Housing Permit Data Tells the Tale of Texas Versus California, Abbott Versus Newsom

While the entire country is seeing a slowdown in housing construction due to higher interest rates, the Dallas-Fort Worth (DFW) area is surging ahead of the entire State of California when it comes to housing permits.

According to the Federal Reserve, DFW, with only 8.1 million residents, permitted 7,851 homes in April, while California, home to a whopping 39 million people, only gave the green light to 7,612 homes. That’s five times more homes per person in DFW compared to California!

So, what’s the deal?

Housing experts say it all comes down to two things: labor costs and regulations. Joseph Cohen, the head of the Los Angeles Housing Production Institute, explained to The Center Square, “In much of the state nothing pencils right now. I would not be surprised if we see decreased housing production throughout much of California for the foreseeable future.”

Basically, it’s just too expensive and complicated to build homes in California right now.

In Dallas, the cost of living is lower, which means construction workers are paid less, and there are more contractors to choose from.

Plus, getting a contractor’s license in Dallas is a breeze – you can walk in and get one the same day. In California, you need years of experience and have to pass a tough test.

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Even if California makes it easier to build by cutting back on regulations, they might not have enough workers to get the job done.

Cohen also points out that a lot of the homes being built in Dallas are in the suburbs, which is much cheaper and easier than building in the city.

He warns that Dallas might face the same problems as California in the future, saying, “We just don’t have the land to sprawl into coastal California like they do in Texas. They’ll be dealing with much higher land costs in 20-30 years, we’re just ahead of them.”

California’s home permitting has taken a nosedive, dropping 45% from 2022 to 2023.

At this rate, it would take over 60 years to fix California’s current housing shortage of 4.5 million homes.

To make matters worse, a family would need to earn $224,000 a year to afford a typical $900,000 California home – that’s almost three times what the average family makes!

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It’s no wonder that 45% of Californians are thinking about moving out of the state because of the crazy housing costs.