Can we build our way out of the housing crisis?

Source: San Diego Union-Tribune

The Union-Tribune examined if San Diego County can build more housing to slow the pace of rent and home price increases, concluding that zoning changes, a change in dwelling preference and reduced regulation are sorely needed if the current undersupply issue is to be properly addressed.

Making sense of the story:

• San Diego County is now rated as the 11th least affordable housing market worldwide, according to this year’s Demographia International Housing Affordability Survey.
•  Last year in San Diego County only about 10,000 housing units were approved, and most were for rent, not for-sale homes and condos.
• The price premium between San Diego and the national average has widened from 30.6 percent to 157.4 percent, census surveys show. Last year, the average value of a San Diego County house was listed at $527,600, compared with $477,500 statewide and $205,000 nationwide.
• On the rental side, vacancy rates stand at only 2 or 3 percent in most neighborhoods when at least 5 percent is considered optimal for a balanced market.
•  What actually gets built in San Diego is aimed at the upper end of the market in both rental and for-sale housing. That’s where the most profit margin lies, given the restrictions imposed by lenders after the real estate collapse a decade ago.
•  Since 2000, the county population has grown by 310,383 while the housing count is up by 161,468 units falling 40,500 homes short of what projected population growth would dictate. San Diego should be building 16,500 homes per year over the next decade to make up for the shortfall and cover continued growth
• Zoning changes, an emphasis on townhomes and reduced regulation would likely speed up construction, as would reducing opportunities for anti-development litigation. A streamlined permitting process and a change in parking requirements would also help resolve the situation.