The median price of a home in Los Angeles will soon cross a starting threshold: $1 million. The median price of a home in California, meanwhile, is approaching $750,000, according to Zillow. That’s more than double the national median and more than triple the Ohio figure.

This is the definition of housing unaffordability.

Homeownership is becoming increasingly out of reach for more and more Californians. As of 2019 only 55

% per cent

of Californians, and only 36

% per cent

of Black Calfornians, owned a house. The American Dream is increasingly living up to its name by being nothing more than a dream in California.

This isn’t just about homeownership. Tenants are confronted with proportional price increases. For the first time

ever observed

, the average monthly rent in the United States has risen above $2,000 in the past year and nearly $3,000 in California. Many people cannot afford to buy or rent a house here.

The cost of housing is high for many reasons, including the cost of labor and materials and numerous environmental regulations and mandates, many of which are important. But the main reasons are supply constraints. As with any other good, you can charge more for it if you limit the supply of housing.

This is essentially some zoning and other restrictive ground

–

instructions for use. It is therefore no wonder that a wealth of empirical evidence has shown that restrictive zoning makes housing more expensive.

The Los Angeles area has been a prolific producer of such restraints. A study I led last year found that 78

% per cent

of residential land in the

G

Los Angeles region and 74% in the city of Los Angeles itself was designated exclusively for single-family homes, prohibiting apartment buildings and other multi-family dwellings.

–

family developments.

We also found that house prices correlated with the degree of strict and exclusionary zoning in each community in the region. Just like racial diversity and segregation.

The UC Berkeley Terner Center modeled six different housing policies for Los Angeles and found that the single intervention with the greatest impact on supply growth was easing density restrictions.

Yes, California has relaxed single-family zoning, the ultimate restriction on density, by allowing more ancillary housing, backyard cottages, in-laws, and the like and by

so called

plex reforms, allowing homeowners to subdivide and redevelop lots for duplexes and four-plexes. But these measures are too modest to reverse this poor cost curve.

What we need is a deeper density, more multi

–

family homes and missing mid-developments offering a variety of designs suitable for different incomes. We need premises to allow it, and we need the state to mandate it.

What is at stake is nothing less than the old idea that people born on the lower rungs of the income and wealth ladder can climb higher, limited only by their ambition and commitment. Since World War II, homeownership has been a prominent pillar of this widespread belief. new

–

agreement

–

era laws, financial institutions, and the GI Bill created the 30-year mortgage, and suburban developers sold home assets to tens of millions of (mostly white) Americans.

It worked. In 1940 only 44

% per cent

of Americans owned their own home. By 1950, that number had risen to 55

%, per cent,

and in each subsequent decade it rose steadily until the subprime mortgage crisis of 2007. In 2000 67

% per cent

of Americans owned their own home.

However, these figures hide huge differences. In 2020, white homeownership reached a post-war peak of 75

%, per cent,

while black homeownership lagged far behind at 44

%, per cent,

only slightly higher than in 1970, the year the Fair Housing Act came into effect.

Huge Huge

generational differences also persist. Older Americans are much more likely to own their homes; younger generations are struggling to keep up.

A major obstacle to closing these gaps is that the cost of homeownership has soared relative to incomes. According to data from the Federal Housing Finance Agency, home prices in the United States rose by an average of 4.6

% per cent

per year from 1975 through 2022, faster than economic growth and wages. California’s figure was an astonishing 6.7

% per cent

per year higher than in any other state.

While it’s true that house prices don’t match the stock market, the S&P 500 averaged nearly 12% a year over the same period, but this also underscores the problem. Housing and shelter are a human necessity;

stock shares

are not. And yet, in the United States and especially California, housing has become an investment vehicle that is available to far fewer of us.

For many Americans who are lucky enough to own a home, the biggest investment is a nest egg for retirement or an asset to borrow against to raise money for an emergency or college education for a child. Many homeowners therefore place a premium on maximizing not only the current value of their property, but also its future appreciation.

That’s why homeowners don’t just upgrade kitchens, cabinets, and bathrooms

,

but also fight against multi

–

family housing, affordable housing and homeless shelters in their neighborhoods and communities in an effort to protect their investments. These stay-at-home voters will fight to their limits to avoid easing destination restrictions.

Overcoming this impulse and reversing restrictive zoning will not in itself make housing affordable or revive the American Dream. However, if we don’t, the dream will become an impossibility for most of us.

Stephen Menendian is assistant director and research director of the Othering and Belonging Institute at UC Berkeley.