January 2026
No issue defines the affordability challenge in California more than housing. The state’s infamously high housing prices have pushed many residents seeking to buy a home to what some consider to be “affordable” outlying locations far from jobs and services and often in areas of heightened climate risk.
Home purchases in these locations often force homebuyers into long and costly commutes and other daily car trips that worsen the state’s environment from the increased vehicle emissions.
As policy makers seek to stabilize housing prices and improve home ownership opportunities of all types by increasing supply, where are the best locations and optimal new construction housing types that will provide the least-cost and most affordable similarly situated homes for homebuyers? In general, will new single family detached housing development built beyond and away from existing urbanized and infrastructure service areas (ex-urban development) be more or less expensive for individual home buyers than new single family detached and attached development built within the existing city limits and urban areas (urban development)?
To address these questions, UC Berkeley Law’s Center for Law, Energy, and the Environment (CLEE), with support from The Nature Conservancy (TNC) and technical support from Economic & Planning Systems, Inc. (EPS), selected three case study geographies to assess the differences in the cost of home ownership in California based on location (urban areas with existing infrastructure services vs. exurban areas without) and product type (single-family detached home vs. single-family attached housing, with less indoor square footage but the same number of bedrooms and bathrooms).
The research team then used available data on the full costs of home ownership, including not just home price but transportation costs and annual “carrying” costs like taxes, utilities, and insurance. The team utilized data from three diverse but representative case studies: the City of Fresno and the surrounding county, Palmdale/Lancaster and surrounding areas in Los Angeles County, and the City of Beaumont and surrounding areas in Riverside County.
Based on the data, CLEE found the following:
- New single family attached homes in existing urban areas are roughly 30 percent less expensive in all-in annual home ownership costs than new single family detached homes in ex-urban areas.
- New single family attached homes in existing urban areas are roughly 18 percent less expensive based on all-in annual costs to homeowners than new single family detached homes in existing urban areas.
- Single family attached homes in existing urban areas therefore represent a less expensive for-sale home ownership option.
Based on these findings, policy makers wishing to expand the lowest-cost new home ownership opportunities should encourage attached single-family homes in urbanized areas instead of detached single-family home development outside of cities and in ex-urban areas. They could focus on policies and incentives to encourage developers to build the lowest-cost market-rate home ownership development. In addition, state policy could recognize that least-cost home ownership options must reflect all costs to homeowners and not just the cost of land, including home purchase costs and the annual costs of owning the home in urban or ex-urban areas.
Read the full report here: Affording the California Dream: Optimal Locations and Product Types to Increase Home Ownership Opportunities
Contact for more information: Ethan Elkind, elkind@berkeley.edu