Workforce, Communities, and Housing
It’s no secret that California faces a severe shortage of affordable housing, particularly for low- and moderate-income residents.
It’s no secret that California faces a severe shortage of affordable housing, particularly for low- and moderate-income residents. In 2025, the state had 1.3 million more lower-income renter households than available affordable units. Between 2015 and 2023, California exceeded its production goals for higher-priced housing but fell dramatically short for affordable units— missing targets by over 270,000 units for very low-income housing. During this same period, median rent increased by 37% while renter incomes rose only 7%.
Since 1969, California has required that all local governments plan to meet the housing needs of everyone in their communities. This is called the Regional Housing Needs Assessment, and it determines how much housing is needed at each level of affordability in a certain area. Local governments must then develop a local Housing Element – which is a plan that details how they will meet these various housing needs. The cycle repeats every eight years to gauge progress towards meeting existing goals and then reevaluating to assess new needs. The state ran its fifth cycle of planning to meet housing needs between 2013 and 2020. California is currently in its sixth cycle of planning, which sets a goal of building 2.5 million new homes by 2032.
The State Weighs In
To address the current housing crisis, California is seeking to fundamentally restructure how and where housing gets 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 Needs Allocation (RHNA) process, all California jurisdictions are now required to plan for a certain number of new housing units, determined by state government.
This isn’t merely advisory guidance from the state; there are real consequences for failure. Laws like SB 35 (2017) and SB 423 (2023) give the California Department of Housing and Community Development authority to penalize jurisdictions that fail to build their RHNA-determined supply. For cities and counties that do not meet their housing unit targets, the state can preempt local zoning ordinances and make certain multifamily housing eligible for automatic “by-right” approval. This means localities that don’t meet their housing goals risk losing control over what gets built in their communities.
Community Engagement: Where will housing be built?
Critics of community engagement processes who support new housing construction have legitimate reasons for concern: Participants at traditional public hearings often aren’t representative of the larger community. Instead, people who participate in local debates about housing tend to be disproportionately white, wealthier, older, and homeowners rather than renters. And given that people who oppose a proposed development are four times more likely to show up at a public meeting than people who support it, it’s no surprise that some pro-housing advocates and elected officials view community engagement as an obstacle to getting things done.
The current moment calls for new ways to bring diverse community perspectives into the housing process and foster effective dialogue between communities, developers, and government. Rather than sidelining community input in the name of progress, California can take advantage of this moment to experiment with new models for engagement that enable broad public input and ensure that the benefits of new construction are widely shared.
Approaches to Balancing Meaningful Community-Engagement with Increased Housing Production in California
Workforce Capacity: Who will build new homes?
In addition to navigating local political dynamics, progress towards solving California’s housing crisis faces a practical problem. California’s Department of Housing and Community Development (HCD) estimates a need for 2.5 million new units over the next eight years. However, the industry struggles with labor shortages: 62% of California construction firms report difficulty filling positions.
Some argue that labor standards like prevailing wage laws (PWLs), which require workers on public projects to receive comparable compensation to private sector rates, can increase housing costs. While research does show some cost impacts, there are also documented benefits for PWLs, including increased apprenticeship enrollment, improved safety, and higher worker retention. Additionally, when workers are provided portable insurance, the increase in retention actually rises further.
Labor shortages and poor labor conditions can reinforce each other: worker retention rates are harmed by poor labor conditions, while contractors have less incentive to provide additional training when retention rates are low. There may also be ways to offset increased wage costs associated with PWLs. For example, higher labor standards can attract more skilled and productive workers.
Building the Residential Construction Workforce in California: An Introduction to Labor and Housing Costs
The “Both/And” Path Forward
In a recent Possibility Lab survey, 71% of California voters reported difficulty accessing suitable housing at a price they can afford. Solving California’s affordable housing shortage requires holistic thinking that doesn’t pit housing production against workers or communities. Strategic investments in workforce development can simultaneously increase productivity, reduce delays from labor shortages, 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 solution sourcing, instead of enabling obstruction, can benefit neighbors and neighborhoods – as well as Californians as a whole.
By addressing both where housing gets built through effective community planning and who builds it through workforce investment, policymakers can pursue solutions that build housing capacity and workforce capacity, together.
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