By Riamy Beuscher, communications intern
A recent McKinsey Global Institute report, A tool kit to fix California’s housing gap: 3.5 million homes by 2025, specifically addresses the chronic housing shortage in California. The report’s objective is to present a practical blueprint to ensure access to affordable housing.
The MGI authors define affordability as the threshold of financial burden that an individual household will bear—about 30 to 40 percent of income.
The McKinsey report reveals that rural areas of California such as Watsonville, a small Santa Cruz County farming community, are increasingly becoming as unaffordable as urban cities like San Francisco. Alarmingly, 50 percent of households within the state cannot afford the cost of housing in their local market.
“That came as a big surprise because historically we have thought of the housing problem as being a focus in larger cities, but we found every city has this problem,” Jonathan Woetzel, director of the McKinsey Global Institute and a the study’s co-author told KPCC.
The report identifies housing hot spots—areas already zoned for development. A conservative estimate predicts there is physical capacity to build more than five million units; more than enough to close California’s housing gap.