Elias: California housing policy based on state’s bad forecasting

Two things you can count on with ballyhooed state forecasts on issues such as California’s housing and population are that they’ll be incompetent and inconsistent. Usually, they’ll also be outdated even before they’re issued.

For years, this state has plagued its cities and counties with inaccurate, vastly varying predictions of housing need. In 2018, the state’s Department of Housing and Community Development (HCD) predicted California would need to build 3.5 million new housing units by 2025.

Four years of unpredicted population loss followed. The HCD never listed this as a reason, but by 2021, it was saying the need had dropped to 1.8 million living spaces. This year, despite more net out-migration from the Golden State, the projected housing need was back up again, this time to 2.5 million. The state offered no explanation for its inconsistency, apparently expecting no one to remember the previous estimates, none of which developers came anywhere near fulfilling.

Now it’s the turn of population forecasters in the state’s Finance Department. Ten years ago, they predicted tremendous California growth, apparently not noticing that most cities were already pretty well built out and that massive population growth would either have to land in huge new swaths of urban sprawl or require tearing down and rebuilding in existing neighborhoods to make them far denser.

There’s been no population growth, but policymakers in the Legislature have nevertheless chosen to pursue density, with nearly all of their new housing laws aiming to encourage more crowded living conditions and assuming that those in the new buildings will own few cars and use mass transit. Of course, mass transit ridership has not risen notably even as new construction arose near light rail stops. So much for that forecast.

The Finance Department in 2013 predicted California would have 52.7 million residents by 2060 but now figures the number will be 39.51 million, just about the same as today. But wait: This forecast turns out not worth the many sheets of paper on which it was printed.

For lo and behold, there’s now large-scale buyers’ remorse among California emigres in places like Dallas and Austin, Texas; Tucson and Glendale, Arizona; and several parts of Florida. Californians moved to those places in droves immediately before and during the COVID-19 pandemic.

Charmed at first by Austin, where many high-tech workers moved when the virus freed them from working in offices, they’re now finding it difficult to move easily from gig to gig as they could in places like Silicon Valley and Orange County’s Irvine area.

That’s because while there’s a fair amount of technology innovation in Austin, the California technology hubs remain dominant in their industry, providing far more options for switching jobs without risking long-term unemployment. Some emigres also complain about the central Texas weather, featuring many more 100-degree summer days and far colder winters than they experienced in California.

Also, once you sell a California home and turn your equity into a larger Texas manse, moving back can be difficult without a major drop in living standards. So emigres who left their previous options behind have less potential mobility.

One recent survey of Austin newcomers saw many yearning to return to California. It’s much the same in cities like Orlando, Florida, and Tucson, both of which attracted many Californians with lower-priced, more sumptuous housing than they could afford in coastal parts of California.

There’s suddenly a strong possibility that many of the recent California emigres will move back, even if that means enduring a somewhat lower living standard for a while. The reports indicating this likelihood came after release of the state Finance Department’s forecast, though, so it was probably outmoded before being printed.

California growth likely will rebound, but probably not soon to levels seen from 1950 to 2010. That’s partly because this state has become denser than before and thus less attractive to many folks who seek green surroundings.

All of this should reassure property owners who would love to get rid of the many vacancy signs on new apartment buildings coming online every week in California and demonstrates the error of assuming that today’s trends will continue indefinitely.

Email Thomas Elias at tdelias@aol.com, and read more of his columns online at californiafocus.net.