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Housing is now unaffordable in many rural parts of California too

A site that was proposed for new affordable housing units in Huntington Beach. Ashley Bailey/KPCC

People fleeing big coastal cities like L.A. and San Francisco in search of more affordable housing inland could be in for sticker shock.

A new report released Tuesday reveals that inland, rural parts of California are increasingly unaffordable too.

"That came as a big surprise because historically we have thought of the housing problem as being a focus in larger cities, but we found every city has this problem," said Jonathan Woetzel, director of the McKinsey Global Institute and a co-author of the study.

Woetzel found it is nearly as expensive to live in Watsonville, a small farming community in Santa Cruz county, as it is in Los Angeles. Fifty-seven percent of households in the rural area of Santa Cruz-Watsonville are unable to afford the cost of housing.

In Salinas and Clearlake, which are also rural areas, 50 percent can't afford the housing. (The study used the U.S. Department of Housing and Urban Development's threshold to determine what is considered unaffordable. It is defined as when a household spends more than 30 percent of its pretax income on housing.)

"We're seeing that the affordability problem doesn't really change when we move around the state," said Woetzel. "It's now a whole state problem that requires a whole state solution."

Woetzel says one solution would be to simply build housing on the many vacant lots that are already zoned for new construction.

McKinsey estimates Los Angeles County has between 5,600 to 8,900 vacant parcels zoned for multifamily development, which could accommodate 32,000 to 75,000 new housing units. That would increase Los Angeles County’s housing stock up to 2.3 percent.

"The good news is that we can close the gap," said Woetzel. "We have the land."

Full report