A new report shows California has four of the world’s most expensive cities to buy a home as the Golden State grapples with a soaring cost of living.
The annual Demographic International Housing Affordability report found that San Jose, Los Angeles, San Francisco, and San Diego have all made the top 10 as one of the most unaffordable cities for homebuyers. One other American city, Honolulu, made it on the list in sixth place.
The report cites stringent zoning regulations, such as urban containment, as a factor driving high home prices. “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,” the report says.
California’s stringent environmental regulations make it difficult to build new homes. California built fewer than 120,000 new homes in 2020. In comparison, Texas, where many Californians are flocking, built more than 260,000. Between July 2020 and July 2023, 433,000 people left California.
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A recent report from U.S. News and World Report showed California ranked last in the country due to its high cost of living. Housing is one of the primary actors driving up the cost of living, with the typical home requiring a household income of $224,000, or three times the median household income, to afford. The state’s energy is also more expensive than any state except Hawaii.
The blow to the middle class comes as California’s homeless population has skyrocketed. More than a third of America’s homeless population is found in the Golden State, where homelessness has risen 53% since 2013.
