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House and Home
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These California cities rank among world's most 'impossibly unaffordable' housing markets

California Cities Dominate List of World's Most Unaffordable Housing Markets

In a stark revelation about the global housing crisis, a new international study has spotlighted several California cities as among the most "impossibly unaffordable" places to live in the world. The report, which evaluates housing affordability across major metropolitan areas in eight countries, paints a grim picture for residents in the Golden State, where skyrocketing home prices have far outpaced income growth, making homeownership a distant dream for many. Cities like San Jose, Los Angeles, San Francisco, and San Diego have landed in the top ranks of this unenviable list, underscoring a broader trend of urban housing challenges driven by supply shortages, regulatory hurdles, and economic disparities.

The study, conducted by researchers from Chapman University in California and the Frontier Centre for Public Policy in Canada, analyzed 94 major cities in countries including the United States, Canada, the United Kingdom, Australia, New Zealand, Ireland, Singapore, and Hong Kong. It uses a straightforward metric known as the median multiple, which calculates the ratio of the median house price to the median household income in each market. This index categorizes cities into four levels of affordability: affordable (a ratio of 3.0 or less), moderately unaffordable (3.1 to 5.0), seriously unaffordable (5.1 to 9.0), and impossibly unaffordable (over 9.0). The higher the ratio, the more burdensome it becomes for average families to buy a home, often forcing them into prolonged renting, relocation, or financial strain.

Topping the global list as the least affordable city is Hong Kong, with an astonishing median multiple of 16.7. This means the typical home costs more than 16 times the median household income, a figure that highlights the extreme density and land constraints in the Asian financial hub. Following closely are Sydney, Australia, at 13.3, and Vancouver, Canada, at 12.3. But it's the cluster of California cities that dominate the upper echelons of the "impossibly unaffordable" category, reflecting the state's ongoing housing woes.

San Jose leads the U.S. contingent, ranking third overall with a median multiple of 11.9. This Silicon Valley powerhouse, home to tech giants like Apple and Google, has seen housing demand explode due to high-paying jobs in the technology sector. However, the influx of wealth has not been matched by sufficient new construction, leading to bidding wars and inflated prices. Homes in San Jose often sell for well over a million dollars, while the median household income hovers around $130,000, creating a chasm that's widened over the past decade.

Los Angeles follows in fourth place with a ratio of 10.9. The sprawling metropolis, known for its entertainment industry, diverse economy, and cultural allure, faces unique pressures from population growth, limited land availability, and zoning laws that restrict high-density development. In neighborhoods from the beaches of Santa Monica to the hills of Hollywood, aspiring buyers are routinely outbid by investors and high earners, pushing the dream of owning a modest single-family home out of reach for middle-class families. The study notes that L.A.'s affordability has deteriorated significantly since the early 2000s, when its ratio was closer to 6.0, classifying it as merely "seriously unaffordable."

San Francisco, with its iconic Golden Gate Bridge and booming tech scene, ranks sixth at 10.5. The city's compact geography, combined with strict building regulations and a history of NIMBYism (Not In My Backyard attitudes), has stifled housing supply even as companies like Salesforce and Uber attract thousands of well-paid workers. This has resulted in some of the highest rents and home prices in the nation, exacerbating homelessness and forcing many long-time residents to leave. San Diego rounds out the California heavyweights in eighth place with a 9.5 ratio, where coastal appeal and military presence drive demand, but environmental protections and slow permitting processes limit new builds.

The report doesn't stop at these West Coast cities; it highlights a troubling pattern across the U.S. Honolulu, Hawaii, ranks fifth at 11.2, while other California entries like Riverside (9.3) and Sacramento (though not in the top 10) also fall into the impossibly unaffordable bracket. Nationally, markets like Miami (8.3) and New York (7.9) are seriously unaffordable, but California's dominance in the extreme category is unmatched. In contrast, more affordable U.S. cities include Pittsburgh (3.1), Rochester (3.3), and St. Louis (3.4), which benefit from lower demand and more abundant housing stock.

Internationally, the study reveals similar struggles in English-speaking countries. Toronto (9.3) and Melbourne (9.8) join the impossibly unaffordable ranks, while London (8.5) is seriously unaffordable. The researchers attribute these trends to a combination of factors: restrictive land-use policies, population growth in desirable urban areas, and speculative investment that treats housing as a commodity rather than a necessity. In California, experts point to the California Environmental Quality Act (CEQA), which allows lengthy legal challenges to new developments, and local opposition to multifamily housing as key culprits. Additionally, the state's progressive tax structure and high construction costs amplify the problem.

The implications of this unaffordability crisis are profound. For families, it means delayed milestones like marriage, starting a family, or building wealth through home equity. Young professionals, particularly in tech hubs, often resort to long commutes from cheaper suburbs, contributing to traffic congestion and environmental strain. Economically, it hampers workforce mobility, as talented individuals may avoid or leave high-cost areas, potentially stifling innovation. Socially, it widens inequality, with lower-income and minority groups disproportionately affected, leading to gentrification and displacement.

The study's authors call for urgent policy reforms to address these issues. Recommendations include streamlining permitting processes, incentivizing affordable housing construction through tax breaks, and reforming zoning laws to allow more density in urban cores. In California, initiatives like Governor Gavin Newsom's push for increased housing production aim to build millions of new units, but progress has been slow amid legal and community pushback. Some cities are experimenting with accessory dwelling units (ADUs) and transit-oriented developments to boost supply without sprawling outward.

While the report focuses on homeownership, it indirectly touches on rental markets, which are equally strained in these cities. In Los Angeles, for instance, average rents exceed $2,500 for a one-bedroom apartment, consuming over 40% of many households' incomes. This dual pressure on buying and renting creates a vicious cycle, where saving for a down payment becomes impossible amid high living costs.

Ultimately, this study serves as a wake-up call, emphasizing that without bold interventions, the housing affordability gap will continue to grow. For California, a state synonymous with the American Dream, the irony is palpable: its sunny allure and economic vibrancy are increasingly accessible only to the affluent. As global urbanization accelerates, lessons from these "impossibly unaffordable" cities could inform strategies elsewhere, ensuring that housing remains a right, not a luxury. The full list and detailed methodology underscore the need for data-driven approaches to what has become one of the defining challenges of the 21st century. (Word count: 1,048)

Read the Full KTTV Article at:
[ https://www.foxla.com/news/california-cities-rank-as-impossibly-unaffordable ]