California home prices up 5.6% in a year to 9-year high

If you are a buyer in the Santa Cruz, this is not the headline you want to read. To make it worse, the actual price increase in Santa Cruz is 14.5% since 2015. The main cause of this is low interest rates and low inventory (among other things). The local planning commission has been trying to come up with different ideas to help with this housing crisis. One of their better ideas is to increase density, which means to increase the amount of resident units that can be built on one parcel. This would create more inventory and hopefully satisfy some of the demand. I acknowledge that this option would bring more inventory, but feel that there is a bigger problem not being addressed, which is that most homes being built are to maximize profits for the developer. This means a minimal number of entry level or low income units. Typically the city or county requires a certain amount of BMR (below market units), but it is treated as a "penalty" and is sold at a loss to the builder. What I feel the planning commission needs to do is incentivize builders to build entry level and low income units by reducing application fees, allowing higher density, etc. I feel this would be a great step to helping our current situation.

To read the entire article, go to: http://www.ocregister.com/articles/percent-713596-prices-march.html