Lack of Affordable Housing Will Dampen State’s Future Job Growth, Report Warns
California is expected to add more than 300,000 jobs this year and in 2020, but that number falls short of the stronger job growth the state experienced over the last half-decade, according to the 2019 Regional Forecast and Economic Outlook released by Los Angeles County Economic Development Corp.’s (LAEDC). The forecast, produced by LAEDC Institute for Applied Economics, attributed the slower job growth to a lack of affordable housing.
California will add 322,700 jobs this year and 318,500 next year. In comparison, the state added 424,200 jobs in 2014, 474,000 in 2015, and 427,100 the following year.
“In addition to its short-term social considerations, the paucity of affordable housing in California arguably serves as the strongest short- and long-term structural economic headwind in the state,” the report stated.
Housing unaffordability hampers household formation, limits mobility, and incentivizes talent to relocate out-of-state, according to the report. And over time, the bifurcation of income distribution will worsen inequality, and companies will relocate or select other states in the interest of their employees and labor costs. All of these factors will cause economic growth to decelerate, decline or disappear.”
“We would need 500,000 more homes to meet our population and economic growth—and that would have to include homes that are affordable for people who live here,” said Somjita Mitra, director of the LAEDC’s Institute for Applied Economics.