Part of the problem boils down to the (literal) nuts and bolts of housing development. The cost of building multifamily housing in California spiked by about 25% between 2010 and 2020, according to a report by the Terner Center for Housing Innovation at UC Berkeley. In the first few years of this decade, construction costs in the state’s major metros increased nine percent or more each year, according to a state cost index.

On average, each square foot cost $44 more to build in 2018 than it did a decade ago across the state. In the Bay Area, however, that cost jumped up by $81 a square foot, according to the Terner Center. And affordable housing was more expensive to build than market rate housing.

The reasons are many and complicated. Land costs, permitting delays, borrowing costs, local fees and the threat of litigation can all add up. Subsidized housing typically receive public funding and so have to abide by heightened hiring, wage, environmental and public amenity requirements. But two especially big ones are more expensive materials — which saw particularly price hikes during and immediately following the pandemic — and a relative shortage of labor. While the number of permitted units spiked by 230% between 2009 and 2023, the number of workers has grown by only 45%. Experts attribute the lack of construction labor to restrictive immigration laws, a tighter overall labor market, the inability of residential jobs to compete with higher paying commercial projects and a construction workforce that is still coming back online after it was gutted during the Great Recession.