2018 and Beyond: State of Housing in California + its Future

As we enter into 2019 to conclude this decade, we are seeing demographic trends continue to shift in California.

One of the biggest trends are that high-income earners are moving in and the middle class are moving out. They are being priced out of the housing market while the rents continue to rise. 

With the highest cost of housing in the nation there is a massive shortage of affordable housing in California. 

With some of the largest tech companies in the world headquartered in California employing a young energized talent pool, the free market will demand solutions for this. 

Thanks to a conversation with my buddy Mitch who was recently in Sacramento,l: 

1. Middle class is shrinking: We are seeing a demographics shift to foreign-born high income earners and low-income earners. 

2. Middle class is leaving the state for affordable alternatives like Arizona, Utah, Texas, Idaho, Oregon, Tennessee, etc. 

3. Growing trends in tribal-based culture focused around around a commonality. 

4. Tiny home movement demand at an all time high but few cities allowing these communities to co-exist. The affordable housing market is in high demand for creative alternatives for housing that is sustainable and net positive. Net positive is KEY and basically means “Is your project making the world measurably better?"


5. It is easier to navigate home owner laws by using a corporation. Setting up a corporation entity can bypass the restrictions that are put on you as an individual (your name vs using an LLC, S-CORP, C-CORP) when you’re trying to build. There many fees associated with building as an individual vs corporation. 

As California has a strong track record of being  innovative in so many areas of technology and entertainment, the housing market is ripe and ready for growth via innovation in modular, Pre-built, factory housing that is net positive. 

Everyone wants cheap affordable home and we are hungry for creative ‘out of the box’ solutions in the $600-1500 per month which is also attractive and net positive.

There’s a high probability that the changes will be tested in the modular space first. I will be looking more into http://PlantPrefab.com (funded by Amazon, based out of Rialto, CA). They appear to be well funded and already building out homes but haven’t released their price sheet.