Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
Page 11
Page 12
Page 13
Page 14
Page 15
Page 16
Page 17
Page 18
Page 19
Page 20
Page 21
Page 22
Page 23
Page 24
Page 25
Page 26
Page 27
Page 28
Page 29
Page 30
Page 31
Page 32
I By GEORGE ECONOMIDES Long Beach Business Journal T he Olson Company has built nearly 10000 homes in more than 100 cities across California over the past 28 years. As an urban pioneer he has a unique perspective on affordable housing issues in the state. We asked Steve to respond to some of our questions about this important issue. QWhy is providing an affordable home such a challenge in California today Is this a crisis or just a normal historical pattern in California A Californias home prices have recovered from the precipitous drop six years ago with the median home price currently for L.A. County at 496000 and for Orange County at 617000 according to Zillow. Southern California home prices have been rising because of lack of inventory and continued growth in household formations. This trend has also impacted renters who can pay well over 50 of their income to afford an apartment in the metropolitan core. Housing starts in the state hover around 100000 units which are 48 lower than peak levels a decade ago with more people living in the state today. Only the State of Hawaii has more expensive housing. Approximately 24 of the homes in Los Angeles and Orange counties are considered affordable for entry level housing compared to national levels of 70. A middle income fam- ily living in Long Beach in 1960 having an inflation adjusted real household income of 52711 adjusted to todays dollars paid 112603 for a 3-bedroom home or 2.16 times household income. Applying todays average household income of 52099 towards the purchase of a comparable house they would have to pay 426220 or 8.2 times household income. In reality a first time buyer securing an FHA loan for such a property requires a minimum household income of 73000 which leaves families with limited choices in the Southern California basin. Many end up either staying renters or moving to the Antelope Valley BeaumontBanning or other more remote locations. The affordability index in Southern California stands at 27.4. QWhat are the issues which inhibit providing affordable housing today A Subsidized state bond measures for affordable housing are inadequate to make even a small contribution towards Californias housing needs. Redevelopment agencies which shouldered the development of many subsidized affordable housing projects in metropolitan areas were closed down in 2012. As a result the least costly housing markets in the state like Bakersfield Fresno and RiversideSan Bernardino are still above national average home prices including apartment rents. There are many complex issues to consider when examining the affordable housing dilemma. The chart at the top of the next page shows how Californias home prices have outpaced the rest of the countrys home prices for over 70 years. Between 1980 and 2014 construction of new homes and apartments has remained low compared to both national and historical standards. During this 34-year period the number of housing units in the typical U.S. metropolitan The Olson Companys Steve Olson Discusses Affordable Housing Challenges In California 6 Steve Olson founded The Olson Company more than 28 years ago. Southern California is home to over 1000 small urban villages each with unique and compelling lifestyles. It is the Companys mission to seek out these locations and provide differentiated neighborhood housing giving homebuyers multiple living choices in the metropolitan core Steve Olson Founder and Chairman The Olson Company 2015_OlsonCompanyInTownLiving_PortAnniversary 8815 117 PM Page 6