Californians despair about high cost of living. This housing can help

When the Public Policy Institute of California released a new poll late last month, media coverage mainly focused on how the 11 candidates for governor were faring with voters.

However, the poll tested several other issues, one being Californians’ living costs. The poll found 70% of respondents believe their incomes are not keeping up with inflation, and San Francisco Bay Area residents have the greatest financial fears.

The PPIC poll findings comport with a new report from the federal Bureau of Economic Analysis.

The bureau says Californians’ living costs in 2024 were the highest of any state — almost 11% higher than the national average — with rental housing 53% over the national average and utilities 63% over.

Moreover, the bureau said the Bay Area is the most expensive region in the nation, and four other California regions make the top 10: Los Angeles, San Diego, Napa and Oxnard.

The PPIC poll and the Bureau of Economic Analysis report imply that living costs should be the leading item on the political agenda. They are the root cause for California’s other socio-economic issues, such as the state’s top ranking for poverty and homelessness and the outflow of Californians to other states, seeking affordable living.

The 11 applicants for the governorship often mention living costs in their pitches to voters, but rarely do they specify how they would lower them.

For instance, billionaire Tom Steyer is promising to build a million new units of housing during his governorship, reminiscent of Gavin Newsom’s pledge to build 3.5 million units when he was running for governor in 2018, “because our solutions must be as bold as the problem is big.”

Newsom has signed dozens of bills meant to spur housing development, but the actual rate of construction, about 100,000 units a year, has not come anywhere close to meeting the 2.5 million units the state housing agency now says are needed.

Making serious headway on housing would require some politically difficult policy changes. One would be to encourage assembling pieces of housing, or even complete units, in factories, thereby reducing the time and expense of on-site construction.

A new study by UC-Berkeley’s Terner Center for Housing Innovation declares that factory-built housing could reduce costs for apartments that “in California typically exceed $400,000 — $500,000 per unit and are even higher in the high-cost metro areas where housing needs are most acute.”

Assemblymember Buffy Wicks, an Oakland Democrat who chairs the Assembly Select Committee on Housing Construction Innovation, says she will push factory-built housing in legislation.

“California is a leader in innovation — it’s time to apply that mindset to solving our housing crisis,” Wicks says.

So why hasn’t factory-built housing been embraced in California? Simply, it’s because construction unions have used their political clout to block it at the state and local levels.

The irony is that in World War II, California construction tycoon Henry J. Kaiser invented assembly line construction of Liberty ships, without which the United States and its allies could not have assembled the stockpile of military supplies to free Europe from Nazi domination.

In the near future, California’s high living costs and Newsom’s unmet housing pledge could plague his presidential campaign.

CNN anchor Dana Bash cited the Bureau of Economic Analysis report in a recent interview of Newsom as he was touting his new autobiography, which dwells on his mother’s financial worries after his father abandoned the family.

“California has the highest cost of living in the US, 11% above the national average. Families are leaving because they can’t afford rent, a home, or to raise a family,” Bash said, adding, “People are still struggling to afford things, like your mom was.”

Newsom ignored the issue, launching his stock boast about California having the world’s fourth biggest economy and adding, “We dominate in every key industry: AI, quantum, robotics.”

It was evasive and lame.