This is the introduction to a new report published by the Chapman University Center for Demographics and Policy titled, “Fading Promise: Millennial Prospects in the Golden State.” Read the full report (pdf) here.
Along with the report, a new video from Chapman University and the California Association of Realtors talks about the housing crisis in California. Watch it here.
Throughout much of American history there was a common assumption that each generation would do better than the previous one. That assumption is now being undermined. The emerging millennial generation faces unprecedented economic challenges and, according to many predictions, diminished prospects.
These problems are magnified for California’s millennials. Their incomes are not higher than those in key competitive states, but the costs they must absorb, particularly for housing, are the highest in the country. Their prospects for homeownership are increasingly remote, given that the state’s housing prices have risen to 230 percent of the national average.
The long-term implications for California are profound. The lack of housing that can be afforded by middle-income households—particularly to buy—has driven substantial out-migration from the state. California has experienced a net loss in migrants for at least the last 15 years. This includes younger families—those in their late 30s and early 40s—which is the group most likely to leave the state. For every two home buyers who came to the state, five homeowners left, notes the research firm Core Logic.
Over the next decade, as the majority of millennials reach these ages, the long-term implications for employers and communities are profound. Rising house prices and rents are already impacting employers, including in Silicon Valley. High prices can also mean a rapidly aging population, something that is likely to sap the economic potential and innovation in our communities.
Many of California’s problems are self-inflicted, the result of misguided policies that have tended to inflate land prices and drive up the cost of all kinds of housing. Since housing is the largest household expenditure, this pushes up the cost of living.
California still has the landmass and the appeal to power opportunity for the next generation. It is up to us to reverse the course, and restore The California Dream for the next generation.
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