The state of California is known for its high cost in housing. We took a look at why and how the market can move forward to make home ownership more affordable in California. Here is what we found:

1. In the last 30 years, California has struggled to make housing affordable due to stagnate wages and high land costs. When the recession hit in the early 90s, this only accelerated the trend by increasing rent by 3% while the states’ income dropped by 6%.

2. As home prices rose, not only did it prevent lower income homeowners from moving up, it also kept out lower income workers from buying into the higher housing regions. This disturbs the region’s economy and affects the middle–income professionals like nurses and teachers. This puts jobs and incomes on the line and forces individuals to move elsewhere.

3. While the focus on making housing more affordable tends to lean toward reducing home prices, it may need to lean more towards increasing the local income. According to Kerry Vandell, an economics professor at UC Irvine, “In the middle, you’re in a position of instability.” There is just not enough growth for middle income individuals to afford homeownership.

4. When we talk about affordable housing, we are not just talking about the price tag for a new home. In fact, home prices have become much more affordable since the housing market bubble burst. But homeownership levels are down due to tight mortgage funding.

To improve the buying statistics, local incomes need to rise. This will be hard with a low volume of homes being built, which increases the demand and drives prices up even further, but it also slows down local economy with construction being down. New home construction offers the biggest employment opportunities and motivates the local economy. Overall, to increase the affordability of homeownership for the lower and middle class, people need to make the income to match the standard of living.