Panel
Addressing the Urban Housing Crisis
Milken InstituteGail Goldberg, Laura Archuleta, Christopher Hawthorne, Hessam Nadji, William Witte, Shawn Robinson, Dick Zyman, Josh Stevens
- Global inadequate housing is projected to affect 440 million urban households (1.6 billion people) by 2025, necessitating $9 to $11 trillion in new investment to close the gap.
- The United States faces a shortage exceeding 8.3 million housing units, with California specifically underbuilt by approximately one million units over the last 30 years while building only 80,000 homes annually against a need for 180,000.
- Regulatory approval timelines remain a significant barrier, ranging from eight months in Seattle to nearly three years for major projects in San Francisco, alongside potential moratoriums on large developments like Measure S.
- Affordable housing financing is characterized by reduced funding sources over the past five to seven years, with funding mechanisms changing annually and uncertainty regarding the impact of potential corporate tax rate reductions on tax credit incentives.
- Construction costs are elevated by prevailing wage requirements, adding 15% to 30% to costs compared to non-prevailing wage construction, with costs increasing significantly inland due to regional union activity differences; in San Francisco, a five-story wood-frame project costs over $500,000 excluding land.
- Economic conditions vary regionally, with Silicon Valley employment growth halving in the last 12 months compared to the prior four or five years, while Los Angeles added 450,000 jobs in the last five years and Detroit sees an influx of homebuyers purchasing properties for $500 to $5,000.
- Specific market metrics indicate Class A apartment rents have risen $450 per unit nationally over five years, while Seattle maintains a neighborhood-oriented approval process distinct from institution-heavy models, and modular housing facilities in the East Bay are expected to operate for four to five years.
- Political and community dynamics include three or four counties recently passing affordable housing bonds with over 67% voter approval, though specific interest groups like the Sierra Club have historically not supported affordable infill projects based solely on affordability, and 100,000 individuals remain on affordable housing waiting lists beyond those currently in Jamboree properties.