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California Proposes a Comeback Plan to Address Rising Homelessness

Homeownership Program

The current homeless crisis in California is appalling, with an additional 21,000 homeless people in 2021. Between 2018 and 2019, California witnessed a massive 16% increase, which is bigger than all the states in the United States combined. Currently, the total number of homeless people in California is 160,000, and homeless families with children amount to about 25,000. This data is provided by the Department of Housing and Urban Development.

Shortage of Homes is the Significant Contributing Factor to the Crisis

While we can attribute this rise partly to the Covid-19 pandemic, the major cause of homelessness is the shortage of housing in the state. The housing shortage has been a massive problem since the start of the 2010s across the United States, and it’s one of the factors driving home prices upwards. The lack of affordable housing further aggravated the crisis.

According to the McKinsey Global Institute data, only 50% of households can afford the price of housing in their locale. This asserts that only a few low-income families can pay housing costs independently. Therefore, constructing new homes is imminent to boost the economy and increase household formation.

In response to the crisis, California then proposed a 5-year $100 billion investment plan, known as the California Comeback Plan. This plan will build upon the two previous programs, Project Roomkey and Project Homekey, approved in March and July 2020. The Comeback Plan will build 46,000 additional units to 65,000 Californians.

The Plan is to Complement the Previous Projects

The Comeback Plan complements the previous plans, as its main objective is to expand the Roomkey and Homekey projects by funding them with an additional $12 billion. Most of the funding will be directed to building more low-income houses and homeless families, clearing and transforming public areas into housing. It will also fund the conversion of motels, vacant structures, and hotels into temporary homes.

But McKinsey opines that for California’s homeless crisis to end finally, the state must build approximately 3.5 million housing units in the same timeframe. However, this is not feasible, considering the low number of constructions going every year. And then, there’s the pandemic. Builders are skeptical of constructing homes due to the rising cost of timbers and the zoning laws limiting the building of certain types of houses in specific areas.

The projected 3.5 million housing units can only be attained if zoning laws are modified, and timber prices decrease. Doing this will result in a healthier level of construction, which will force house prices down and arrest the pending homeless crisis.

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The Power Is Now Media is an online multimedia company founded in 2009 by Eric L. Frazier, MBA, and is headquartered in Riverside, California. We are advocates for homeownership, wealth building, and financial literacy for low to moderate-income and minority communities. The Power Is Now Media corporate office is located at 3739 6th Street Riverside, CA 92501. Ph: 800-401-8994 Website:

Published by Eric Lawrence Frazier, MBA

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