For two-plus decades, his eponymous Orange County-based company has become a critical cog in homebuilding thinking because its research looks far beyond real estate basics to encompass broader economic and demographic changes – not to mention the fleeting desire of house hunters.

So the company has now shed “real estate” from its corporate monicker, morphing into John Burns Research and Consulting from John Burns Real Estate Consulting.

Let me give you a noteworthy example from the novel Burns thinking: The company’s analysis suggests the nation is only 1.7 million homes short of what’s needed – a fraction of other housing shortage estimates.

Why so small, especially considering how high prices have become?

“Truthfully, it’s because they haven’t done their research,” Burns says. “They use back-of-the-envelope calculations: We normally build X number of homes per decade and last decade we only built Y. So we must be short 5 million homes. But that’s misses that we overbuilt the prior decade and we’ve got much less population growth. Most of those calculations have very little analysis behind them.”

And the pandemic’s buying binge, he adds, “was driven by dropping interest rates.”

The thought process behind the firm’s new name, its research, and housing dynamics can be summed up in this interview with Burns that’s been edited for length and clarity.

Q. How is your analysis different?

A: It’s really kind of at the heart of the people I’m hiring – doing great research and consulting as opposed to, you know, real estate people. And we just decided this new name says better who we are. And also we’ve grown. We have a lot of building products clients now. We have a lot of hedge funds. Those clients are literally using us to have a stronger view of what’s really going on in housing and the economy. So I’m using this as a platform to expand into different industries. That’s our future.

Q: Is the builder-consulting business still any good?

A: We grew 82% in the last two years. But this was really a diversification and growth opportunity. This wasn’t real estate going away at all.

Q. So what’s different about today’s new home shopper vs. 10-15-20 years ago?

A: Affordability and ‘What am I willing to sacrifice?’ They’re willing to give up the living room, the dining room. They’re really willing to give up the kitchen table and eat at a nice counter. They don’t need a big office. It’s about smaller square footage. But getting light into the house is absolutely positively critical. So there’s a lot of really cool things going on with window placement. That may not sound interesting but the homes being built are so dense it’s hard to get light inside unless you do things right.

Q. Work from home is key?

A: That’s been the game-changer. Even if it’s just 10% or 20% of people can work from home two days a week, that means that they will now live in places where they would not if I had to do that five days a week.

Q. Why can’t we get many starter homes built?

A: It’s kind of a price thing. I guess you could call it builder greed. But it’s really if builders put a smaller home on some of these lots, they would need to pay less for the land. And land sellers are not going to sell it. So literally, it’s not financially feasible for builders to pay market value for land and put a starter home on it. So there’s no business model without subsidies – or you go to the really outlying areas where the land is much less expensive.

Q. It’s stunning how few homes, new or existing, are being bought today.

A: I actually thought it was going to go below this. I do a lot of public speaking in front of a lot of audiences, now that they’re having audiences again. To hammer the point home, I ask: ‘Who owns a home with a 3.5% or less mortgage rate?’ Two-thirds raise their hand. ‘Okay, keep your hand up. If you’re looking to move.’ Everybody puts their hand down. It’s just there’s nothing on the market.

Q. Who could afford to buy even their own home today?

A: I am speaking in front of a lot of executives and a lot of them could. But why would you? We survey a lot of resale agents. The last survey found 10% of clients were moving, buying another home, and keeping their old home to rent out because the spread between the rent and a mortgage payment was so huge.

Q. If you magically became a housing czar with all sorts of powers, what would you suggest to fix some of this?

A: I’m not a policy guy. But I would focus on one thing that is not discussed enough, which is getting people’s incomes up. And California should have more of a growth orientation, where they accept growth. Like in the middle of California along I-5 or Highway 99. You could attract employers there and build cities there and focus on focus on areas where you don’t have to fight the NIMBYs.

I did some work in Korea in the mid-1990s. They were building cities outside of Seoul. Cities went from zero to 500,000 people in less than a decade because they built the infrastructure to get out there and they built the homes. People had a job or they were able to commute back into Seoul.

On the affordable housing side, building something new and affordable makes no sense to me. Taking that money and helping people rent or buy an older home that needs to be fixed up makes far more sense.

Q. So what do you think will happen next?

A: Mortgage-payment-to-income ratios need to come back in line through a combination of falling home prices, falling mortgage rates, and rising incomes. And all three of those things are happening right now. They’re just happening pretty slowly. We think that could happen by the end of next year.

The bond market is signaling that mortgage rates should be in the low 5%. Wage growth continues to be north of 4%. So we’re thinking that’s going to continue. And then we think home prices are going to keep falling.

The homebuilders have already dropped prices, the equivalent of 12%. The resale market hasn’t done that. So the homebuilders are actually selling pretty well because there is much better value. They’re buying down the buyer’s mortgage rate close to 5% and found a sweet spot there.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

My office, Lee & Associates, celebrated 40 years this month. That’s right! All of my days have been spent at the same shop, which is a rarity for many in my trade.

Logging weekly my thoughts and experiences started in 2010 with my Location Advice Blog. And the Southern California News Group started publishing my columns in February 2015. Yep, that’s eight years and 400-plus columns.

What follows are the five most frequently asked questions asked of me as a commercial real estate practitioner. Plus, I will throw in a bonus one! Stay tuned.

Question 5: Can I make changes to the space and if so, who pays for it?

Generally and it depends.

Changes to a location – additional office, power upgrade, sprinkler retrofit, paint and carpet, moving walls, installing racks, distributing power, etc. can generally be accomplished subject to ownership approval and governmental approval with the proper permitting and code construction.

Changes to the square footage (IE: adding a structural mezzanine), changes to the common area, fencing required parking spaces, creating windows in bearing walls – not so easy.

Changes are typically paid for in one of three ways: the owner pays for all of the cost and concedes the cost (rare), the occupant pays for all of the cost (even rarer), or some combination of the two. This compromise could be an owner paying for the refurbishment of the space such as paint, carpet, and cleanup and conceding the cost and paying for the cost of a sprinkler retrofit and amortizing the cost over the term of the lease.

The “acid test” of who pays depends upon the owner’s ability to pay, the owner’s motivation, the general or specific nature of the improvements (think future marketability) and the market (is the competition delivering space to the market completely refurbished). Sometimes an owner will be willing to compensate a tenant in the form of free or half rent to offset the cost of changes.

Question 4: How do you get paid?

The owner of the property pays us.

A common misconception is the fee adds to the purchase price or lease rate. The reality is an engaged agent can achieve a much higher purchase price than the typical owner because of market knowledge and experience. On the occupant side, an experienced agent can negotiate a better lease rate and concession package because of our knowledge of comparables, availabilities, and motivation. The net result is a better deal for both parties.

Question 3: How long have you done this?

Since 1984

Real estate content (comps, avails, absorption, current pricing) is the same but the method of delivery is different. Who would have foreseen in 1984 that I would be doing this when I turned 66- prior to fax machines and the world wide web! Or, that we could survey inventory of available buildings – in our car – or at the beach – and send a list with images to our clients with the click of a button. Or, that we could send a video – in real time – of the property – unbelievable!

Question number 2: How much is my building worth?

That depends on a number of factors.

We consider the market – up trending or down trending, comparables and availabilities. If the market is up trending, chances are your building is worth more than the comps suggest. If the market is down trending, you might be best served to price lower than the recent comps and preempt a long marketing cycle. Marketing time plays a role. How long can you afford to market the building? A fire sale motivation will cause the building to be worth less. Does the building have special amenities – excess or surplus land, upgraded power, fenced yard, freezer/cooler space, special AQMD permits, etc. For the right buyer or tenant, these amenities can add to the price.

Question number 1: How is the market?

In a word, weird.

I’ve written ad nauseam lately about our markets. Suffice it to say a lot has changed since our normal up-trending 2019 commercial real estate market. Global strife, a pandemic, decades of high inflation, recessionary fears, interest rate hikes, and bank failures have all added an air of uncertainty to the ways owners and occupants of commercial real estate view the world.

Bonus question: How do you come up with your content week after week?

So many different ways.

Typically, I gain inspiration from the economy, deals I’m transacting and client interactions. Oh. And my neighbor’s occasional insight. Thanks, Rudy.

Did I leave any out? Please send me an email with your question and I will promptly respond.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.

My trusty spreadsheet, filled with state job figures released Friday, May 19, found 8.02 million at work in Los Angeles, Orange, Riverside and San Bernardino counties in April. The job count, not adjusted for seasonal variations, was up 52,100 in a month and up 160,100 in 12 months.

Local hiring averaged 22,620 in April between 2015-19. In March, 14,400 employees were added in the region.

The hiring rebound cut Southern California joblessness. Southern California’s unemployment rate was 4.1% for April compared with 4.6% in the previous month and 4.2% a year earlier. Joblessness averaged 4.2% in pre-pandemic 2018-19.

Industry swings

Look at job changes in 10 key Southern California business sectors, ranked by one-month change …

Leisure/hospitality: 1.06 million – up 11,000 in a month and up 39,700 in a year.

Education/health: 1.46 million – up 10,100 in a month and up 68,200 in a year.

Construction: 409,400 workers – up 8,200 in a month but down 900 in a year.

Professional-business services: 1.02 million – up 6,000 in a month and up 12,100 in a year.

Transport-warehouse-utility: 698,100 workers – up 4,100 in a month and up 13,500 in a year.

Information: 265,100 workers – up 2,200 in a month but down 900 in a year.

Financial: 410,300 workers – up 2,100 in a month and up 3,700 in a year.

Government: 1 million workers – up 1,800 in a month and up 18,700 in a year.

Retailing: 634,400 workers – up 1,600 in a month and up 9,400 in a year.

Manufacturing: 442,300 workers – up 300 in a month but down 2,000 in a year.

Regional differences

Here’s how the job market performed in the region’s key metropolitan areas …

Los Angeles County: 4.64 million workers, after adding 29,800 in a month and growing by 106,200 in a year. Hiring averaged 8,880 for the month between 2015-19. Unemployment? 4.5% vs. 5% a month earlier; 4.5% a year ago; and 4.6% average in 2018-19.

Orange County: 1.71 million workers, after adding 15,200 in a month and growing by 41,800 in a year. Hiring averaged 6,860 for the month in 2015-19. Unemployment? 3% vs. 3.4% a month earlier; 2.7% a year ago; and 2.9% average in 2018-19.

Inland Empire: 1.67 million workers, after adding 7,100 in a month and growing by 12,100 in a year. Hiring averaged 6,880 for the month in 2015-19. Unemployment? 4.1% vs. 4.6% a month earlier; 3.4% a year ago; and 4.2% average in 2018-19.

By the way, similar stats show the rest of California with 10 million workers in April – up 65,900 in a month and up 231,600 in a year.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

A: While an unpleasant task, collecting past-due assessments from members is a very important board responsibility. If the association does not require all members to timely pay their fair share, the good neighbors paying each month are going to have to pay more to make up for the neighbors who do not. Without collecting all due assessments, the association cannot pay its bills, which harms all HOA members.

Because of the importance of regular and timely assessment payment, the law gives HOAs some very powerful tools to help communities ensure they can meet the common expenses of homeowners.

First, Civil Code Section 5650(1) provides that if the association pursues assessment delinquencies it can also recover attorney fees, interest and late charges.

Second, Civil Code Section 5675(a) authorizes the HOA to record a lien (essentially an involuntary mortgage) on the property to secure the HOA’s assessment claim. The lien will make it harder to sell or refinance the property without first paying off the assessment claim.

Third, if the lien is still unpaid 30 or more days after it is recorded, the HOA can under Civil Code Section 5700 begin foreclosure proceedings to involuntarily take the property away from the owner.

There are two types of foreclosure. One is nonjudicial foreclosure, in which the HOA (usually through a collection vendor) provides a series of notices and after prescribed waiting periods can have the property sold at a foreclosure sale. The other type of foreclosure is judicial foreclosure, in which the HOA files a lawsuit against the homeowner asking for a judge to award money to the HOA and/or to have the property sold to pay the debt.

Homeowners should not ignore foreclosure notices and should act quickly to protect their homes. Completing a foreclosure is a very serious action, and HOAs should consult legal counsel before sending property to a foreclosure sale.

The obligation to keep members current on assessment collection is a serious matter and should be taken seriously by both the HOA board and HOA homeowners.

Q: I’m a newly elected board member. As I’m looking over homeowner’s delinquency information, I’m concerned that several incumbent board members are delinquent. Is there any Civil Code that a board member should be current in their HOA dues? — D.S., Irvine.

A: The only automatic eligibility requirement to serve on HOA boards in California is that one must be an owner in the HOA.

Civil Code Sections 5103(d)(2) and 5105(c) provide five optional eligibility standards that associations may adopt, and one such standard is that candidates or directors not current in their payment of regular or special assessments may be disqualified from candidacy or serving on the board.

“Delinquent” is defined by Civil Code Section 5650(b) as not paid 15 days after an assessment becomes due. Civil Code Section 5103(d)(3) states that board eligibility requirements must also be applied to the seated directors, which means that if the election rules bar delinquent candidates then directors must also not be delinquent.

Kelly G. Richardson, Esq. is a Fellow of the College of Community Association Lawyers and Partner of Richardson Ober LLP, a California law firm known for community association expertise. Submit column questions to Kelly@roattorneys.com.

Last week’s column ended with a question about whether the California FAIR plan insurance fund has enough money to cover catastrophic events, and how long it would take to replenish the fund and make good on homeowner claims.

In the column, I suggested condo buyers and refinance applicants at associations blacklisted by Fannie Mae could get up to $20 million of gap insurance from the FAIR Plan for common area insurance shortages. In some situations, it just might be enough to cover any insurance gap, especially after Fannie Mae upped the ante, requiring 100% replacement coverage following the Champlain Towers collapse in Florida.

First, a correction to last week’s column. FAIR Plan actually has $1.4 billion in “aggregate loss retention,” a measure of coverage for excess losses, for instance, from a bad wildfire. I was previously told the plan had $400 million, according to Michael Soller, the DOI’s deputy commissioner of press relations.

Now, a billion dollars more is certainly far better than $400 million, but how far can that be stretched when (and not if) we have more wildfires like the Camp, Dixie, Glass, or Cedar calamities? For example, the total damage and estimated losses from the Camp fire were more than $400 billion.

In the meantime, insurance companies are bailing on tens of thousands of homeowners who have property in high fire-risk areas.

So, what is the FAIR Plan’s budget? The plan, considered a last resort by many because of its high cost and limited coverage, is seeking a 48.8% increase in its dwelling-fire rate, according to an email from Victoria Roach, president of the California FAIR Plan Association. The plan doesn’t have a budget for insurance coverage since wildfire exposure is different each year and in each fire, she told me.

Buyer beware: FAIR Plan, which insures condos, commercial properties and single-family homes, comes with some big caveats.

“FAIR Plan’s stripped-down homeowners’ policy is triple to quadruple the cost of a regular policy,” said Wendy Holt of Rancho Cucamonga-based Holt Insurance.

She said because of those high costs, only 10% to 15% of her clients carry the FAIR Plan. And owners/homebuyers must purchase supplemental companion policies because the FAIR Plan offers limited coverage, said Holt, who has been my insurance broker for more than 30 years. For example, it doesn’t cover theft, flood, earthquake, hail, vandalism or personal liability.

Now, think about this in terms of condominium associations that might benefit from adding the FAIR Plan. What is worse, paying for the FAIR Plan and the companion plan to get cheaper Fannie financing? Or finding a higher cost, non-warrantable condo mortgage without having 100% replacement coverage in the event of a catastrophic event like Champlain Towers experienced? Neither are affordable solutions.

For some context, let’s circle back on what a lack of insurance and Fannie financing looks like. In Laguna Woods, there were 75 active home listings on April 28, 2022, according to Steven Thomas, chief economist of Reports on Housing. There were 88 active listings as of April 27, 2023. The village recorded 18 financed condo sales in April 2022 compared with just four such sales this April, according to Lawyers Title. So that means listings went up 17% year over year but financed sales dropped 82% in the same period. Remember: Fannie pulled the plug on the Laguna Woods 6,102 condos on Jan. 31.

The FAIR Plan is a nonprofit and does not publicly disclose its financial information, but California law requires any rate changes to first be approved by the DOI.

The Department of Insurance and Commissioner Ricardo Lara have not responded to multiple interview requests by this columnist regarding the FAIR Plan’s insurance coverage.

Well beyond the Fannie condo blacklist, an insurance crisis is brewing for those who can’t find fire or gap insurance.

Freddie Mac rate news

The 30-year fixed rate averaged 6.39%, 4 basis points higher than last week. The 15-year fixed rate averaged 5.75%, unchanged from last week.

The Mortgage Bankers Association reported a 5.7% mortgage application decrease from last week.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $726,200 loan, last year’s payment was $527 less than this week’s payment of $4,538.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with 1 point: A 30-year FHA at 5.75%, a 15-year conventional at 5.625%, a 30-year conventional at 6.125%, a 15-year conventional high balance at 6.125% ($726,201 to $1,089,300), a 30-year high balance conventional at 6.625% and a jumbo 30-year fixed at 6.375%.

Note: The 30-year FHA conforming loan is limited to loans of $644,000 in the Inland Empire and $726,200 in LA and Orange counties.

Eye catcher loan program of the week: A 30-year VA fixed rate at 5% with 2 points cost.

Jeff Lazerson is a mortgage broker. He can be reached at 949-334-2424 or jlazerson@mortgagegrader.com.

US commercial real estate prices fell in the first quarter for the first time in more than a decade, according to Moody’s Analytics, heightening the risk of more financial stress in the banking industry.

The less than 1% decline was led by drops in multifamily residences and office buildings, data culled by Moody’s from courthouse records of transactions showed.

SEE MORE: Santa Ana office towers sell at a loss for $82 million

“Lots more price declines are coming,” Mark Zandi, Moody’s Analytics chief economist, said.

The danger is that will compound the difficulties confronting many banks at a time when they are fighting to retain deposits in the face of a steep rise in interest rates over the past year.

Excluding farms and residential properties, banks accounted for more than 60% of the $3.6 trillion in commercial real estate loans outstanding in the fourth quarter of 2022, with smaller institutions particularly exposed, according to the Federal Reserve’s semi-annual Financial Stability Report published last week.

“The magnitude of a correction in property values could be sizable and therefore could lead to credit losses” at banks, the report said.

Fed Vice Chair for Supervision Michael Barr told lawmakers on Tuesday that supervisors have increased their oversight of financial institutions with significant exposure to the sector. “We’re looking quite carefully at commercial real estate risks,” he said.

The price declines seen so far have been more marked for higher-priced properties, according to commercial property company CoStar Group. Its value-weighted price index has fallen for eight straight months and in March stood 5.2% lower than a year ago.

Transactions though have been limited in a market still coping with the aftershocks of the pandemic.

The rise in employees working from home has driven some downtown retailers and restaurants out of business and forced owners of office buildings to reduce rents to retain tenants or to sell all together.

“Regional and community banks currently account for a disproportionately large share of office real estate lending. Further consolidation of the banking industry may prove to be the solution that allows the banking industry at-large to work out problem loans,” said economist Stuart Paul.

In April, a twin office tower campus in Santa Ana sold for $82 million, according to the venture that bought it, nearly 36% less than what the seller, Blackstone, paid for it nine years ago.

Post Brothers recently bought a Washington office building that went for $92.5 million in the fall of 2019 for $67 million, while Clarion Partners is offering a San Francisco office tower for roughly half of what it paid around a decade ago.

Banks held more than $700 billion in loans on office buildings and downtown retailers in the fourth quarter of last year, according to the Fed. More than $500 billion of that was extended by smaller lenders.

Lending officers at banks told the Fed that they further tightened credit standards on commercial real estate loans in the first quarter.

Paul Ashworth, chief North America economist for Capital Economics, sees the risk of a “doom loop” developing, with a pull-back in lending by banks leading to a steeper drop in commercial real estate prices, in turn prompting even further cuts in credit.

One potential bright spot: The big run-up in prices in past years has left many borrowers with substantial equity cushions in the properties they own. That reduces the dangers of defaults and limits the potential losses for lenders.

The loan-to-value ratio of mortgages backed by office buildings and downtown retail properties was in the range of 50% to 60% on average at the end of last year for credit extended by bigger banks, based on data collected by the Fed.

“Delinquencies and defaults will rise, but I don’t think we’ll see a lot of forced sales,” Zandi said.

He forecasts prices dropping about 10%, assuming the US skirts a recession. If it doesn’t, the declines could get a lot worse.

“We’re on a razor’s edge here,” he said.

California bosses laid off 236,000 workers in March, a 60% jump from the average pace of job cuts in the previous 12 months.

The jump in workers’ involuntary departures to the fastest pace since December 2020 was found in my trusty spreadsheet’s review of the federal government’s monthly Job Openings and Labor Turnover Survey. The report, dubbed “JOLTS” by economists, tracks what’s moving the job market.

March’s layoffs are nowhere near the historic 1.5 million cuts of March 2020 amid coronavirus lockdowns. However, it’s a noteworthy spike that follows months of high-profile job cuts, notably in California’s technology industries and several eye-catching bank failures.

The bump in worker discharges is also a warning signal that the Federal Reserve’s year-long attempt attempts to cool an overheated economy with soaring interest rates are making bosses antsy.

California’s March layoffs are 25% larger than the monthly average in pre-pandemic 2015-19, what’s considered a healthy economic period. And they’re 7% bigger than the 2002-2006 housing-fueled boom. Those March cuts also are 12% above the typical month since 2001.

Or look at the March firings this way: Layoffs equaled 1.3% of all workers, up sharply from the 0.8% average of the previous 12 months.

Plus, it’s not a one-month uptick. Bosses laid off 1.84 million in the past 12 months – up 13% from 1.63 million in the previous 12 months.

Let me note the recent layoff spree is historically modest: Since 2001, the typical 12-month period has averaged 2.55 million forced departures.

Other slow signs

Growing boss unease also can be found in the number of job openings – 911,000, the lowest since March 2021 and down 24% vs. the average of the previous 12 months.

Still, California bosses seem to be hurting for workers. Historically speaking, openings are up 33% vs. 2015-19, and they’re up 108% vs. 2002-2006.

The need for employees equals 4.8% of all workers in March. That’s down from the 6.3% average in the previous 12 months, but it’s still well above the 3.9% pace of 2015-19, and 2.9% in 2002-2006.

But when you look at California’s openings as a measure of worker availability, the job market is tightening.

There were 90 unemployed workers for every 100 openings in March vs. 68 on average in the previous 12 months. But talent is still hard to find: there were 143 jobless for every 100 openings in 2015-19 and 250 in 2002-2006.

Do not forget bosses are still hiring, though at a slower speed.

The 606,000 new workers added in March was down 1% vs. the previous 12 months. New staff equaled 3.4% of all jobs in March vs. 3.5% average in the previous 12 months.

Nevertheless, this is a cooling of staff additions. The 7.36 million hired in the past year is down 6% from the previous 12 months.

In addition, think about total employment statewide – 18 million workers in March, up 11,900 from February vs. job growth averaging 40,000 the previous 12 months.

Quits chill

Workers also are sensing the chill, leading to a dwindling voluntary departure count.

California had 363,000 quits in March, the fewest since March 2021 and down 11% vs. the previous 12-month average. Or look at the pullback this way: The 4.83 million quits of the past year are down 6% from 5.13 million in the previous 12 months.

Yet this might be job quits returning to a more normal pace for an otherwise solid economy.

Yes, quitters were 2% of workers in March, the smallest share since January 2021, and down from the 2.3% average of the previous 12 months.

But California’s “so long, boss” crowd is only a shade above the 1.9% average of both the 2015-19 and 2002-2006 job-growth periods.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

State and federal dollars for homebuilding and affordable housing preservation rose to $6 billion in the fiscal year ending last September, up from $3.2 billion the year before, according to California Housing Partnership, an affordable housing advocacy group.

Nevertheless, the shortfall of homes affordable to low-income residents increased to almost 925,000 homes in 2022, up from 885,000 a year earlier.

SEE MORE: Why homebuyers won’t get a break in 2023

The reason, said housing partnership CEO Matt Schwartz, is homebuilding costs are up between 30-50% over the past five years.

“The cost to build is going through the roof,” Schwartz said. “The money that’s available has gone less far, and we haven’t made a dent.”

As a result, the affordable housing gap “really hasn’t budged” in the past few years. ”And that’s disappointing, given the amount of pandemic funding.”

The new housing needs reports show also that tenants need to earn two to three times the minimum wage to afford the average apartment rent.

RELATED: Most cities still falling behind affordable housing mandate

More than half of low-income renters in Southern California are paying more for housing than they can afford.

Fifty-two percent of low-income households in Los Angeles County are “cost-burdened,” meaning they spend more than 30% of their monthly income on rent. Economists say housing costs should be less than 30% of a household’s gross income to be affordable.

Cost-burden rates ranged from 55% to 58% in Ventura and Orange counties, and from 63-70% in San Diego, Riverside and San Bernardino counties.

At least one-fourth of the region’s middle-income residents are cost-burdened. And in Riverside County, half of middle-income households pay more than they can afford in rent.

And roughly half of the region’s “very low-income” residents are spending at least 50% of their monthly income on rent, leaving little cash available for other needs like food, utilities, medical care or transportation.

“Low-income renters continue to struggle with ever-increasing housing costs,” said the Southern California Association of NonProfit Housing, another affordable housing group. “Hundreds of thousands of Southern California residents are being left behind as the cost of living soars further out of reach, … exacerbating the regional homelessness crisis.”

The housing partnership reports show that while the region’s homeless population hovers around 90,000, the six counties have a combined total of only 59,000 homeless beds.

HOUSING TRENDS: Rent slowdown likely for Southern California apartments

The California Housing Partnership is a statewide nonprofit created by the state Legislature to foster affordable housing. It releases annual updates to its housing needs report every May.

In 2021, a housing partnership study said the state could meet all its affordable housing needs by spending $18 billion a year for 10 years.

It could come up with that money by setting aside 5% of the general fund for affordable housing production — similar to the Proposition 98 funding guarantee for public schools.

Schwartz said affordable housing needs to be treated like infrastructure, with long-term planning and funding. California doesn’t do that, he said.

State affordable housing levels have “never been enough to solve the problem,” Schwartz said. “It’s just enough to keep it from getting worse.”

There’s no shortage of “fun” in California, so relocating to a place with nearly as many leisure options is no easy task.

As a public service – not to mention highlighting an economic lesson or two – my trusty spreadsheet created “fun” grades for each state to help anyone contemplating an out-of-state move.

Now, if you’re in a hurry for the rankings, my math recommends moving to Florida, or Hawaii, Massachusetts, Colorado or Minnesota.

That’s the overall conclusion of a scorecard derived from eight measures of fun. How do states outside of California compare on benchmarks including how much is invested in recreation, what’s the level of leisurely resources, how tasty is the food and how fine is the weather?

Please note that any state-by-state scorecard is a rough estimate of the ranking’s target. Results will suggest the winners and losers for a hypothetical but typical household.

Caveats noted, the study says fun-seekers looking to become ex-Californians should avoid Indiana, Alabama, West Virginia, Kansas and Kentucky.

Oh, and other popular spots that have been havens for Golden State departees?

Texas ranked No. 28 for fun, Arizona 12th, Nevada, eighth and Idaho seventh.

The details

Relocation is often more than a pragmatic hunt based on economic factors. So, the availability of recreational opportunities should be part of any search for a new hometown outside of California.

Let’s peek under the hood of these rankings to reveal some of the variances among the states when it comes to their “fun” factor.

Follow the money: To see where local cash flows to fun, we considered how much of household budgets go toward recreational goods and services. The biggest spenders, based on Bureau of Economic Analysis numbers, are in Utah, Washington and Alaska. Smallest expenditures? West Virginia, Mississippi, and New Mexico. California would rank 12th if it was included.

Staffing: Great recreational options require a significant workforce. States with the most folks employed in leisure and hospitality businesses, on a relative scale, are a solid hint of places where recreation is plentiful.

Federal job stats tell us the highest concentrations of workers providing fun are in Nevada, Hawaii and Wyoming. Fewest? Iowa, Minnesota and Washington. California would rank No. 23, in this math.

Natural environment: You’d like to live where pollution is low and nature is well-tended. US News & World Report has graded the states on their environmental qualities.

The best states were Hawaii, New York and Massachusetts. The worst were Indiana, Louisiana and Nevada. Surprisingly, California ranked a lowly 30th.

Weather: You need decent weather to enjoy most recreational activities. And most Californians are spoiled, weather-wise.

Using various sources for temperature, precipitation and severe weather, the spreadsheet found the best bets for a pleasant day were in Nevada, Utah and Arizona. The worst? Avoid Pennsylvania, New York and Indiana. California ranked seventh.

Best food: Dining is a key part of the “fun” quotient of any region. Combining three state rankings of “best food” by Far and Wide, TravelKatz, and Femanin served as the accounting of cuisine.

The composite top states for food were New York, Washington and Hawaii. Worst? North Dakota, Nebraska and Kansas. California would be No. 1 if it was ranked.

Parks: To measure the supply of outdoor alternatives, we gauged the share of state parklands to the overall geography with data from CLIQ Chair.

The states most-filled with parks were Alaska, New Jersey and Hawaii. Meanwhile, it’s hardest to find a park in Kansas, Nebraska and Mississippi. And California would rank third if included in these grades.

Serenity: Recreation lowers tension. So the calmest places must be fun, no?

Looking at the recent stress-by-state grading from WalletHub, the highest levels of tranquility were found in Minnesota, Utah and New Hampshire. The most anxious lived in Mississippi, Louisiana and New Mexico. California was the 22nd most-stressed state.

Another view: To make sure we’re not too far off, we also included a somewhat similar “fun states” tabulation by WalletHub.

The scorecard says a relocation targeting fun should consider Florida, Nevada and New York – and don’t even think about West Virginia, Mississippi or Delaware. By the way, those departing California are leaving the nation’s No. 1 state for fun, by WalletHub’s math.

The bottom line

The Golden State would have ranked No. 4 on my scorecard.

Just what is “fun” is also tricky to define. Warm weather is desirable – unless you crave winter activities. Is great food mostly fine cuisine or good local grub? And lots of recreational dollars can come in places overrun with tourists.

And how much should fun matter? Especially if financial pressure motivates a relocation.

Do not forget that no matter how fancy the math might be on this scorecard – or any other yardstick – the logic underneath a state-by-state grading can never work for every potential relocation. Each household has decidedly different needs and desires.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

The annual Milken Institute Best-Performing Cities Index ranks regions based on a series of criteria, assessing their “effectiveness at leveraging their resources to promote economic growth and provide their residents with access to the essential services and infrastructure needed for success.” Among the criteria are job creation, wage growth and the output of the high-tech sector, along with housing affordability and broadband access.

“This year’s report shows that U.S. cities continue to drive the nation’s growth despite the pressures created by COVID-19,” Maggie Switek, director of regional economics in the Milken Institute’s Research Department, said in a statement. “Three years after the onset of the pandemic, cities are still the main centers of the nation’s economic activity. In 2021, the metropolitan areas included in the BPC rankings generated 89% of the U.S. gross domestic product and were home to 86.3% of the country’s population.”

The report notes that the data reviewed for the rankings was primarily from 2021, a year in which many cities were beginning to bounce back from the COVID-19 lockdowns and restrictions of 2020.

Provo-Orem, Utah, was singled out for the strength of its five-year job and wage growth and a robust tech sector — as a home to “several well-established high-tech companies and numerous tech start-ups.”

Following Provo-Orem in the Institute’s top five were Austin-Round Rock, Texas; Raleigh-Cary, North Carolina; Nashville-Davidson-Murfreesboro-Franklin, Tennessee; and Boise City, Idaho.

Among smaller cities, the top five were Idaho Falls, Idaho; Logan, Utah; St. George, Utah; The Villages, Florida; and Bend-Redmond, Oregon.

The San Jose-Sunnyvale-Santa Clara area ranked 14th, the highest ranking for a California metros on teh 200-region “large cities” list,.

Next was the Inland Empire at No. 15. That was an improvement vs. No. 22 last year and No. 36 for 2020.

In fact, all six Southern California metro areas tracked had improved rankings this year. The others …

San Diego County: No. 38 this year vs. No. 42 last year and No. 49 for 2020.

Santa Maria-Santa Barbara: No. 49 this year vs. No. 57 last year and No. 75 for 2020.

Orange County: No. 56 this year vs. No. 69 last year and No. 61 for 2020.

Los Angeles County: No. 68 this year vs. No. 87 last year and No. 93 for 2020.

Ventura County: No. 79 this year vs. No. 159 last year and No. 138 for 2020. That was the first-largest improvement among the 200 largest metros.

According to the Milken Institute, the top-performing cities identified in the report had common characteristics including a growing high-tech sector, recovering leisure and hospitality industries and above-average broadband access.

The institute noted, however, that housing affordability continues to be a concern even in the highest-performing cities, suggesting that municipalities must work to increase the supply of affordable housing to attract “young generations of workers.”

Jonathan Lansner of the Southern California News Group added to this report.