Monday, July 9, 2018

Affordable Dwelling Units, CEQA and Homelessness

While California may have the highest average income in the nation, it also has the highest adjusted poverty rate. The tech boom and the general run up in the California economy has led to an influx of high-wage workers. This influx has been coupled with an already existing wealthy population and low housing density in urban centers like San Francisco. Though a six-figure income sounds great to people in other parts of the country, people making $100,000 to over $200,000 per year struggle to afford the cost of living in San Francisco. Many well-paid workers are forced to commute several hours a day because they are unable to afford housing near their jobs.

Housing prices in the Bay Area, Los Angeles, and San Diego have increased by a whopping 75 percent in five years. Though that's great news for many homeowners and real estate investors, an affordability crisis has taken hold across the state. Many of California's politicians are working on plans to alleviate the crisis, seeing solving the affordability problem as the key to maintaining the state's economic growth. Proposals include increasing the number of affordable dwelling units (ADUs), cracking down on CEQA lawsuits that prevent housing development, and alleviating homelessness.

ADUs Becoming A Hot Topic in California's Urban Centers

Politicians who want to solve the housing crisis love them. Neighborhood associations that don't want the character of their neighborhoods to change do everything in their power to stop them. Real estate investors and many homeowners see an opportunity in ADUs.

Also known as in-law apartments or granny flats, ADUs provide a small living space on the grounds of a larger house. For those with extended family, these provide a great way to help family members avoid high rents. With California's housing affordability crisis in full bloom, they can also provide more rental units in a tight market.

The cost of building ADUs makes them an attractive investment in areas with very high property values, like San Francisco. In cheaper markets, the owner may not be able to charge enough rent or gain enough appreciation to profit. In California, there is plenty of room to create an income stream with ADUs.

CEQA Lawsuits

The CEQU, or the California Environmental Quality Act, is a statute that requires state and local agencies to identify the significant environmental impacts of their actions and to avoid or mitigate those impacts, if feasible. It helps to regulate developments which may be harmful to the environment. There is significant increase in claims that suggest ADU helps to reduce peoples need to commute, which may actually help the environment. Leaving a rising tide of California state politicians to push for a stop on CEQA lawsuits.


Not surprisingly, with rents and home prices skyrocketing, homelessness across California is rising to crisis levels. In many cities like Los Angeles and San Francisco, homeless people wander the streets at night or sleep in makeshift shelters or tents. Many have converted vans into living areas with makeshift kitchens. Others live in RVs, which they often tuck away in quiet neighborhoods.

Without action to alleviate the homelessness crisis, many lower-wage workers will leave the area in search of a better life elsewhere. When people work but still can't afford a place to live, remaining in the area becomes too difficult. The question of where priced-out people will go and who will fill the jobs they leave remains unanswered, though many political leaders in the state are sounding the alarm bells and demanding a solution.

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