Key points:
- California’s housing crisis is about affordability, not just unit counts.
- Middle- and low-income Californians face severe cost burdens for housing.
- California needs over 2.5 million new homes by 2031 to restore balance.
SACRAMENTO, Calif. — We hear arguments — there is not really a housing crisis because of claims that there are sufficient numbers of homes to accommodate current needs. Such arguments ignore issues such as location and affordability, but at the same time, they also acknowledge a real lack of units for low and middle income folks — what is that if not a housing crisis?
For instance, Gaetan “Guy” Lion’s recent report claims there is “no shortage of housing in general,” while acknowledging that “there’s a real lack of units for our middle- to lower-middle-class workforce.” Others, like McClure, have conceded that there is also “a real shortage for low income” households.
Add those groups together and you have a majority of Californians, spanning much of the state’s working and middle classes. The notion that such widespread affordability gaps do not amount to a housing crisis defies both data and lived experience.
The problem is not whether houses exist in California. The problem is whether people can afford to live in them.
Framing the conversation around an abstract “shortage” allows some to downplay the reality that the crisis is about affordability, not raw unit counts.
Housing advocates, urban planners, and economists have warned for years that the lack of affordable options for low- and middle-income households is driving displacement, exacerbating homelessness, and eroding the state’s economic foundation.
When one in six middle-class renters in California is spending more than half their income on housing — a level economists define as “severely cost-burdened” — the crisis is not hypothetical. In cities like Chico, that figure climbs to one in three.
California’s Legislative Analyst’s Office (LAO) estimates the state needs more than 2.5 million new homes by 2031 to restore balance to the housing market, including more than one million units affordable to lower-income households.
Those numbers reflect both market and subsidized production, but the scale of the affordability challenge means government intervention is unavoidable. Without deed-restricted housing, direct subsidies, and creative financing tools, market forces alone will not reach the households most in need.
The shortage is also driving demographic change.
Since 2000, California has lost about 7 percent of its middle-income earners, according to a KQED analysis of census data, with many citing housing costs as the primary reason for leaving. In places like Santa Cruz, the situation is extreme: a middle-income household must devote 78 percent of its income to housing, and at prevailing prices it would take roughly 21 years to save for a down payment on a median-priced home.
These are not just individual hardships but rather are systemic pressures that reshape communities, weaken local economies, and push essential workers farther from their jobs.
At the same time, Marin County and other affluent enclaves remain symbols of entrenched resistance to new housing.
Dan Walters, writing about Marin’s long tradition of exclusionary land-use policies, describes how the county’s “Can the Last Place Last?” ethos has survived for more than half a century. In Fairfax, a 243-unit apartment project on the site of a shuttered spa has triggered fierce opposition, despite the fact that 41 of those units would be set aside as affordable.
The backlash has been so intense that opponents are trying to recall the mayor and vice mayor for supporting the project.
Riley Hurd, the attorney representing the developer, put it bluntly: “This is a town just saying, ‘We don’t care what the law says, we’re gonna say no.’ They’re gonna get their housing element decertified, they’re gonna get sued and lose.”
Marin is not alone in resisting.
Across California, local governments have used zoning restrictions, discretionary review processes, and environmental litigation to delay or block projects that meet state standards. But the legal and political landscape is shifting.
Governor Gavin Newsom recently signed legislation overhauling the California Environmental Quality Act (CEQA) , which for decades has been used both to protect the environment and, in many cases, to stall housing development.
Newsom called the reform “the most consequential housing reform in recent state history.” The law streamlines approval for qualifying projects, especially in areas already served by infrastructure, and aims to prevent procedural abuse that can keep housing tied up in court for years.
Still, streamlining alone will not deliver affordability, at least not by itself.
Lion is correct that building more market-rate housing does not guarantee lower prices for those in the middle or at the bottom of the income scale.
International examples like Hong Kong and Vancouver show how global demand and speculative investment can push prices upward even in the face of robust construction. In Vancouver, zoning changes that encouraged taller, denser buildings increased land values dramatically, with much of the economic gain flowing to property owners rather than translating into lower prices per unit.
California’s challenge is to prevent that dynamic from dominating here.
That means coupling increased supply with strong affordability requirements. Proposals to waive property taxes for deed-restricted workforce housing deserve consideration, as do investments in social housing and mixed-income developments.
The state’s own data underscores that the vast majority of extremely low-income households are rent-burdened, with 78 percent paying more than half their income for housing.
At the same time, homeownership is slipping further out of reach: in early 2025, only 17 percent of Californians could afford a median-priced existing single-family home, the lowest rate ever recorded by the California Association of Realtors.
The argument that California’s stable overall population since 2018 diminishes the need for new housing ignores the internal churn — the forced moves, the long commutes, and the displacement of working families from job centers to distant suburbs or out of the state entirely.
It also ignores projected household formation trends, aging demographics, and the need to replace obsolete housing stock.
A 6.4 percent vacancy rate, often cited as proof of adequacy, does not distinguish between units that are habitable and affordable versus those that are luxury properties, second homes, or otherwise unavailable to local workers.
Dismissing the crisis also risks undermining public support for the investments necessary to address it. California’s 2025–26 budget has been criticized by housing advocates for an “alarming lack of funding” for affordable housing and homelessness prevention programs.
Without sustained public investment, the market will continue to fail households outside the upper-income tiers.
This is especially critical in light of the state’s role as home to nearly half of the nation’s unsheltered homeless population, a crisis driven more by rent levels than by personal circumstances like mental illness or substance use.
What the debate over “no crisis” misses is that the housing market’s failures are not confined to the poorest Californians. They reach well into the middle class — the very people who keep communities functioning. Teachers, nurses, police officers, grocery clerks, and countless others are finding that the places they serve are no longer places where they can afford to live.
That reality is corrosive to civic life, economic vitality, and social cohesion.
To accept that there is “no shortage” while acknowledging shortages for both middle- and low-income households is to admit the crisis exists but refuse to call it by its name.
The crisis is here. The semantics are a distraction. The path forward is clear: expand housing production where it makes sense, target subsidies and deed restrictions to keep homes affordable for the workforce, and confront the political resistance that treats exclusion as a virtue. Protecting the “status quo” is not a neutral choice — it is a decision to keep people out.
California’s future depends on rejecting that choice. The task now is to match policy ambition with the scale of the need, to ensure that our housing market serves the people who live and work here, and to stop pretending that affordability for the many can wait while comfort for the few is preserved.
Until that happens, the debate over whether there is a housing crisis is nothing more than a dangerous distraction from the urgent work at hand.
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Breaking News Housing Opinion State of California
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Affordable Housing California California Housing Crisis Gaetan “Guy” Lion Governor Gavin Newsom Housing Affordability Low-income households Marin County McClure middle class housing Middle-class households Riley Hurd Sacramento, California state housing policy Walters