California’s future as a place of aspiration is fading for all but the wealthiest residents — with that promise nearly out of reach for young people and new immigrants.
This state has become a place marked both by spectacular successes and by not-so-welcome superlatives. The rise of the tech giants, engines of wealth creation, coexists with the nation’s highest cost-adjusted poverty rate, the second-lowest rate of homeownership among the states and the greatest concentration of overcrowded housing in the nation.
Unfortunately, against this backdrop, California’s leaders have adopted state and local policies that further reduce the prospect of homeownership for most Californians, particularly millennials. These policies largely cut off new development on the urban fringe and steer most new housing into the high-cost, congested coastal areas.
In a drive to promote density and transit use, the state has also disfavored the kind of housing, especially the single-family variety, that many aspire to own, particularly in the pandemic. Worse, this trend works against upward mobility for the working class, because homeownership remains the predominant means by which the non-rich build assets.
Urban planners are right to say that the solution lies in more housing production. But the kind of housing they favor — generally expensive, small and densely packed — does not necessarily reduce prices. Patrick Condon, a professor at the University of British Columbia, for instance, has shown that upzoning (allowing more units in residential zones) in the city has not resulted in less expensive housing in Vancouver, which is one of the most expensive cities in North America.
And then there is the matter of market preference. Even before the pandemic, population growth had slowed significantly in the Los Angeles metro region, with growth soaring in the Inland Empire. Overall, the fastest growth in the last 10 years took place in San Benito County, south of Silicon Valley, and in San Joaquin County. Since the pandemic, this pattern has intensified, with San Francisco, Los Angeles, San Diego and Santa Clara counties all losing population while growth continued farther east in Riverside, Fresno, San Joaquin and San Benito counties.
Exurbs, once written off by urban experts as the country’s “new slums,” are now nationally the fastest-growing areas in the country. The only California metro area listed among the 10 most attractive to millennials, according to the National Assn. of Realtors, is, of all places, Bakersfield.
Rather than push more people into the least affordable areas, perhaps it’s time to revisit suburban and even exurban housing. Over the last decade many new projects have been held up because of regulatory entanglements and environmental and other lawsuits. Major developments like the Tapestry project in San Bernardino County (15,000 new homes marketed to first-time buyers) and the Tejon Ranch, located 70 miles from L.A. and slated for 35,000 homes at build-out, could help relieve housing pressures on urban and inner-ring suburban areas.
But under current regulations, such developments, even after getting local approvals, can take decades to move forward. By contrast, Texas, with one-quarter fewer residents than California, has permitted more than twice as many new housing units this year and has no housing crisis. Tennessee, now one of the 10 most popular destinations for transplants from California, issued permits for nearly 50,000 housing units in 2020, about half the number issued in California, despite having only one-sixth the population of California.
The lack of affordable housing and policies that constrict housing development hit younger working- and middle-class people — including people of color — hardest. These are groups starting out, trying to build assets and financial stability. Indeed, 95% of all new suburbanites over the last decade were people of color.
Homeownership rates statewide are very low compared with other states and painfully low for minorities. In metro San Francisco and metro Los Angeles, the African American homeownership rate is under 35% and for Latinos under 40%. In San Jose, the nation’s most affluent major metropolitan area, and in metro San Diego, the African American homeownership rates are below 30%, while the Latino rate is under 40%, according to the 2019 American Community Survey. At the same time, housing policies and economics have resulted in increased racial segregation in the great majority of metro areas.
The appeal of the suburbs historically is affordability, especially for first-time homeowners. Critics argue that allowing more suburban growth is environmentally unsustainable. But future developments need not be heavily auto-dependent, especially if employment patterns change.
As Alan Berger, an urban design professor at the Massachusetts Institute of Technology, has explained, well-planned developments could reduce greenhouse gas emissions by using rooftop solar, electric cars and eventually autonomous taxis. They could also be designed with open space to support thriving populations of insects, birds and other wildlife.
Irvine, for example, was designed as a suburban city with nearly 270 parks and one-third of the land dedicated to open space. In the 50 years since its development, it has grown into an employment center, with a population of 300,000.
The COVID-19 pandemic may drive us to make some of the changes we need. Huge numbers of office workers are now accustomed to working at home. This shift makes affordable suburban and exurban housing even more desirable. More people, including professionals, are already moving to exurban locations because they aren’t required to be physically in the office.
This epochal shift in the structure of work will be hugely beneficial both to the environment and families. During the pandemic, greenhouse gas emissions from car commuting around the country dropped 50%, in large part because of the increase in remote work. Traffic congestion and commuting time dropped significantly, giving people more time with family and less time in cars. Employers allowing people to work remotely has proved far more effective at reducing pollution and traffic than the state’s focus on mass transit for commuters. (In Southern California, transit ridership has continued to fall, never reaching its 1985 peak despite enormous public investments over the last two decades.)
This is the work-life future California needs to embrace. According to research conducted by several scholars, including the economist Nicholas Bloom of Stanford, more than 20% of work is likely to be remote in coming years — four times the pre-pandemic level. Roughly 40% of all California jobs, including 70% of higher-paying ones, could be done at home, according to research by the Center of Jobs and the Economy.
The growth of dispersed work is an opportunity to build new, more economically and environmentally sustainable communities. Their appeal can be seen in Ontario Ranch, on 8,200 acres in Ontario, Calif., which is now among the top-selling large-scale planned communities in the state and No. 7 in the nation.
Some 1,500 townhouses and single-family houses have been built, and an additional 700 are planned. Its key market, a spokesperson says, consists of young families, millennials and people of color — the demographic groups leaving the state for more affordable housing and cost of living elsewhere. Home prices are around $500,000 to $600,000, which is still excessively high but significantly lower than median prices in neighboring Los Angeles and Orange counties.
To market to buyers who work at home, the development has put in high-speed telecommunications, up to 1,000 megabits per second. It also offers the use of drone delivery systems to deliver packages rather than trucks, e-scooters and even robot carriers to help people lug groceries back home without needing a car.
New suburban developments will, of course, face regulatory hurdles and challenges if the past is any guide. But making it possible for families to live and work outside the most expensive urban areas will be key to upward mobility for a new generation of Californians. That goal is still attainable, but it will take new thinking to turn it into reality.
This story originally appeared in Los Angeles Times.