Sponsored: Workforce, Communities and Housing

It’s no secret that California faces an acute shortage of affordable housing, especially for low- and moderate-income residents. In 2025, the state had 1.3 million households with lower income renters more than available affordable housing. Between 2015 and 2023, California exceeded its goals for producing higher-priced housing, but dropped dramatically for affordable units— missing targets by more than 270,000 units for very low-income housing. During this same period, average rent increased by 37% while renters’ income increased by only 7%.

Since 1969, California has required all local governments to plan to meet the housing needs of everyone in their communities. This is called a Regional Housing Needs Assessment and determines how many homes are needed at each affordability level in a particular area. Local authorities must then develop a local housing element – ​​which is a plan that details how they will meet these different housing needs. The cycle is repeated every eight years to assess progress towards existing goals and then reassess to assess new needs. The state conducted its fifth planning cycle to address housing needs between 2013 and 2020. California is currently in its sixth planning cycle, which aims to build 2.5 million new homes by 2032.

The state weighs

To address the current housing crisis, California is seeking to fundamentally restructure how and where housing is built. While land use decisions have historically been made at the local level, the state has recently taken on an assertive new role. Through the Regional Housing Need Allocation (RHNA) process, all California jurisdictions are now required to plan for a certain number of new housing units determined by the state government.

These are not just advisory guidelines from the state; there are real consequences for failure. Laws such as SB 35 (2017) and SB 423 (2023) give the California Department of Housing and Community Development the power to penalize jurisdictions that fail to build their RHNA-mandated supplies. For cities and counties that do not meet their housing unit goals, the state can pre-empt local zoning ordinances and make certain multi-family housing eligible for automatic approval “by right.” This means that localities that do not meet their housing targets risk losing control over what is built in their communities.

Community engagement: Where will housing be built?

Critics of community engagement processes that support new housing development have good reason to be concerned: participants in traditional public hearings are often not representative of the larger community. instead people who participate in local debates on housing tend to be disproportionately white, wealthier, older, and homeowners rather than renters. And given that the people opposed to the proposed development are four times more likely to show up at a public meeting than the people who support it, it’s not surprising that some housing advocates and elected officials see community engagement as an obstacle to getting things done.

The current moment calls for new ways of bringing diverse community perspectives into the housing process and fostering effective dialogue between communities, developers and government. Instead of ignoring community input in the name of progress, California can use this moment to experiment with new engagement models that allow for broad public input and ensure that the benefits of new construction are widely shared.

Read the report: Approaches to Balancing Meaningful Community Engagement with Increased Housing Production in California

Labor Capacity: Who Will Build New Homes?

In addition to navigating local political dynamics, progress toward solving California’s housing crisis faces a practical challenge. The California Department of Housing and Community Development (HCD) assesses the need for 2.5 million new units over the next eight years. However, the industry is struggling with labor shortages: 62% of construction firms in California report difficulties filling positions.

Some argue that labor standards such as prevailing wage laws (PWLs), which require workers on public projects to receive compensation comparable to private sector rates, can increasing housing costs. While research shows some impact on coststhere is also documented benefits for PWL incl increased enrollment for apprenticeshipsimproved safety and greater worker retention. Furthermore, when workers are provided with portable insurance, the increase in retention is actually increasing further on.

Labor shortages and poor working conditions can reinforce each other: worker retention rates are worsened by poor working conditions, while contractors have less incentive to provide additional training when retention rates are low. There may also be ways to offset the increased wage costs associated with PWL. For example, higher labor standards can attract more skilled and productive workers.

Read the report: Building the California Housing Workforce: An Introduction to Labor and Housing Costs

The way forward “both/and”.

In a recent study by Possibility Lab, 71% of California voters report difficulty accessing suitable housing at a price they can afford. Addressing California’s affordable housing shortage requires holistic thinking that does not pit housing production against workers or communities. Strategic investments in workforce development can simultaneously increase productivity, reduce labor shortage delays, and improve workers’ quality of life—ultimately benefiting both subsidized and market-rate housing. Likewise, finding ways to engage communities in decision-making that allow for meaningful dialogue and reward sources of solutions rather than enabling obstruction can benefit neighbors and neighborhoods—and Californians as a whole.

By addressing both where housing is built through effective community planning and WHO builds through investment in the workforce, policymakers can pursue solutions that build housing capacity and workforce capacity together.

To learn more, visit the UC Berkeley Possibility Lab’s People-Centered Policymaking site