As some experts predict that housing eventually is going to return to the record levels of “unaffordability” seen back in 2006, planners, developers and government officials have begun to debate about how to create enough housing to keep prices down.
“This brief respite is going to come to an end,” economist Chris Thornberg said Thursday at the O.C. Housing Summit.
Thornberg pointed out that unlike parts of Nevada and Arizona, California didn’t overbuild during the last housing boom. So when prices recover here — which they are already doing — supply will once again be constrained and prices will shoot up.
Here, the median sales price for a home in the first quarter was $410,000, according to the NAHB report, and the median family income was $87,000. That means 35% of the homes are within reach for the average household, the study says.
Consequences of the imbalance, which are often cited by housing advocates, include poor living conditions for many families, farther commutes from work centers and difficulty attracting top talent to the local workforce.
“Being unaffordable, there’s a snob factor to it, but it means our own residents are priced out of housing market,” said Annie Gerard of Apt Market Research, a Costa Mesa firm that consults for affordable-housing developers.
While most current homeowners laud the rising home prices and may need the equity to prevent foreclosure, the effect won’t benefit all.
“It’s a social issue,” Thornberg said.
So where will the balance come from?
Gerard anticipates that city planners will allow more development in places that were previously zoned for commercial uses.
“When the market returns, there will be more creativity about locations for housing,” she said. “I think there’s going to be a shift toward higher density.”
Some planners and transportation experts at the O.C. Housing Summit agreed, stressing the need for more dense development, especially near jobs and public transit lines.
But that prompted questions in the audience about traffic and dwindling open space, two issues that run counter to the essence of Orange County in the minds of many.
MIKE REICHER writes for OCLNN.com.