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Monday, February 05, 2007

 

The Los Angeles Housing Crisis Worsens

A joint study conducted by the Los Angeles County Economic Development Corporation and the Greater LA/Ventura County Chaper of the Building Industry Association makes some important points about why housing prices are likely not to fall in Los Angeles and Ventura counties, and why that is tragic news for many middle- and low-income families.

As real estate writers continue to churn out the same will-the-sky-fall pieces about the housing market, the bigger story contines to go untold.

Housing prices in Southern California, and elsewhere in the US, have risen so quickly in the past few years that incomes have been unable to keep up. The result is a gap that leaves some middle-class families worse off than their low-income counterparts. There are no assistance programs targeting middle-class households, which are increasingly placed in the odd position of earning six-figure incomes, and yet not being able to qualify for 30-year-fixed loans on the median-priced home in the communities where they work.

This snippet of explanation about the LACEDC/BIA study is from a story at CBS2:
Los Angeles and Ventura counties have a serious shortage of housing, continuing a long trend of housing production failing to keep pace with demand, according to a study released Monday by an industry group and the Los Angeles Economic Development Corp.

"There is a serious misconception about supply versus demand in today's housing market," Holly Schroeder, chief executive officer of the Greater Los Angeles/Ventura County Chapter of the Building Industry Association said. "For more than a decade, we have consistently neglected to build enough homes and provide the infrastructure needed to accommodate the people that live and work in this region."

According to the study, titled "Meeting the Housing Challenge in L.A. and Ventura," the rapid population growth in the Southland means that only one new unit of housing was built for every 6.86 new people in Los Angeles County from 1990 to 2006.

That shortage means that the price of housing is unlikely to dip, keeping homes out of the reach of many residents.

"If we remain on this pace, the mismatch will worsen," Jack Kyser, chief economist for the LAEDC said. "This does not bode well for long-term housing affordability. The growing divergence between housing supply and demand in our region has very negative implications for our future economic viability."
— TJ Sullivan in LA
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