On September 16, 2021, Governor Newsom signed one of four planned bills directed at enabling housing construction into law, but many are frustrated that the laws themselves don’t appear to accomplish what they were supposed to. While the California Legislature, and the Biden Administration have made clear that they aim to address the affordable housing crisis, the new California law simply makes it easier to divide single lots into two lots.
Many researchers have noted that the 144% increase in median home cost between 2019 and 2000 is a function of inadequate new home construction. The cost of housing has a real impact on quality of life; the U.S. Census Bureau has concluded that California has the highest poverty rate in the country when you factor in housing costs.
To combat this, Governor Newsom set a goal of building 500,000 new homes every year between 2019 and 2025. Unfortunately, over the last 5 years, California has averaged about 110,000 new homes per year. As we’ve noticed a number of times, the price of a home is very much influenced by lack of supply; for many Californians, the idea of owning a home is a dream that may never come true.
Many critics of the bill have noted that it does nothing to address whether the homes built are affordable, while the other side argues that an increase in available homes will have the net effect of making housing affordable.
At the Chernov Team we understand that knowledge is power, and knowledge of new laws and how they impact the construction industry is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.