A new report by Demographic International has revealed that California is home to four of the world’s most expensive cities to buy a home, with San Jose, Los Angeles, San Francisco, and San Diego all ranking in the top 10 for unaffordability. The report highlights stringent zoning regulations, such as urban containment, as a major factor driving up home prices. According to the report, “the middle class is under siege, principally due to the escalation of land costs. As land has been rationed in an effort to curb urban sprawl, the excess of demand over supply has driven prices up.”
California’s environmental regulations have also been cited as a major obstacle to building new homes, with the state constructing fewer than 120,000 new homes in 2020, compared to over 260,000 in Texas. The exodus from California has been significant, with 433,000 people leaving the state between July 2020 and July 2023. A recent report from U.S. News and World Report ranked California last in the country due to its high cost of living, with housing being a primary driver of this trend. The typical home in California requires a household income of $224,000, or three times the median household income, to afford.
The report also highlights the state’s energy costs, which are among the highest in the country, except for Hawaii. The impact on the middle class is significant, with more than a third of America’s homeless population found in California, where homelessness has risen 53% since 2013.
