McKinsey Global Institute, in an analysis of housing affordability challenges, quantifies one state's chasm of unmet need for access to housing options this way:

California, for instance, added 544,000 households but only 467,000 net housing units from 2009 to 2014. Its cumulative housing shortfall has expanded to two million units. With home prices and rents hitting all-time highs, nearly half of the state’s households struggle to afford housing in their local market.

The report goes on to characterize the material consequence of the gap between what's happening and the need for more to happen as a function of how much the state loses when people are overburdened in paying rents.

$40 Billion, with a B. That's 6% of California's GDP.

After laying out the scope of the housing affordability crisis--noting that the U.S. hasn't a monopoly on the challenge by any means--McKinsey's analysis says the fix is three things.

  • Find land
  • Remove local regulatory over-reach
  • Innovate development and construction

That, and $4 gets you home on the bus.

This is not said merely to be snide.

McKinsey's three imperatives serve as loci for changes to the dire prospect of more attainable housing options in many urban areas, but finding the levers to motivate people with a stake in these places is elusive.

Here's new data from the National Association of Home Builders economist Rose Quint on ownership affordability, the NAHB/Wells Fargo Housing Opportunity Index.

Nationwide, 58.3 percent of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $68,000. This is down from the 59.4 percent of homes sold that were affordable to median-income earners in the second quarter.

Underlining McKinsey's focus on California's especially gruesome challenges on improving people's access to attainable housing options, the NAHB report that longtime No. 1 most-unaffordable market in the nation--San Francisco--abdicated its position in this dubious ranking, to Los Angeles, which now ranks as America's least affordable. And, as Quint notes, that's not all the negative news about California.

Source: NAHB/Wells Fargo Housing Opportunity Index data
Source: NAHB/Wells Fargo Housing Opportunity Index data

There, just 9.1 percent of the homes sold during the third quarter were affordable to families earning the area’s median income of $64,300.

All five least affordable small housing markets were also in the Golden State. At the very bottom of the affordability chart was Salinas, where 11.3 percent of all new and existing homes sold were affordable to families earning the area’s median income of $63,100.

The way to begin to do something about that, as McKinsey points out is to 1) find land, 2) reduce local regulatory and time barriers, and 3) innovate construction to reduce waste and grow productivity.

Which of those three alternatives is it realistic to believe can be achieved, especially in places like California metros, where land is constrained?

The No. 1 opportunity area in the McKinsey recipe is innovation. This is why you should make it your business to sign up for Hive, where the focus is 100% on innovating to transform the affordability challenge from something everyone's talking about to something you can do something about. Sign up for Hive here.