# data[].attributes.body
https://docs.google.com/document/d/1oKev2zlYKj4_T1Jxkff11uHAmcIMeFGvDaFYALpikt4/edit#

# data[].attributes.body
Research Write-up

California Economics is what keeps track of California’s money of how they recieve it, spend it, and save it. It is important to the United States because if one big industry stops making money, it can hurt California’s economy gravely. What can impact the economy positively is a big growth in the top three industries that is currently booming the economy which are entertainment, agriculture industries and  technology.

A cause of my problem would be that people still struggle with house crisis, mostly in the bay area. This is caused by high paying jobs around the area. Some people are being affected by this because they can’t get the jobs they want, houses are too expensive, or they just don’t work for it. There has been solutions with things like getting a better education, helping to get or better credit to make it easier to buy houses and having a good background for jobs.

# data[].attributes.body
Bibliography

Corcoran, Kieran. “California's Economy Is Now the 5th-Biggest in the World, and Has Overtaken the United Kingdom.” Business Insider, Business Insider, 5 May 2018, www.businessinsider.com/california-economy-ranks-5th-in-the-world-beating-the-uk-2018-5.

“California GDP.” Department of Numbers, www.deptofnumbers.com/gdp/california/.

History.com Staff. “California.” History.com, A&E Television Networks, 2009, www.history.com/topics/us-states/california.

Dougherty, Conor. “Boom and Gloom: An Economic Warning for California.” The New York Times, The New York Times, 13 Feb. 2018, www.nytimes.com/2018/02/13/business/economy/california-recession.html.

# data[].attributes.body
I predict that California's Economy will continue to grow as the years pass as long as they are smart with where they are putting the money, how they are spending it and how they are receiving it. I think job opportunities will continue to grow in the tech world and t=pay salaries will increasing. Hopefully the housing crisis will recover.

# data[].attributes.body
Since the Great Recession, California's Economy has boomed since 2007. The technology in California has made a great impact in the economy. The Salad Bowl, agriculture industries, also made a contribution to the economy and lastly the entertainment industries. California has been gaining money from these three contributors but there is one problem. The housing crisis. Economists believe that California could go into another financial problem if that isn't resolved in some way.

# data[].attributes.attachment_link.readable_text
by Mark Schniepp
June 2017

Summer 2017

We are now seeing record high selling prices for homes in many markets of California and the nation.

The sky high home values that seemed unbelievable back in 2007 have now been eclipsed in many of the larger markets of the state. The markets in the Bay Area now boast the highest values and record fast sell times.

Demand Conditions

Employment is strong throughout the state. In all coastal counties, the unemployment rate is now at the full employment level, meaning that job opportunities are relatively abundant and wages are rising.

The average rate for a 30-year fixed mortgage was 3.83% this week - significantly below the 5% to 6% range during the 2005 to 2007 "bubble" years.

In fear of facing higher interest rates because of overt statements by the Federal Reserve to push rates higher in a measured fashion, demand for mortgages has increased.

Because consumer confidence in March was at its highest level since 2000, people in general are feeling very confident about their employment prospects, their future income prospects, and the stability of the economy right now.

The financial market composite indices are at or near all time record highs. Households owning financial assets are feeling more wealthy today than during the previous 10 years.

Despite the fact that the Millennials aren't buying many homes today, demand is still strong for housing because of the strength of the economy. Furthermore, pent up demand, ultimately due to rising incomes of Millennials, will drive new housing formation higher over the next 5 years and this will lead to continued demand growth.

Supply Conditions

California's nonpartisan Legislative Analyst's Office estimates millions of additional homes would had to have been built between 1980 and 2010 to have stopped the state's home prices from growing far faster than the nation as a whole.

Though construction is on the rise, it still remains far below even the insufficient levels of the past few decades.

Some owners also can't sell because they purchased or refinanced during the bubble and still owe more than their houses are worth.

Others refinanced in recent years when fixed rates were closer to 3% and don't want to lose that rate.

But many owners don't want to sell because they will reset their property tax base on a new home. This could double, triple or even quadruple their annual tax obligation.

For-sale inventories of housing are at record low levels and the lack of available supply is materially constraining sales.

Furthermore, following the housing bust of 2007-2008, investors purchased homes en masse and turned them into rentals, taking thousands of homes off the market. Those homes largely remain as rentals today.

Credit Conditions

An expansion of credit is absent. People who have the income and/or the cash are actually purchasing the homes. Credit conditions today are nothing like they were in 2006. FICO scores count and so does documentable income. Furthermore, unless you obtain an usually higher mortgage rate loan through an FHA approved lender, you need a sufficient amount of cash as a down payment.

Conclusion

In the current market, rising prices are the result of demand and supply conditions, and not because of easy credit or speculative conditions.

Austere supply conditions, combined with solid demand for housing, are the root cause of current price inflation in housing. Consequently, we don't see any bubble forming in home prices. That said, if and when the economy softens, it is likely that housing prices will not decline that much.

The California Economic Forecast is an economic consulting firm that produces commentary and analysis on the U.S. and California economies. The firm specializes in economic forecasts and economic impact studies, and is available to make timely, compelling, informative and entertaining economic presentations to large or small groups.

# data[].attributes.attachment_link.title
Rising Home Prices: Is Another Bubble in the Making?

# data[].attributes.attachment_link.description
by Mark Schniepp June 2017 We are now seeing record high selling prices for homes in many markets of California and the nation. The sky high home values that seemed unbelievable back in 2007 have now been eclipsed in many of the larger markets of the state.

# data[].attributes.attachment_link.readable_text
by Mark Schniepp
May 2018

No Suprises

The employment report for April produced no surprises. Job gains remain relatively strong, the unemployment rate continues to tighten, and wage growth is ahead of inflation. It is curious that wages and salaries are not rising faster given the tightness of the labor market. This is disappointing for workers but it will keep the Fed on track for three rate hikes this year because inflation remains predictably in check. It's likely that stock market volatility will also subside, at least for the meantime.

Why the Probability of Recession is So Low

The probability of recession rose in March but still remains low. The odds of a recession this year should be low because recessions occur when imbalances develop in the economy, and no glaring potential macroeconomic imbalances are forming.

The labor markets continue to create more jobs, and the financial markets, while exhibiting more volatility since January, still remain buoyant. A fully employed economy, rising housing values, improved access to credit, and low household debt are driving both the consumer and business investment engines of economic growth.

Consumer confidence remains near its highest level in a generation. The present economic climate is rated consistently more favorably while economic expectations remain strong.

Consumer confidence at these stratospheric levels is consistent with a fully employed economy, households with rising real wealth and low debt, and low inflation.

Further tightening in the labor markets is likely this year, even as the pace of job growth continues to moderate. Employment growth has gradually declined toward 150,000 jobs a month in the U.S. and 20,000 jobs per month in California. This moderation is expected to continue through the rest of 2018.

A decrease in job growth is not abnormal at this stage of the business cycle and should not be mistaken for an economic slowdown. However, as long as job creation continues to exceed the flow of entrants to the labor market (80,000 to 100,000 a month), the unemployment rate is very likely to fall to 3.5 this year. Currently, the rate is at 3.9 percent.

Slower population growth and aging of the population will continue to exert downward pressure on labor force participation rates which will restrain labor force growth.

Growth in the economy in 2018 and 2019 will have to be accommodated with fewer additions to the workforce, due to slow growth in the labor force and a labor market that has very little slack. Consequently, look for much greater investment in automating business processes and functions. This has been the subject of my March and April newsletters.1

The environment in California is even more austere regarding labor market capacity. The unemployment rate has now reached a level that it has not achieved since the late 1960s. And predictably, wages have been rising more sharply here than in the rest of the nation over the last 18 months.

This year employee compensation is forecast to rise 4.0 percent compared to a 2 percent increase in 2017.2 Average salaries are forecast to rise 3.0 percent in California this year, after relatively hefty gains of more than 3.0 percent in the Bay Area economy during 2017.

The Updated Forecast

Even though the stock market has been under pressure since January (largely because of rising interest rates), the rest of the economy has remained more steady. This includes consumer spending, business investment, manufacturing, and surprisingly, inflation.

I believe that economists are much more focused on inflation than previously, because the labor markets should be producing faster wage growth now.

We are watching for any unexpected movements in inflation because that would pose one of the bigger risks to interest rates and the economy this year.

That said, nothing seriously out of the ordinary is within view. At our vantage point right now, it appears that the economic indicators for 2018 will remain auspicious.

The consensus forecast has real GDP still on track to expand at a pace of close to 3.0 percent this year with a slowdown strongly projected for 2019 and 2020.

-------

1 For all of the monthly newsletters of the California Economic Forecast for the 2018 calendar year, please go here: http://californiaforecast.com/monthly-newsletter/

2 UCLA Anderson Forecast for the State and Nation, March 2018, page Nation-15.

by Mark Schniepp
April 2018

In this part 2 of my monthly newsletter blog on robots, I'll mention how our fully employed economy is rapidly accelerating investment in and implementation of a robot workforce.

Are We Actually Experiencing an AI Explosion?

The world of artificial intelligence is advancing so rapidly and in so many industries, countries, and applications, that to many it feels like the automated evolution is rising exponentially. Here is tech writer Tim Urban's (waitbutwhy.com) illustration of just where we are on the timeline of human progress and the explosion that is allegedly right in front of us.

There is this notion that rapid growth in AI (or rather, explosive exponential growth) is here now or just in front of us. Tom Friedman's best selling book, Thank You for Being Late, also supports this premise.

However, I don't believe we are this far along the S-cure of progress, because implementation of robotic technologies is not evolving at light speed. AI trends such as virtual assistants, smart robots, and human voice adapting are still in their relative infancy and taking more time than initially thought to be really useful. While I think the future is soon, it's not that soon.

Consequently there is time to prepare your company and your workforce for the robot economy. And it's a good idea to start soon because there is no doubt that the robots are coming.

In last month's newsletter I mentioned a couple of AI applications fully operational now. Aside from Flippy at Caliburger in Pasadena, there are many examples just in the past 18 months of robots successfully performing repetitive or mundane tasks in a variety of industries.

Robots are quickly expanding in the food industry mostly in China and Japan, but also here in California. The robot restaurants in China have replaced greeters, waiters and some cooks. They are growing more popular, even if only as a curiosity for visitors to experience being served by robot waiters.

For a number of years robots have largely worked in industrial capacities, bolted to an assembly line. Industrial robots are automated, programmable and capable of welding, painting, product inspection and testing, all with precision, consistency and speed. A study by MIT economists found that robots were responsible for the loss of up to 670,000 manufacturing jobs between 1990 and 2007 in the U.S.

Amazon and Walmart employ hundreds of thousands of machines within their warehouses and fulfillment centers that do much of the heavy lifting of goods, and filling and organizing shelves with the help of directing human workers.

The warehouse robots have replaced some humans and the growth of Amazon has created thousands of new human labor positions, but the massive growth of e-commerce including the numbers of new warehouse hires do not mitigate the overall retail jobs losses that have been the consequence of this growth.

Sea Change in the Use of Robots?

Now, a new generation of robots is here, capable of moving among people and therefore finding a wider range of work in stores, hospitals, hotels, and offices. And this has become a major cause of concern because the McKinsey Global Institute reported that 30 percent of the global workforce could be displaced by robots by 2030.

While robots employed now are not displacing too many workers, they will in the future as they become more dexterous and smarter, and as human workers performing repetitive tasks become too expensive. Robots don't need to be paid the minimum wage (or any wage at all) and they don't need healthcare, family leave, sick leave, "a change in perspective," vacations, or worker's compensation insurance.

There would likely not be massive unemployment because millions of new jobs would ultimately be created. Robots need repairmen, software programmers, circuit board designers, ergonomic specialists, etc. Consequently, robots do pose a disruptive force that will push us to seriously reevaluate our occupational training and skill set more carefully than ever.

This is a good thing because when human jobs are eliminated much of this can take place mainly through attrition, particularly as the baby boomer industry continues to progress into retirement.

Wages are now rising more rapidly in the fully employed economy, and this trend is likely to reverse as automation increases. Consequently, it is more important than ever before in human history to own skills that are deemed necessary for a rapidly evolving techno-economy.

Furthermore, companies must adopt coming trends in AI that can create competitive advantage and generate value. This is what Amazon has successfully done, (and not without major criticism for being one of the early and successful pioneers).

At a minimum, you can at least own assets that will rise in value as a result of AI growth. To me, this means owning shares of companies like IRobot, Nvidia, Google, Bosch, Ekso Bionics, Northrop Grumman, Honda, Boston Dynamics or Waymo. There are many others so now is a good time to conduct your own research.

by Mark Schniepp
March 2018

We've been reporting for years that the labor markets in California and the nation are as healthy as they can possibly get, that anyone who wants a job can get one, and that technology has been the engine of growth during this expansion.

The state just revised the jobs numbers for 2016 and 2017 that affirm all of this, and then some.

The unemployment rate in California is the lowest since reliable records have been kept. My data for the state go back 50 years to 1968.

Technology employment, though slowing down, is still the engine of growth in California and remains the fastest growing sector of the Bay Area economy.

California created another 333,000 jobs in 2017, about 40,000 more than previously reported. My continued question about this is how can the state and its regions continue to produce more jobs when the unemployment rate says that the labor force is fully employed?

The only way to create new jobs is for the labor force to expand. Now the labor force is merely the population, 16 years or older, that wants to and is able to work. The labor force expands when seniors graduate from high school or college and enter the job market, and when graduates complete graduate school.

The labor force can also expand when people move to California from other states or countries, legally or illegally.

So 126,000 people that were previously unemployed found work last year and another 218,000 new people entered the labor force and were employed.

But this kind of scenario cannot continue much longer. At some point, the low unemployment rate will constrain employment growth and not just marginally like it has to date.

The Robots are Coming. No They're Actually Here Now.

The tightness of California's labor market is and will continue to manifest in onerous conditions for firms in recruiting new workers, higher wages and salaries, and more demands by workers for additional benefits, such as more paid time off, a better healthcare plan, or an office with a window.

Rare conditions like these accelerate the incentives by firms to pursue substitutions for human labor with more capital intensive investments. And with the new tax bill, there are additional incentives to explore labor saving automation. You see, there is full and immediate depreciation of capital spending, including investments in technology and equipment (like robots) that could soon or ultimately replace workers.

Consequently, with a fully employed and healthy economy in 2018, look for more news about the implementation of workplace robots, especially in the service industries.

Take Flippy for example, who just this month started working at CaliBurger in Pasadena. The robot combines thermal vision, 3D vision and computer vision. Flippy can cook 150 burgers an hour, flipping them at the right time and removing them from the grill perfectly cooked. CaliBurger says more "Flippies" will be flipping burgers at multiple locations this year.

In late January, the first Amazon Go opened in Seattle. The convenience food store allows shoppers to scan their phone upon entrance, grab whatever items they want off the store shelves, and automatically get charged after exiting the store without needing to stop at a register. In fact, there are no registers and the only employees in the store are those that prepare fresh food, check IDs for beer and wine, and stock the shelves with merchandise.

Not only does the new technology replace human cashiers, it eliminates the wait to check out which can often be as long or longer than the shopping time. Moreover, this new technology also renders shoplifting obsolete.

Another Amazon Go is apparently being planned for a location in the Grove in Los Angeles later this year, with another 5 stores to open elsewhere.

Since Amazon now owns Whole Foods, the "Go" technology might be headed that way in the not-to-distant future.

by Mark Schniepp
February 2018

GDP growth in the 4 th quarter was 2.6 percent, which is in line with expectations. This amount of economic growth is not too hot and not too cold, and at this point in the economic expansion, it's actually a decent number. Though most of the GDP reports during the current expansion are considered disappointing, the economy continues to hum along producing new highs in many key indicators along the way.

I wrote about this last year and conditions have only improved since. We are at fuller employment, a much higher stock market, higher consumer confidence, higher industrial production, and a faster than expected pace of consumer spending.

Why? Everyone has a job, business confidence and investment are strong, and the world economies are growing including the troubled ones like Spain, Greece, Ireland and Italy.

Last year I called it another Golden Age of the American Economy. These don't come around often so enjoy it while it lasts. But that begs the question: How long will these times last?

The financial markets sold off sharply on February 2, and again on February 5. What does this mean? Is this a timely omen? Are we now in the midst of an inevitable fall?

As an economic forecaster, I'm always on recession watch, but admittedly I've been able to nap a bit at my post because the economy shows no tell tale signs of weakness.

A 2,000 point contraction in the Dow Jones Industrial Average (or a 200 point decline in the S&P 500 index) is actually a healthy sign for this market. The indices have simply risen too far, too fast and for too long without a pull back. We have been expecting some sort of correction for quite some time. Profit taking is inevitable and arguably, the price-to-earnings ratio is on the higher side of history and needs some adjustment.

Fundamentally however, corporate profits are higher and should continue to rise this year because of the new tax policy and a growing world economy. I look for the financial markets to stabilize and resume their upward march this year, albeit with a little more volatility than we've seen the last two years.

The probability of recession is unbelievably low and business confidence around the world remains surprisingly strong. Just because the financial markets are going through a correction doesn't mean that economic momentum has changed.

The recent fire and flood disasters in California will only act as a further economic stimulus providing more opportunities for business expansion this year and next.

So don't let a few hundred points in the S&P get you down.... not just yet anyway. The economy remains fundamentally strong and economists are generally looking for a stronger growth year in 2018 than we experienced in 2017.

Your List for 2018

Learn the basics about the new tax reform act and take advantage of it. Speak to a seasoned accountant this year because tax reform rules now apply. Part of this may ultimately be investing in your business with new capital and equipment.

Technology is changing at an accelerating pace so have your IT up to date and ready to change going forward.

Automate what you can. Hiring is more expensive and it's so tough to recruit.

Business conditions are unlikely to change much this year. There will be more income and more spending because more people are working and earning a higher salary.

Interest rates will go higher. All forecasts have the 30 year mortgage rate moving higher through the year.

Nevertheless, home prices will still move higher. If you are waiting for a pullback in prices, it won't be this year.

by Mark Schniepp
December 2017

Well the title should actually read: "It's the Economy Stupid." I hope that got your attention because you're gonna want to read this final feel good edition of the newsletter for 2017.

If you will recall, that was the old campaign slogan of Bill Clinton in 1992. And it's still true today because it's the answer to the question of why American households feel so optimistic about their economic futures. Except this time, conditions are stellar rather than lackluster as they were for much of 1992, prompting the regime change from Bush to Clinton.

Despite record numbers of retail closures this year, horrific fires, hurricanes, Kim Jong Un and an ugly World Series game 7 (for the Dodgers), the consumer confidence index rose another 3.3 points in November to the highest monthly reading in a generation, or since December 2000. Americans view their current and future job prospects very favorably; ditto their income growth and their spending levels. Consumers have been the strongest and most consistent source of growth in the current economic expansion.

The increase in household wealth has been stunning as wages are rising and stock and house prices have surged.

Last week's Gallup U.S. Economic Confidence Index rose sharply, at more than twice the rate as the average weekly gain observed over the past year. Like the Consumer Confidence Index, the Gallup pole measures American sentiment regarding both current and future economic conditions. The Gallup current condition component of the index rose to its highest level since Gallup began tracking economic confidence in 2008.

The confidence indices are now at some of the highest levels ever recorded. Why? Because economic growth is accelerating, everyone has a job, incomes are rising, homes are selling, and the new Star Wars movie is about to be released.

Speaking strictly in terms of the economy, 2017 has been a good year and perhaps the best year during this up phase in the economic cycle, which began in July of 2009.

We are now in year 8 of the economic expansion and by next summer, we will be in year 9. Economic expansions rarely go for 9 years but this one is clearly headed that way. We have no indications at this time that the economy is vulnerable. And fortunately, there are no bubbles, except for Bitcoin.

The economic expansion continues to power forward. Recent economic data have exceeded expectations and in some cases by a wide margin. Along with strong confidence in the economy, the unemployment rate is the lowest since 2001 and October existing home sales rose to their highest level since 2007.

Furthermore, third quarter 2017 gross domestic product growth was revised higher, from 3.0 percent to 3.3 percent. The nation is now growing at the fastest pace since 2014. We are likely to see approximately 2.7 percent growth in the current quarter of 2017 with consumer spending leading the charge. Remember, hundreds of thousands of vehicles need to be replaced in Texas and Florida. And tens of thousands of homes need major repair.

The likelihood of recession over the next six months is now at the lowest level since the risk of recession index was invented, back in 1996. If there is a chance that the economy will change over the next six months, it's likely going to be faster growth because of impending tax cuts, fire and hurricane rebuilds, infrastructure spending, and a rising stock market which is already at record levels.

The Senate Finance Committee passed its tax reform plan. The full Senate will now consider the bill. The potential for tax reform is a further contributing factor for high consumer confidence and record stock valuations.

OK, Conditions Appear Safe for Now but What are the Seeds for the Next Recession?

A myriad of conditions can produce a recession, but the ones that we can identify in the current environment are these:

Overly tight monetary policy

A supply shock

Another financial crisis

The Federal Reserve is expected to hike interest rates in December and several times in 2018. Despite low inflation of 1.3 percent in the core consumer price index, the Fed will decide that GDP growth is strong enough to boost the short-term federal funds rate to 3 percent by 2020 from 1.25 percent today.

Long-term rates that affect mortgages are likely to stay low if inflation remains contained, which we expect to be the case for a while.

So while the fed is trying to tighten monetary policy, their prescription for raising (normalizing) interest rates is very conservative and cannot be interpreted as "overly" in any sense of the word.

A supply shock is just that, a jolt to the domestic or world economy that is a shock, or unanticipated. We can't predict one and it's unlikely to happen. We do see that geopolitical risks are rising especially between North Korea and the U.S., so we are watching this with particular interest. But we can't otherwise predict a random event.

Another financial crisis is also very unlikely because of regulations put in place since the last financial crisis. Banks are quite healthy today. Nevertheless, international incidents including defaults by entire countries (like Greece or Spain) might always occur, especially in the very slow growth environment of Europe. We don't see this as a major risk, nor even a minor one. The European economy is actually strengthening, as is much of the rest of the world.

At this writing (December 2017), it appears that we will avert recession for another year. So plan accordingly.

The new 2018 Edition of the New Development in California report is now ready for purchase.

Order Now View Sample Report

The report documents the principal new non-residential and residential building projects under construction or in the pipeline all over California. This is a must report for all construction and building material contractors, and anyone that needs to understand the new development environment by region in California.

by Mark Schniepp
September 2017

The current environment for housing in California is being routinely referred to as a crisis. Many consider it a bubble and anticipate the possibility of another crash.

For California, the "housing crisis" is a direct consequence of the state's economic boom. And 30 years of resistance to housing development has resulted in an onerous environment for the creation of new housing today. California has always been a desirable place to live and over the decades has gone through periodic spasms of high housing costs. However, a booming economy and the lack of construction of homes and apartments have conspired to produce the current housing crisis.

The Heart of the Problem

The economic recovery and expansion have not occurred without consequences.

The technology revolution, epicentered in California and in particular the Bay Area,

has resulted in the creation of thousands of higher paying jobs. The record levels of foreign and domestic visitors vacationing in California has also pushed job creation in the visitor serving industries to all time record levels. The aging of the baby boomers and the Affordable Care Act are responsible for pushing employment in healthcare jobs to all time record levels.

The tech boom, the visitor boom, the healthcare boom, and the professional services boom have employed every California resident that wants a job and encouraged an estimated 512,000 net migrants into the state from 2011 to 2016.

The strong demand for and consequent creation of millions of new jobs since 2010 has encouraged extensive office development in San Francisco, Los Angeles, Orange County, and Santa Clara Counties.

But these counties have failed to build a commensurate amount of housing, for new workers and new in-migrating populations.

Cities have built high tech research parks and innovation campuses but have failed to build housing. Consequently, a major imbalance has resulted and this imbalance has manifested in sharply rising home prices and apartment rents since 2011.

The high cost of housing is principally a failure to build.

Proposition 13

And then there is Proposition 13 which caps property taxes, discouraging owners to sell their properties and face a major tax reset. And in recent years with property values escalating to all time record highs in the state, the disincentive to sell is too great so there is far less for-sale inventory of existing homes that would typically provide for a lot more inventory.

Furthermore, cities receive very little in property taxes from homes whose value has not reset in the last 10 or 20 years. Consequently, this fiscal disincentive which grows larger over time gives communities little reason to permit more housing, especially when the neighbors already oppose it for all the usual reasons.

Supply Limitations

Cities and Counties use zoning, environmental laws and procedural laws to oppose, discourage, and/or deny residential projects deemed too large or out of character.

There are also growth restrictions put in place by voter referendums that directly or indirectly limit housing development. Examples of these are density and height restrictions, or an actual limit on housing unit development.

Cities that deny housing are a principal and direct cause of the housing crisis.

The lack of housing supply, together with the demand for housing encouraged by a strong economy and record creation of jobs and income, has created a political environment where prospects for a state housing intervention appear more likely than ever.

Housing Elements

Since 1969, California has required that all local governments (cities and counties) adequately plan to meet the housing needs of everyone in the community. California's local governments meet this requirement by adopting housing plans as part of their "general plan." The law mandating that housing be included as an element of each jurisdiction's general plan is known as "housing-element law."

California's housing-element law acknowledges that, in order for the private market to adequately address the housing needs and demand of Californians, local governments must adopt plans and regulatory systems that provide opportunities for (and do not unduly constrain), housing development. Consequently, housing policy in California rests largely on the effective implementation of local general plans and, in particular, local housing elements.

However, providing opportunities under the housing element law and actually approving and permitting housing units are not the same. Getting the homes built is largely ignored by most jurisdictions in California today. Why? Because there is no real penalty for denying housing, even if there is adequate zoning for it.

The myriad of association of government agencies in California help to develop a RHNA for each county and city to follow for their zoning of housing. RHNA stands for Regional Housing Needs Allocation.

RHNA is supposed to enable cities and counties to anticipate their growth so that their quality of life is enhanced. And this includes producing a fair share of regional housing to accommodate anticipated growth.

However, too frequently, cities and counties use their planning processes as complex and complicated systems that confuse and frustrate prospective developers who must navigated through a labyrinth of requirements. It is often a highly discretionary process that effectively obstructs housing and therefore anticipated growth.

The most recently completed RHNA planning period is January 1, 2006 to June 30, 2014 for most Southern California counties. For this time period, housing estimates were developed based on population, employment and household growth projections. In Southern California, a total of 821,000 housing units were allocated. Only 404,500-less than half-were built. In the Bay Area, 215,000 housing units were planned for. Only 116,000 were built.

For the 2014 to 2021 planning period, the RHNA allocation for Southern California is 412,000 housing units, of which 180,000 are in Los Angeles County and 19,000 are in Ventura County. Permitted housing in L.A. County is currently on a pace that could meet the RHNA allocation. However, Ventura County is way behind.

Bills in Sacramento to Help Resolve the Housing Crisis

The general notion prevailing today is that the state needs to do more to penalize cities and counties that are blocking development before agreeing to spend more dollars subsidizing projects.

There is currently one law on the books from 1982, the Housing accountability act, which requires cities to approve housing projects if they meet 3 fundamental criteria. Cities often interpret the criteria with discretion, and projects are downsized or denied. Predictably, there has been a spate of lawsuits over the years between developers and cities arguing whether the criteria have been met.

There are now three more bills in Sacramento looking to move forward this Fall:
SB35 Affordable Housing: streamlining the approval process
This bill essentially forces housing recalcitrant cities to eliminate impediments to new housing development and accept a streamlined entitlement process from HCD for approving new housing developments.

HCD is the California Department of Housing and Community Development that promotes policies and programs to expand affordable housing.
SB 3 The Affordable Housing Bond Act of 2018
This effort would place a $3 billion bond for low-income apartment housing on the November 2018 ballot.
AB 1505 Inclusionary Housing
This potential law would require that any new development of rental housing include a certain percentage of affordable rental units.

Rent Control Initiatives by Tenant Coalitions

Momentum is now building again for the implementation of rent control to cap rental rates on housing in California. Currently about 15 cities have some form of rent control, including San Francisco, Oakland, and Los Angeles.

A bill has also been submitted in the California Assembly to repeal a 1995 state law-the Costa-Hawkins Rental Housing Act-that limits the scope of local rent control laws. AB 1506 seeks to eliminate rent control exemptions for duplexes, condos, and single family homes to enable rents to be capped on newer housing stock built after 1995.

And in the November 2016 election, rent and eviction control ordinances passed in Richmond and Mountain View.

Rent control was strengthened in Berkeley, Oakland, and East Palo Alto.

Voters passed Measure U1 in Berkeley, which increases the business license tax on landlords with five or more residential units. The tax increased from 1.1 percent to 2.9 percent of gross receipts. The tax may not be passed onto tenants.

In East Palo Alto, this same business license tax is 1.5 percent of the gross receipts of landlords.

Rent control was defeated in Burlingame and San Mateo and Alameda. But a rent review and stabilization ordinance was passed by voters in Alameda.

The Santa Barbara City council considered it in March 2017 but rejected pursuing it as a policy and will consider issues associated with rental mediations and inspections.

# data[].attributes.attachment_link.title
Uncategorized - California Economic Forecast

# data[].attributes.attachment_link.description
by Mark Schniepp May 2018 The employment report for April produced no surprises. Job gains remain relatively strong, the unemployment rate continues to tighten, and wage growth is ahead of inflation. It is curious that wages and salaries are not rising faster given the tightness of the labor market.

# data[].attributes.body
The development in the past 16 has been tremendous. California's Index showed modest gain in March. This series remains positive and consistent with an ongoing economic expansion for California this year. The state added a net 39,200 jobs in April building up some growth for the California economy heading to the second half of 2018.

# data[].attributes.body
“The younger generation was especially damaged by this cycle of events and some of them may have been permanently dislodged to the status of renters." - Dowell Myers / Director of the USC Population Dynamics Research Group

# data[].attributes.body
The Great Recession happened back in 2007 when George W. Bush was President. The Great Recession was a period of general economic decline in world markets during the late 2000s and early 2010s. It affected the United States financially. It took years to recover. California's housing market collapsed during the recession. The homes declined by more than 30%. it made it difficult for owners and buyers to qualify for new credit. The unemployment rate was about 12.4% which represented a two fold increases in the state unemployment rate. The national average unemployment rate is 10.1

# data[].attributes.body
What- California's Economy has grown by 3.4%, passing up the United Kingdom.
When- This has been going on since the month of May 2018.
Where- This is going on in the United States and in California.
Why- They have been growing so the state can make money out of what they giving to gain the money.
Who- It is California's Economy and other nations that are involved.

# data[].attributes.body
"California's economy has surpassed that of the United Kingdom to become the world's fifth largest, according to new federal data made public Friday."  - Gary Coronado / Los Angeles Times

"California's economy is so large, and has grown so quickly, that it is now the fifth-biggest in the world all by itself, according to US government data." - Kieran Corcoran / Business Insider

# data[].attributes.headline
California's Economy Became 5th Largest in the World

# data[].attributes.subject
California's Economy Became 5th Largest in the World

# data[].attributes.body
In the past 7 weeks, California's Economy has boomed since the month of May. It has surpassed the United Kingdom and their economy. California's new economic data puts them at $2.747  trillion dollars which is bigger than most nations. With such big numbers, it ranks California at 5th in the world, just passing the U.K who is on $2.625. This difference is outstanding because the United Kingdom is more heavily populated than California. California's economy grew by 3.4% in the past year. There are only 3 states that made the top 15 in the world's largest economy. With California being in 5th, Texas in 11th and New York in 13th. California has to thank its technology, entertainment and agriculture industries for its big boom.