By Jodi Summers

Nationwide, 70 percent of Americans own a home. Statewide, 58 percent of Californians own a home. A report recently released by the California Building Industry Association noted that the state’s home-ownership rate is 49th of the 50 states, with New York coming in last. Thank the bureaucracy for those stats — the study shows that the disparity in home ownership dates back to the increase in builder liability.

The push for home ownership in the U.S. has been a national objective since the 1860s, when President Abraham Lincoln signed the Homestead Act, granting families 160 acres of federal land so long as they built a home and farmed the land for at least five years. Locally, Rancho San Vicente was approximately 48,000 acres between the ocean and Sepulveda Boulevard. Originally known as el Rancho San Vicente y Santa Monica, the parcel was a Spanish land grant made by Juan Alvarado, Governor of the Californias, to Francisco Sepulveda in 1839.

Another federal push to expand homeownership came with the passage of the National Housing Act of 1934, which promoted the construction of new houses, the repair and modernization of existing houses and the improvement of living conditions.

“Having a home gives you a feeling of security, of belonging, of community,” notes an Ocean Park homeowner.

To get from California’s 58 percent home ownership to the national average of 70 percent, an additional 1.6 million California families would own their primary residence. Wouldn’t that make the state a better place? Kind of like it used to be in the days of the orange groves, when California was part of the norm.

Back in the peaceful times of 1950, California was in parity with the national homeownership rate. The Golden State held close to the national median well into the 1960s. Even as late as 1970, California was at parity with the nation on single-family home prices. Then came laws, rules and regulations. An increasing number of restraints were placed on development within the state, decreasing anyone’s interest in building and constraining new home development. Growing demand, coupled with a non-increasing supply, eliminated California’s pricing parity. That has grown into a difference of more than $300,000 between California home pricing as compared with the rest of the nation. A lack of supply has pushed up pricing and created a homeownership rate more than 10 percent below the national average.

Key legislative decisions that affected California home prices include:

- Enactment of the California Environmental Quality Act (1970): Encouraged litigation against homebuilders and developers in both urban infill and suburban projects. Housing delegates note that as the result of CEQA lawsuits, and the threat of litigation, housing proposals were scaled back or abandoned, resulting in fewer new homes being built and higher costs for the ones that were built.

- The Friends of Mammoth decision (1972): Mandated environmental review of private projects. This decision compels state and local agencies to consider the possible adverse consequences to the environment, thus propelling major litigation activity for many major housing projects. Think about the recent Playa Vista Wetland litigation. The decision does not consider the benefits of housing.

- Passage of the federal Endangered Species Act (1973): With one set of signatures, this act removed millions of acres nationwide from the land development inventory of growing metropolitan areas.

- The California Coastal Act (1976) gives state jurisdiction to lands up to five miles inland and mandates development approval.

- The Petaluma decision (1975) upheld the state’s first growth control measure and affirmed that local governments can limit new housing construction to a specified number each year.

From 1995, through our most recent housing boom, homeownership rates have increased from 65.1 percent to 70.3 percent nationally, excluding California. In the Golden State for that same time period, the ownership rate has increased from 55.4 percent percent to 57 percent.

California Building Industry Association 2006 chairman Layne Marceau promotes reforms to allow more Californians to own their own homes. In addition to benefiting the building industry, he notes that reforms would benefit the state in several ways, noting that home ownership “helps individual families prosper, strengthens communities and improves our overall standard of living.”

“The study found that if home-ownership rates were increased to just the national average, state and local tax revenues would increase by more than $4 billion a year,” notes CBIA chief economist Alan Nevin, who masterminded the report. “Getting California to the national average could help fund much needed transportation, flood protection, education and public safety improvements.”

The current agenda of CBIA proposes a number of reforms to bring the housing supply and demand back into balance, stabilize prices, protect equity for homeowners and increase affordability. CBIA’s reform objectives include:

- Reforming the land use process to ensure that a sufficient supply of land is zoned locally to meet a community’s long-term housing needs.

- Change policies that act as barriers to “downtown” development.

- Creating infrastructure financing programs and enacting long-term bonds to pay for new roads, water supply improvements and flood protection. This is said to help control rapidly growing “developer fees” that currently pay for what infrastructure is built.

A key components of CBIA’s 2006 legislative agenda is Senate Bill 1800, sponsored by State Sen. Denise Ducheny, D-San Diego, which would ensure that a sufficient supply of land is zoned to meet a community’s long-term housing needs. Additional CBIA legislative measures include construction litigation reform, infrastructure financing, flood protection, fee accountability and reform of the California Environmental Quality Act (CEQA).

(Jodi Summers is director of the investment division at Boardwalk Realty Santa Monica. Contact her at jodis@boardwalkrealty.com, or call 310-309-4219.Visit her Web site at www.santamonicalandmarks.com.)