- California is home to some of the most expensive housing markets in the country.
- In the city of Santa Cruz, for example, affordable housing is so scarce some University of California students sleep in cars or classrooms.
Darrell Owens attends the University of California, Santa Cruz. The 25-year-old computer science student is learning to become a software engineer, but he says he’s had a much harder time navigating the city’s local housing market.
“A lot of people who are searching for housing in Santa Cruz, namely University of California students, are basically squared,” Owens, who is also a policy analyst and activist with housing advocacy group California YIMBY, told Insider. “They are sleeping in their cars, parking lots or classrooms because there’s just no housing available. This is very common.“
California has long been known for its high cost of living and homelessness rates. Several new laws in the state’s legislature could be the start of a solution. The most notable aims to alleviate California’s housing crisis by permitting home construction on non-residential lots previously zoned for retail, offices, and parking.
“This is a moment on a journey to reconcile the original sin of the state of California, and that’s the issue of housing and affordability,” Governor Gavin Newsom said in a news conference prior to signing the bills into law in late September. “We need to all be a little bit more accountable to this crisis of affordability.”
The US home buying frenzy that engulfed the nation has inflamed California’s real estate market. Intense buyer competition, limited supply and soaring inflation have led to large price gains throughout the state, resulting in housing affordability plummeting to a 15-year low. Although price growth is now moderating, the median home price in California is still a staggering $808,890 — making it one of the most expensive markets in the country.
In Santa Cruz, a city located at the north end of Monterey Bay, housing has become so expensive that many residents are struggling to afford the area, especially students attending its local universities. National statistics site DataShare found that as of 2020 — the most recent year the organization has stats — 55% of residents living in Santa Cruz were spending 30% or more of their household income on rent, widely considered by experts to be the cutoff for housing being affordable. That percentage has most likely increased during the nation’s pandemic homebuying bonanza.
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A spokesperson with UCSC told Insider that the university is aware of the situation and is attempting to correct the problem.
“We are working to build more on-campus housing so students have more opportunities to live on campus while they pursue their higher education,” the spokesperson said.
But with several lawsuits preventing the construction of new homes, it is a task easier said than done.
California makes major steps to find more land for housing
Two of California’s most notable housing bills, named SB 6 and AB 2011, were signed into law in September and have been hailed as a good step in addressing the state’s housing crisis. Introduced by assembly member Buffy Wicks, a Democrat from Oakland, and Senator Anna Caballero, a Democrat from Merced, the laws could help create millions of new homes for Californian homebuyers by allowing home construction on non-residential lots previously zoned for commerical use.
While critics of the bills fear the law will hurt local governments by diminishing commercial property tax income, supporters hope the additional inventory will help more residents afford California’s pricey real estate market. AB 2011, specifically, allows the development of housing on commercially-zoned lands, permitting the construction of mixed-income housing as long as the projects meet “specified affordability, labor, and environmental criteria,” according to housing advocacy group California YIMBY.
Owens hopes it will also ease the woes of UCSC students who can’t find affordable housing on campus.
“UCSC has the worst housing situation in the entire UC system,” he said “They had to cut back enrollment for the first time this year as some dorms are overbooked.”
UCSC’s spokesperson said the university provides housing for about half of its undergraduates, making it “one of the highest percentages in the UC system.” They also confirmed that UCSC did have to reduce its fall enrollment this year.
According to the university, UCSC currently has just under 10,000 total spots available in campus housing for undergraduate, graduate and family housing. But with a student population of more than 18,000 attendees, there are not nearly enough beds.
“We recognize that we need to do more,” the spokesperson said. “Our long-term strategy is building more housing on our campus.”
In the short term, “whenever we hear reports of students without a stable place to live, we reach out and connect them with Slug Support,” the spokesperson said, referring to a program created “to promote early intervention” for students on the verge of crisis. The university also provides students with “renter workshops” to help them learn their rights and responsibilities as tenants, as well as a database of rental rooms and units in the city.
However, not every student is able to find housing. Insider reached out to UCSC police to discover how the university tackles homelessness students but did not immediately receive a response.
As Santa Cruz’s affordability crisis worsens and the median home price now sits at an astounding $1.5 million, anyone earning the local median income of $89,986 or less faces homelessness or stiff competition in securing a place to rest their heads.
It’s a lesson that Owens learned this summer after vowing to move off campus — a decision that landed him in a fierce bidding war for a “bungalow” that cost $1,700 per bedroom to rent and was 45 minutes away from campus.
“A lot of the people who are bidding in Santa Cruz, don’t have the income to match what landlords are asking,” Owens said. “They are going to pull from family members. They are going to pick up second and third jobs. Everyone’s so desperate to find housing.”
Freeing up more land for housing
Based on factors like how fast homes sell, the amount of offers homes receive and how many buyers pay above listing price, Santa Cruz earned a competitive ranking score of 69 out of 100, making it one of the most cutthroat markets in the United States, according to data from real estate brokerage Redfin.
Governor Newsom’s housing initiative may help to change this narrative.
“Using underutilized land to create new, affordable housing units will help address California’s housing crisis, while protecting natural lands,” Tim Grayson, the former mayor of Concord, California, said in a tweet.
For students like Owens, who was only able to secure housing “miraculously at the 11th hour,” California’s new bills are a glimmer of hope — an assurance that affordability may return to the state.
But even if that is the case, it will take some time before students at UCSC see real and impactful changes.
As the university continues to battle lawsuits and the new legislation is likley to receive pushback from NIMBY locals, it may take years before Owens and his peers see a difference. By then, he and his graduating class may have already moved on to the next endeavour.