MarinIJ: Dick Spotswood: California has an Affordability Crisis, Not a Housing Crisis

It’s said that Marin, the San Francisco Bay Area and much of California is facing a “housing crisis.” The bipartisan reaction of politicians is summarized by Gavin Newsom’s boast in 2017. When campaigning for governor he vowed, “I will lead the effort to develop the 3.5 million new housing units we need by 2025 because our solutions must be as bold as the problem is big.”

The CalMatters news organization reports, “Just 13% of the 3.5 million homes (Newsom) campaigned on building have been permitted, let alone built, and housing in California is more expensive than ever.”

The CalMatters news organization reports, “Just 13% of the 3.5 million homes (Newsom) campaigned on building have been permitted, let alone built, and housing in California is more expensive than ever.”

California doesn’t have a housing crisis; it has an affordability crisis. The public’s complaint is that housing is unaffordable for essential workers, those in the economic middle, and young folks looking for a starter home.

Tamalpais Valley resident Gaetan Lion is a researcher who posts on Medium.com. “There’s a lot more to home prices and housing affordability than housing supply,” he wrote. “When you compare the top California cities’ home prices with other American cities that are not in the same league, California prices appear absurdly high. But, when you compare California cities with other world class cities, their respective home prices seem mundane.”

Flooding coastal California with market-rate housing does little to address the very real affordability crisis. The Golden State has plenty of supply if one can afford the price. The basic economic rule is if the price of bicycles skyrockets, then supply hordes of bikes and prices will drop.

The housing market is an exception. In world class metro areas like London, Hong Kong, New York, Honolulu, Silicon Valley, Singapore and San Francisco, demand will always exceed supply. It’s about “location, location, location.”

Pursuing the build-baby-build mantra of Newsom and San Francisco state Sen. Scott Wiener won’t do much for the affordability crisis if new homes are mostly priced $1 million and above.

We often misuse the term “affordable homes.” With California’s residential vacancy rate a low 1.1%, its homes are affordable to someone. In spring 2026, Imagine Marin/Compass Realty indicated “single-family median sale prices ranged from about $1.37M in Novato to $3.81M in Kentfield.” Families with sizable incomes can pay those prices.

Why are North Bay homes so expensive while similar sized residences are affordable in, say the Nevada desert town of Winnemucca?

A substantial segment of San Francisco’s well-educated workforce earns mid-six-figure salaries. Post pandemic, the Bay Area is booming as it’s the global center of the artificial-intelligence industry.

These high-net-worth people are demanding. Their goal is to live in physically attractive towns or neighborhoods with good schools, temperate weather and close to top-flight culture and universities.

Winnemucca is a nice town with friendly folks and many Basque restaurants. Zillow reports its average home value is $361,536. Jobs are in low-wage agricultural, mining and gaming sectors. Summer temperatures can exceed 100 degrees. It’s a long drive to the bright lights of Reno and Salt Lake City.

If the law of supply and demand can’t provide homes in world-class metro areas for service industry workers and young families, what can?

Encourage new construction that costs less to build – multi-unit buildings with many smaller apartments that are ideal for singles, couples without kids and seniors. Americans became accustomed to huge homes. In 1970, the average size of a residence was 1,500 square feet. Today it’s 2,400 square feet.

Streamline the interminable planning process. Zone vacant or underused land for manufactured modular housing including mobile home communities. They’re ideal for those otherwise priced out of the housing market. There are suitable Marin sites.

If state and local governments purchase the land and make long-term written commitments to maintain that property exclusively for modular and mobile homes, true affordability will be guaranteed.

Lastly, for homes to be priced as affordable for essential workers and young families they need to be subsidized by a regional housing bond.

Columnist Dick Spotswood of Mill Valley writes on local issues Sundays and Wednesdays. Email him at spotswood@comcast.net.