Look, I want to walk you through something important that CalMatters Housing just reported on, because it gets to the heart of why housing solutions in California are so complicated.
The starting point here is pretty straightforward. California has millions of people living in poverty or close to it, and one of the main reasons is that housing costs are just astronomical compared to what folks earn. According to the reporting, the federal government pegged California's median rent at nearly three thousand dollars a month, the highest in the country. When you're trying to serve low-income families, that's a brutal math problem.
The state has been pushing local governments hard to make it easier to build apartments for low-income renters. The thing is, even when cities remove zoning barriers and simplify the approval process, construction costs themselves are the real killer. CalMatters cited a recent study showing that building apartments in California runs nearly three times what it costs in Texas, and low-income housing here can run four times the Texas price or more. In some of our Bay Area and California cities, you're looking at units that cost a million dollars or beyond to build.
So many cities came up with what's called inclusionary zoning. Rather than funding affordable housing directly themselves, they require developers building market rate apartments to set aside some units for low-income tenants at reduced rents. It sounds sensible in theory, but a UC Irvine economist just completed a comprehensive study that tells a troubling story. According to CalMatters reporting on this research, inclusionary zoning actually cuts new housing construction by roughly a third. The economist estimates that generating one affordable unit this way costs around eight hundred thousand dollars in excess rents that market rate tenants end up paying, which is actually higher than directly funding affordable housing would be.
What I am seeing locally is that we need to think differently about how we're approaching this problem. Inclusionary zoning was supposed to be a way for cities to avoid having to directly invest in affordable housing, but if the net result is fewer total apartments getting built while still being expensive to produce, then we're just moving the problem around instead of solving it. The Bay Area and East Bay have benefited from new construction in recent years, but policies like this could slow that momentum and ultimately hurt both the low-income families we're trying to serve and middle-income renters who end up carrying the cost.
