In recent months, some have pointed to declining home prices in certain California markets as a sign that the housing crisis is over—or at least easing. That narrative, however, is not just mistaken; it’s dangerously misleading.
California’s housing crisis is not about short-term price fluctuations. It is, at its core, a long-term and systemic imbalance between supply and demand—one that is rooted in decades of policy failures, exclusionary zoning, and political resistance to growth.
The crisis persists even if a median price drops temporarily in one city or another. The fact that a few data points may show softening prices does not mean families are finding homes they can afford, or that people are no longer being displaced, or that homelessness is declining. None of those things are true.
Misleading Signals: Why Price Drops Don’t Equal Affordability
Let’s start with the numbers. It’s true that in some communities, including college towns like Davis and larger markets like San Francisco, home prices have declined slightly in year-over-year comparisons. But these shifts are modest, and they often reflect volatility in a small sample size.
Median home prices can swing significantly from month to month depending on the composition of sales. If one month sees a handful of high-end properties move, and the next month includes more modest homes, the “median” price can appear to fall—even if overall affordability hasn’t improved at all.
What matters more than any temporary dip is the underlying reality: prices remain far out of reach for most residents.
According to the California Association of Realtors, the statewide median home price in April 2025 was $860,000—well above what a typical household can afford, even in dual-income families. Rental prices have also surged in recent years, with the average one-bedroom apartment in cities like Los Angeles or San Jose exceeding $2,500 per month.
More important than price is accessibility.
For many Californians, the crisis is not about whether a house costs $920,000 or $880,000—it’s about whether they can find a place to live at all, particularly near where they work, go to school, or raise their children.
The Real Crisis: A Chronic Undersupply of Housing
California has failed to build enough housing for decades. The Legislative Analyst’s Office has estimated the state would need to build 3.5 million more homes by 2025 to close the gap—a figure that’s become a rallying cry for pro-housing advocates. Despite ambitious goals, actual housing production remains far below what is needed.
This is a structural problem. It stems from zoning laws that restrict density, local veto power that allows small groups to kill needed projects, and a political culture that too often prioritizes “neighborhood character” over inclusion. Every project that gets delayed or rejected—whether in Davis, San Jose, or San Francisco—reinforces scarcity. And scarcity is what keeps prices high and forces people into overcrowded apartments, long commutes, or worse, onto the streets.
The housing crisis also isn’t felt evenly. While some affluent homeowners may welcome price stabilization, renters and lower-income families are bearing the brunt.
According to the Public Policy Institute of California, more than half of renter households in the state are rent-burdened, meaning they spend over 30% of their income on rent. For the poorest households, that figure often exceeds 50% or even 70%. These families aren’t seeing relief from slight market adjustments—they’re seeing an ever-present threat of eviction, displacement, or homelessness.
NIMBYism: The Crisis Within the Crisis
Local resistance to housing—often called “Not In My Backyard” (NIMBY) politics—remains one of the most powerful forces perpetuating the crisis. In cities across the state, well-organized neighborhood groups continue to oppose new housing developments, even when they are affordable, near transit, or supported by state law.
These groups rarely say they oppose housing outright. Instead, they raise concerns about traffic, parking, shadows, views, or noise. They demand endless environmental reviews and project revisions. They appeal approvals and delay decisions. The effect is the same: needed housing gets canceled, delayed, or made so costly that it’s no longer feasible.
In many cases, the opposition comes from homeowners who bought into neighborhoods decades ago and now benefit from sky-high property values while pulling up the ladder for the next generation. These are the voices that dominate local meetings, not the renters, young families, or essential workers who can’t afford to live in the cities they serve.
This is especially troubling given that California is now a majority-renter state, and renters are disproportionately young, lower-income, and people of color. The continued dominance of homeowner interests in local politics ensures that exclusion remains the status quo.
The Fallacy of “We’ve Built Enough”
Another common myth is the idea that California has already built “enough” housing and simply needs to manage growth better. But again, the data contradicts this.
According to HCD (California’s Department of Housing and Community Development), only a handful of jurisdictions are meeting their RHNA (Regional Housing Needs Allocation) goals, especially for low- and very-low-income housing.
Even cities that meet market-rate targets often fail to deliver deeply affordable units. Inclusionary zoning requirements help, but they can’t replace robust public funding and streamlined approval for subsidized housing. The idea that a recent dip in prices means California has achieved housing abundance is like arguing that a puddle after a rainstorm means the drought is over.
The Path Forward: Policy, Production, and Political Will
If we’re serious about solving the housing crisis, we need to look past the noise of short-term market shifts and recommit to systemic change.
That means enforcing state housing laws that limit discretionary denials and punish noncompliant jurisdictions. It means rezoning neighborhoods for higher density, particularly near transit. It means investing in affordable housing and shelter options at scale. And it means shifting our politics to center the needs of renters, workers, and those currently unhoused—not just the preferences of existing homeowners.
The housing crisis didn’t appear overnight, and it won’t be solved with a market dip or a few thousand new units. But dismissing the problem because a few cities saw home prices flatten is not just wrong—it’s part of the reason we’re still in this mess.
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Breaking News City of Davis Housing Land Use/Open Space Opinion State of California
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College Towns Dual-income families essential workers Homeowners Housing Crisis Neighborhood groups People of Color Renter households RHNA Young Families