California's job market has boomed in the last two decades, and it will likely continue to do so into 2017; however, if all of those employees can't find somewhere to live, that growth will soon stagnate.
Two new reports released from UC Riverside and UCLA show that the state cannot grow as fast as it has previously if it cannot house the people working there. New housing permits in the first half of 2016 were 2% fewer than the first half of 2015, and multi-family permits were down 11% in the same period.
“The high cost of living in California discourages some migration to the state,” said Jerry Nickelsburg, an economist and the coauthor of the UCLA Anderson Forecast.
The median price for a home in Los Angeles is $615,000, compared with $1.19 million in San Francisco, according to Redfin, the real estate website.
The state will add jobs at a rate of 2% in 2016, but it will slow to 1.7% in 2017 and 1.1% in 2018, the report said.