all these years of housing crisis, we get more bills that are housing killers,” said Jeff Schroeder, SVP, Land, Planning & Operations, Ponderosa Homes.
- Consumer advocacy is key to reversing decades of underinvestment in housing. “If we’re going to make a dent in this housing crisis, we need to change the hearts and minds of the larger public,” said Xiomara Cisneros, Senior Program Officer of Housing Affordability, Chan Zuckerberg Initiative.
- A multi-pronged approach to supply is necessary to address the current shortage. “We have to continue to advocate for resources, for policy to preserve, protect, and produce,” said Noni Ramos, CEO of Housing Trust Silicon Valley. “It must be all three strategies ― it’s the only way.”
- Historic approaches are being reevaluated in an ‘everything is on the table approach’ to solving supply issues. “We’re going to have a reckoning about how we want to address CEQA in a more holistic way, for the protection that is needed, but not a barrier that delays projects for years because of frivolous lawsuits ― that is the balance,” said Assemblymember Pilar Schiavo.
- Affordability: an uphill climb with solid solutions and case studies
- Affordability is an issue at all income levels. C.A.R.’s 2024 second-quarter Housing Affordability Index (HAI) shows that just 14 percent of California households can afford a median-priced home and must earn at least $236,800 annually to do so.
- Outdated zoning practices, excess permitting and bloated costs such as impact fees that can cost upwards of $100,000 per unit make projects increasingly less affordable at all levels.
- Improved supply has a direct impact on price mitigation. “In San Diego where we used to be doing 2,000 or 3,000 permits of new housing a year, this year we are up to 9,000 units of housing under permit right now. And we are seeing a stabilization in the rents because supply and demand is a real thing,” said Assemblymember Chris Ward.
- The need for an inclusive process that enables underrepresented communities such as seniors and minorities to participate is vital, from advocacy at meetings to designing targeted solutions to releasing significant wealth into the economy. Robert Kleinhenz, director of the Office of Economic Research at California State University, Long Beach, suggested that seniors liquidating assets at a rate of 3 percent could inject a substantial $300 billion into the economy ― enough to add a percentage point of growth nationally.
For detailed information and reports about each of the events hosted this year by the Center for California Real Estate, please visit http://ccre.us.
About the Center for California Real Estate
The Center for California Real Estate (CCRE), an institute of the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), advances knowledge and research by collaborating with varied partners, spurs innovative thinking about key issues facing California and the real estate industry, and extends C.A.R.’s influence via intellectual engagement with different audiences, diverse stakeholders and new external partners.
CCRE serves as a nexus for multi-disciplinary thinking aimed at solving some of the state’s most challenging issues. Bringing together key experts from a variety of fields — from academics and policymakers to industry leaders — CCRE produces new knowledge and serves as a key resource about housing issues for all C.A.R. members, external entities, the media and the public.
About the CALIFORNIA ASSOCIATION OF REALTORS®
Leading the way…® in California real estate for nearly 120 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
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