The Housing Crisis in California and the Issue of Excessive Commuting

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People in California have an unhealthy obsession with becoming the best at everything, from college sports to wine. But this greatness comes at a cost; the state also holds the unenviable distinction of being number one in the nation for having the longest commutes, housing crisis, and the least affordable homes.
Property Records of California suggests that when combined, these two characteristics produce a group of “super commuters,” or workers who often travel extensive distances or spend a significant amount of time getting to their place of employment.

Champions of the One-way Commuter System

Even if the national average commute time to workplaces has increased in the majority of years between 2006 and 2019, workers in the Golden State are not going to be surpassed. According to a survey that was released by the Census Bureau in 2019, it was found that the average one-way commute times in California’s main metropolitan regions tend to be longer than the record-breaking national average travel time of 27 minutes.
The following is a typical commute for workers in California, one way:

  • 35 minutes in San Francisco;
  • 34 minutes when traveling through Riverside;
  • 32 minutes in Los Angeles;
  • About a quarter of an hour in San Jose;
  • 28 minutes in the state capital of Sacramento; and
  • 27 minutes in San Diego.

According to a study conducted by UCLA in 2022, the shortage of housing options that are priced affordably and are located near job hubs forces people with lower and medium wages to reside a greater distance from their places of employment, which results in lengthier commutes. This is a concerning trend in light of research that suggests long commutes have substantial adverse impacts on one’s health. According to research published in the American Journal of Preventive Medicine, even a short commute of just 10 miles one way is connected with an increased risk of developing cardiovascular disease.

High Housing Expenses and Housing Crisis

Workers’ ability to move up the economic ladder is also hindered when they leave cities, which frequently happens because of unreasonably high housing expenses. According to research conducted by the Department of Housing and Urban Development (HUD), low-income workers who reside in close proximity to their places of employment have a greater chance of experiencing upward mobility for themselves and their children than low-income super commuters do.

The effects of having a long commute are especially problematic for those who work in the real estate industry because their jobs require them to spend a large amount of time behind the wheel. The research conducted at UCLA highlights the need to protect and grow the housing crisis supply in job-rich areas, particularly property that is rented out on a long-term basis, in order to mitigate the negative effects that are linked with longer commutes.

The Advantages and Disadvantages of Commuting

The research conducted at UCLA classified workers into three distinct income brackets: lower-wage, middle-wage, and higher-wage. The researchers next examined the suitability of the accommodation and compared it to the income of local workers in order to establish whether or not it was affordable.
According to the conventional notion, people who work for greater wages commute further distances from the suburbs to workplaces in and around major metropolitan regions. On the other hand, people who work for lower wages generally reside in close proximity to job hubs, which enables them to have shorter commute times.

The story that workers who make greater wages go more to and from work were supported by the study. Workers making lower wages had a commute that was on average about 11 miles long, while workers making higher wages had a trip that was over 14 miles long, which is 32 percent longer. However, the report also casts doubt on this picture by highlighting the limited housing options that are available to people with lower wages which creates a serious housing crisis.

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Higher-wage workers often have a longer commute, but this is a decision that is made possible for them because of the higher salaries they earn as well as the relatively cheaper cost of housing and other neighborhood advantages. These benefits include highly ranked school systems and more open space. These advantages are frequently viewed as a cost that must be paid in exchange for lengthier journeys.

Affordable Housing Units Vs. Housing Crisis

However, it is unlikely that the supply of cheap housing options that are located close to job centers will fulfill the demand from workers, particularly the demand from workers earning lower wages. Only 4% of workers earning lower wages (less than $1,250 per month) worked in neighborhoods with affordable housing units that were located near employment paying lower wages. These communities were also located nearby.

In the meantime, 77 percent of workers making higher wages (more than $3,333 per month) worked in communities that had housing that was priced appropriately in relation to the jobs available there.
To put it another way, it is challenging for workers earning lower wages to afford to reside in the same neighborhoods in which they find employment. They are instead forced to endure lengthy commutes, which do not come with the benefits that are customarily associated with people who drive to work.
Around 95 percent of rental units will be out of reach for a low-income earner unless they want to be cost-burdened by renting. Low-income earners may have their pick of as little as one housing unit near their workplace.

Attempts to Address the Housing Shortage

The lack of affordable housing alternatives for low-income employees in metropolitan areas is reaching a critical point, which is compelling legislators in California to scale up their response to the housing issue. The leadership of the state is at a crossroads: either they will need to increase a housing crisis, or they will continue to see inhabitants and jobs leave the state.

Both employees and employers are departing from some of the most costly coastal locations in California in favor of other states, which offer a lower cost of living overall and less expensive housing options. Between the years 2020 and 2021, there was a net loss of population in California 300,000.
Long-term solutions are going to be required in order to address the inventory shortfall in California. In order to accomplish this goal, some solutions that make sense include the following:

  • The construction and upkeep of housing units specifically designated for those with low incomes;
  • Relaxing outmoded limits on the use of land;
  • Encouraging the development of areas with a higher population density and infill;
  • Promoting the building of auxiliary dwelling units, often known as ADUs;
  • Providing financial incentives to towns that are transit-oriented; and
  • The physical construction of brand-new housing units, of course.

Long-term Rentals

In light of the current state of the property market, it is essential to note that long-term rentals will be in high demand. This is especially true in California’s pricey coastal communities, where renting continues to be a popular (and frequently required) choice. This is because housing is so expensive there.
As a result of the high demand for housing in California and the state’s skyrocketing home prices, real estate investors in the state are funding the construction of new build-to-rent homes in the form of long-term rental communities in suburban areas.

Cash-rich investors can ensure a consistent stream of revenue from priced-out first-time homebuyers who hope to wait out the seller’s market by adding build-to-rent to their portfolios. This strategy allows investors to secure a steady source of income from renters. As a growing number of people who choose to rent discover that they face competition from people who rent because they have no other choice, residential rental properties will come to dominate the housing market in California.