I have been talking about the housing backlog for a few years-- it's getting MUCH worse.
Companies are leaving California because their labor costs, to compensate for the high cost of housing, make it nearly impossible to operate as a profitable concern. California has the highest percentage of the homeless population in the nation; one in four of this country's homeless people live in California. While wealthy, older people are moving TO California, the next generation is leaving California at a record pace.
If you are rich and have gray hair, enjoy our little paradise but, if you are young and upwardly mobile, we don't have room for you. So, leave.
This is a problem. Fortunately, the rest of California is realizing what I have been screaming about for the last 4 years-- we need more housing. While everyone acknowledges that we have a housing shortage crisis, the politicians are acting like it's an opportunity to grant political favors. To wit: 13,000 new, Bay Area homes are not being built because the city wants the builder to use only union labor:
The negotiations between Lennar and the unions have been going on for more than a year and spilled into public discussion this week at the council’s Tuesday meeting, which drew hundreds of people to the small council chambers.
For more than six hours, the council heard testimony from the developer, the Contra Costa Building Trades Council and city staff, along with close to 100 people — residents, union workers, business leaders and housing advocates — who spoke during the matter’s public comment period.
While about half of the speakers at the meeting spoke in support of the unions — noting the need to maintain good wages and strong apprenticeship programs — others urged the council to do whatever it takes to keep the project moving. Local business owners and leaders see the site as a potential hub for technology companies and other job creators. Housing advocates want the project’s 3,000 affordable housing projects to come to fruition.
I have nothing against labor unions. Unions offer superior training which, in the long run, can save businesses money. But not every single job on a construction site needs union-trained labor and higher costs eventually means higher sales prices on the finished product. If the city approves housing, and puts a cap on the end-user sales price (which cities often do now), and forces the builder to overpay for labor, the builder won't earn a profit. Make no mistake about it, if there is no margin, there is no mission-- builders will just stop building in California.
This is no way to address a crisis. When 1 out of 4 of the country's homeless is living on the streets of California, and our kids and grandkids are moving to Texas, Nevada, Arizona, and Tennessee, it's time to change the way we do business in California.
"Business as usual" got us into this housing shortage crisis. Radically different approaches to increase supply will get us out of it.
