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Maxwell Drever : Tackling California’s Affordable Workforce Housing Challenge

affordable workforce housing

California is a state with a population of 39.5 million people. Where the state is considered among some of the most scenic and economically sound, it is facing a severe shortage of affordable housing units despite mounting demand. The COVID-19 pandemic has further burdened the segment which is failing to provide adequate and inexpensive units to the numerous people looking for them. Low-income renters in particular are at the biggest loss.

Rising homelessness and cost burdens have been two of the key concerns for residents of the state of California. As compared to Philadelphia, where 17% people are paying half of their income in rent, California has 78% extremely low income (ELH) renters doing the same.  For moderate income renters, this value is much lower at just 6%. However, the situation is still quite alarming and it requires immediate correction to strike a demand and supply balance for the future.

Let’s take a look at some of the data and insights analyzed by Maxwell Drever for the affordable workforce housing market in California.

Racial Disparities

Although it seems disconnected, the affordable housing crisis in California is fueling racial inequalities to a great extent. Black renters have a higher burden of costs as compared to white people. The cost burdens are nearly 50% higher for black families. This presents a problem not just for the families but the builders, government and other stakeholders as well. Furthermore, it sows the seed for racial tensions in other aspects as well.

Rising Rent

Since 2000, the average rent for California has gone up by almost 35%. This is an astronomical rise which is not backed by an equal increase in the salaries or income of individuals. According to Maxwell Drever, with these disparities, it is tough for people to provide accommodation for their families. Moreover, the COVID-19 pandemic has made life tougher to a great extent. With jobs lost and earnings slashed, people look for affordable housing which is again lapsing. 

State Minimum Wage Doesn’t Rise in Proportion with Rent

Where rents have risen by 35% in the state of California, household incomes have only gone up by 6% in comparison. In the last two decades, the requirement for renters to support their families has increased substantially. Today, an individual has to earn more than 3 times the state minimum wage in order to afford the asking rent in most neighborhoods. These statistics paint an alarming picture for the state as noted by Maxwell Drever.

Homeowners vs. Renters

The state of California requires more than 1.2 million affordable houses by the year 2030 if it is to avoid any problems with regards to demand and supply. Still, the state is spending nearly 5 times more supporting homeowners than renters which is further aggravating the situation.

Conclusion

The State of California requires immediate action if it is to avoid any severe crisis with respect to its affordable housing situation. All stakeholders must come together in this regard to tackle the problems at hand before things spiral out of control.