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California Dreamin’

Dennis Friedman  |  May 8, 2019

WHEN I WAS 10 years old, my Dad got a job offer in California. It was the early 1960s, we were living in Ohio and the local economy wasn’t doing very well. At the time, California was so desperate for factory workers that employers would run help wanted ads in local newspapers across the country.

My Dad, who was a machinist, answered one of the ads by simply placing a phone call to the employer. He was offered a job on the spot. The company paid all our moving expenses. Once we arrived in California, we stayed in a hotel, paid for by my Dad’s new employer, until we found a place to live.

It seemed like we had landed in paradise. I saw the ocean for the first time, there was an abundance of beautiful palm trees, no more bruising cold weather, and plenty of things to see and do. What’s not to like about California? It was a fresh start for our relatively young family.

A few years later, my parents owned a four-unit apartment building. My Dad was working six days a week and my mother was employed, too. We had come a long way from our small starter home in Ohio and the constant threat of layoffs.

We were joined in California by other family members: aunts, uncles and cousins. Many found new opportunities and a better quality of life. For instance, my uncle, who was a bartender in Ohio, was able to own his own bar in California.

California has the fifth largest economy in the world, just ahead of the U.K. The state has 12% of the U.S. population, but contributes 16% of the country’s jobs. It’s No. 1 in the nation in agricultural output.

Still, today, it’s a different story for the middle class in California. Many people are struggling because of the high cost of living. Housing is very expensive and it keeps rising. As Forbes noted, “It’s true that workers in California earn 11% more than their counterparts nationally. But that amount is not enough to make up for mortgage payments and rents that are 44% and 37% higher (respectively) than the national average.”

Indeed, according to Zillow, “The median price of homes currently listed in California is $525,000, while the median price of homes that sold is $491,100.” The rental market for homes and apartments is also expensive. The median rent for an apartment is $2,426 in California.

The bottom line: There’s not enough affordable housing for the 40 million people who live here. It’s one of the many reasons we have the highest homeless rate in the nation and the highest total homeless population.

Many people with well-paid jobs who want to own a home are forced to drive long distances to work. A whole segment of the population is classified as the “working homeless.” Some of them work two jobs, but still can’t afford a place to live.

Here are three reasons for the lack of affordable housing:

  • California hasn’t built enough housing to keep up with demand. The state housing department estimates we need to build at least 180,000 new housing units each year to keep up. Over the last 10 years, only half that amount were built.
  • Rules and regulations make it more difficult, time consuming and expensive to get new housing projects approved.
  • The high cost of land, labor and raw materials make it costly for developers to build.

Sadly, my relatives are no longer coming to California. Instead, they’re part of a reverse migration. They’re leaving for other parts of the country.

My niece is moving to Georgia and my nephew to Tennessee. They say the cost of living is cheaper, plus they can afford to buy a house. My cousin and her husband announced they’re leaving for Florida. They can sell their home here in California and buy a cheaper one in Florida, and still have plenty of money left over. My sister and brother-law are also planning to leave—for the same reason: “It’s too expensive here.”

One of the things my parents’ generation had in common was access to affordable housing. My aunts, uncles and cousins all owned their homes. They didn’t have to jeopardize their other long-term goals to buy a house.

The current generation no longer embraces California like my parents’ generation did. Not many of my relatives are left in California. But I’m not going anywhere. I have too much history here—and I can’t leave it behind.

Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor’s degree in history and an MBA. A self-described “humble investor,” he likes reading historical novels and about personal finance. His previous articles include Wrong ApproachBefore You Leave and Better to Be Rich? Follow Dennis on Twitter @DMFrie.

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