Hey, guys, so there hasn't been a lot of good information
that's come out of California for this housing crisis.
This video is about has California just solve the housing crisis?
Before we get into it, there are two things
that recently happened.
one is they tried to recall Governor Newsom.
Now some of you may have followed this. Some of you may have not.
But of course, it didn't work.
And now Newsom refocuses on California's housing crisis.
It's a big deal.
The second thing is
is that California's smart plan to let homeowners be home builders.
This is what the video is about.
This is what we're going to talk about today
because I think this is a great idea and hopefully some of these
other municipalities pick up on this.
So California recently changed their zoning laws to allow
more than one housing unit on lots that have been reserved for one property.
And how much will that change things?
We're going to get into that in a moment, but first, if you're joining our content,
please be sure to like this video and subscribe to our channel.
OK, so California is pretty much ground zero for the current housing supply
crisis. The homeownership rate in California is one of the lowest
in the entire nation in the past decade.
Median home values have surged 165% in both Los Angeles
and San Francisco counties.
Currently, the median home cost is 830,000 in L.A.
and 1.8 million in San Francisco.
And this graph shows the median home
price has more than tripled in California since 1990.
Now that price explosion is fueled by migration to that state.
According to the U.S.
Census Bureau, California's population grew by 5.9%
between 2010 and 2019,
while the number of housing units only grew by 5%.
Single family only zoning laws have long made it illegal to build
anything but a single family home on a plot of land.
A recent study from UC Berkeley found that 83% of residents
in the Bay Area is devoted to single family zoning,
so it's only legal in 17% of the entire Bay Area
to build apartments, condos or even duplexes.
It's not that much better outside of California.
Across the country, about 75% of the residential land
in major US cities is devoted exclusively to single family homes.
This new law takes effect on January first.
The California Home Act will allow property owners
to split their single family lots into two parcels
and build up to four units on a property originally zone for only one home
, each lot could have two duplexes, a single home
with a backyard cottage or a combination of the two under the new law.
Cities and counties across California will be required to approve development
proposals and meet specified size and design standards.
A recent report by UC Berkeley's Turner Center for Housing Innovation
estimates that the legislation could lead to the construction
of 700,000 homes that wouldn't have been built previously.
That projection, of course, is a hypothetical of what we could see
over several years
if every single family homeowner who could build on their property chose to do so.
Governor Newsom's own projections estimate that new legislation
could lead to the construction of 84,000 affordable new homes.
That's only a fraction of the 3.5 million new housing units.
Governor Newsom wants to see built by 2025.
So keep your eye on California.
So here are the caveats of the new bill.
The law is designed to create additional housing while
also preserving low income, affordable units.
A proposed project under this new law cannot result in the demolition
or alteration of affordable or rent controlled housing or market
rate housing that has been occupied by a tenant in the last three years .
Homes in historical areas or wetlands, farmland and properties
at high risk of fire flooding are also exempt.
If someone chooses to split their property in two,
each new lot must be at least twelve hundred square feet.
So when it's all said and done, only 5.4% of the state's
current single family lots has the potential to be develop .
New units cannot be used for short
term rentals and must be rented for a term longer than 30 days.
Also, the new construction must be a residential property,
so this isn't a green light to build a new home office.
While this act does supersede some of the local legislation,
new builds would still have to adhere to local zoning rules,
such as those governing heights and yard size requirements.
No parking is required for these additional units
if the property is within a half mile of a major public transit stop.
So of course, legislators have been met with resistance from environmental groups
and tenants rights groups that say up zoning will increase displacement.
In fact, about 70% of California's polled oppose the new laws.
The opposition is an unexpected combination on both sides
of the political spectrum, including neighborhood councils
in the wealthy areas and the City Council in Los Angeles,
who worry that this will only help wealthy developers reconfigure neighborhoods.
And it does nothing to address
the homelessness issue, which is a major issue currently in L.A..
Homeowners and local officials have long supported zoning as a way to protect
property values and ensure neighborhoods don't become too densely populated.
But their opponents argue that limiting home supply leads
to a surge in prices and several related issues,
such as supercomputing and mass migration to smaller cities.
There isn't much of a model
for how this will fare, as the only similar law is in Oregon,
which passed the law in 2019, allowing for Plex's in most of the cities .
So when this goes into effect, a lot of people will be watching this
to see how this helps with the housing crisis and how this helps
with the homelessness issue and how this helps with the rising prices.
And as always, guys, thank you so much again
for your support on the channel and thank you for watching.