CALIFORNIA OPPORTUNITY ZONES
California is home to ten of the least affordable major markets and six of the fifteen most expensive large metropolitan rental markets in the country. Rising costs continue to strain homeowners and renters statewide and negatively impact the state’s quality of life and long-term economic prosperity.
Recently released population estimates from the California Department of Finance show the state added only a net 77,000 completed housing units in 2018. This is down from 85,297 units in 2017, which was down from 89,457 units in 2016. The underproduction of supply continues to define the housing crisis the state is currently facing.
The Governor’s Budget introduced a comprehensive $1.75 billion proposal to spur housing production, including planning and production grants to local governments, expansion of the state’s housing tax credit program and loan program for mixed-income housing, and opportunities for innovative housing projects on excess state property
Across the United States, a total of 8764 census tracts have been designated as Qualified Opportunity zones. The state of California has been granted the most census tracts with 879 (10%) in total. More specifically, Los Angeles county alone has a total of 274 census tracts.
The State of California’s goals are aligned with the Federal Opportunity Zone Program in hopes of being able to eliminate the housing deficit that is haunting the state. California’s Governor, Gavin Newsom, believes that Opportunity Zones could be a way to draw investors into California and prevent them from prioritizing lower-tax states. “We want to address the issue that we have the highest tax rate in the United States. We’re not naive about that,” Newsom said.
However, he said for the program to succeed, it has to spur investment while benefiting existing residents, rather than just investors.
“We don’t just believe in growth. We believe in inclusion. You can’t have one without the other,”
Los Angeles has remained a growing City since its inception – a rare feat amongst large cities in America. Despite continued growth, the City’s population grew more slowly during the last decade than it has in the City’s history. In fact, the previous decade marks the first time in 110 years that the City’s growth did not equal at least 100,000 over a 10-year period. The population slowdown is believed to have occurred mostly during the middle of the decade (2004-2007), when the City actually lost population.
From 2000 to 2010, the population increased just 2.6%, compared to 6% during the 1990s and 17.5% during the 1980s (Chart 1.1). The growth rate is much slower than the State of California’s (10%) and slightly below Los Angeles County’s (3.1%). The 2010 population figure of 3,792,6212 is well below the City’s estimated projection of 3,957,900 from just 2005. The official California Department of Finance estimate for the City’s population on January 1, 2012 is 3,825,297. Growth is expected to increase by over 140,000 by the end of the Housing Element Update planning period in 2021, with an expected population of 3,965,433 by September 30, 2024. This would represent a 4.6% growth rate from 2010. Los Angeles is expected to grow to 4,320,600 by 2035.