\n<\/p>\n
But choosing a \u201chealthy\u201d vacancy rate \u2014 one that reflects a functional housing market \u2014 and then backing out the number of additional homes needed to hit it, is more art than science. Most estimates turn to historical data to find some level when supply and demand weren\u2019t completely out of whack. Whether that halcyon period of relative affordability is 2015 or 2006 or 2000 or 1980 varies by researcher and, likely, by the region being considered.<\/p>\n
Beyond that, many researchers have tried to put a value on what is sometimes called \u201cpent up\u201d demand or \u201cmissing households.\u201d Those are all the people who would have gone off and gotten their own apartment or bought their own place, but, because of the unavailability of affordable places to live, have opted to keep living with housemates, with parents or, in more extreme cases, without shelter of any kind.<\/p>\n
Absent a survey of every living person, there\u2019s no way to precisely measure how many people fall into this camp.<\/p>\n
\u201cThis notion of \u2018pent up demand\u2019 is necessarily in an economist\u2019s judgment call,\u201d said Elena Patel, a fellow at the Brookings Institution who helped put together a nationwide shortage estimate last year (4.9 million<\/a>).<\/p>\n These variations in methods help explain some of the differences in the shortage estimates. Other differences pop up thanks to the vagaries of data.<\/p>\n The Moody\u2019s Analytics-led report, for example, calculated a national shortage of roughly 2 million units by adding together both the number of new units needed to raise the overall vacancy rate and the homes needed to backfill their measure of \u201cpent up\u201d demand. But for its California-specific estimate, the data wasn\u2019t available to do the latter, potentially leaving out a big chunk of the statewide shortage.<\/p>\n Then some estimates differ because the analysts are defining the shortage in a completely different way.<\/p>\n The California Housing Partnership looks at the difference between the number of households deemed by federal housing guidelines to have \u201cvery\u201d or \u201cextremely\u201d low incomes and the number of units that those households could conceivably rent with less than 30% of their incomes.<\/p>\n That gap of 1.3 million gets at a problem totally distinct from an overall shortage of homes.<\/p>\n Finally, there\u2019s the question of scale. Housing markets are, on the whole, local. A national shortage is going to add together San Francisco and Detroit, masking the extremes of both. A shortage estimate for a state as large and diverse as California may have the same problem.<\/p>\n \u201cIt is like looking for a weather forecast for a trip to the beach and being told that the average temperature nationwide is likely to be 67 degrees,\u201d the authors of the Moody\u2019s-led analysis<\/a> wrote.<\/p>\n What might be more valuable than fixating on any one shortage estimate, said Daniel McCue, a researcher at the Harvard Joint Center for Housing Studies, is to look at all the estimates together and appreciate that, by and large, they\u2019re all huge.<\/p>\n \u201cWhether it\u2019s one-and-a-half million or five-and-a-half million, these are big numbers,\u201d he said. That leads to an inescapable takeaway, he said. \u201cThere\u2019s so much to do. There\u2019s so far to go.\u201d<\/p>\n Patel, from Brookings, said trying to put a precise tally on what is ultimately the somewhat nebulous concept of a \u201chousing shortage\u201d is still a worthwhile exercise because it gives lawmakers and planners a benchmark against which to measure progress.<\/p>\n How much additional taxpayer money should a state throw at affordable housing development? How aggressive should a locality be in pursuing changes to local zoning? \u201cThe more concrete you can be in policy making land, the better,\u201d she said.<\/p>\n The state of California does in fact have its own set of concrete numbers.<\/p>\n Every eight years, the Department of Housing and Community Development issues planning goals to regions across the state \u2014 a number of additional homes, broken down by affordability level, that every municipality should plan for. These are, effectively, California government\u2019s official estimates of the state shortage.<\/p>\n To cobble together these numbers, state regulators look at projections of population growth to accommodate the need for future homes and then tack on adjustments to account for all the homes that weren\u2019t built in prior periods, but perhaps ought to have been. If a region has an excess number of households deemed overcrowded, it gets more units. If vacancy rates are below a predetermined level, it gets more units. If there is a bevy of people spending more than 30% of their incomes on rent, more (affordable) units.<\/p>\n It\u2019s a process that the state regulators have come to take somewhat more seriously<\/a> in recent years, engendering an ongoing political backlash from density-averse local governments and neighborhood activists.<\/p>\n In the state\u2019s last estimate, the topline total was 2.5 million units.<\/p>\n This coming cycle, which has already begun in the rural north and will slowly roll out across the state in the coming years, will produce yet another number. That will be one more estimate for state lawmakers of how much brake fluid the car needs.<\/p>\n This article was originally published on CalMatters<\/a> and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives<\/a> license.<\/em><\/p>\n<\/div>\nWhy estimate a shortage?<\/h2>\n