Can California Realtors Tackle a Housing Shortage, Rising Prices and Inequality?

By Lucas Smith | June 15, 2021

Dave Walsh bought his first property in 1980, a modest three-bedroom house in San Jose for $67,500.

Decades later, Walsh has climbed up the property and career ladders. That modest home he used to own is worth $1.2 million, and Walsh now serves as president of the California Association of Realtors.

It’s a pivotal time for his industry. The median price of a single family home in California climbed to a record $814,000 in April, and the housing shortage and rising prices show little signs of slowing down. Building permits have declined for several years, and construction is growing more expensive.

The market looks unlike anything Walsh has seen in his 41 years as an agent. “This is truly a crisis level,” said Walsh, who will serve as CAR president through December. “How do we ever stop this?”

Walsh has been active in efforts to reform building codes to boost housing development and fair housing policies. Yet challenges persist beyond housing production.

Walsh has also set a goal for the statewide association to push for more fair housing rules to correct past legislative efforts that limited home-buying opportunities for people of color. “California has an issue we need to work with,” he said.

This interview has been lightly edited for length and clarity.

Q: You got your real estate license in 1980. How has the California market changed?

A: I used to believe that I could get anybody a house, because I was good at what I did and I knew the marketplace.

I knew financing well. And I can help people connect with the right type of financing for their particular financial situation. And I knew the marketplaces that were up and coming. And it may not be the perfect neighborhood today. But it was becoming an emerging neighborhood.

Today, quite frankly, I can’t say that same thing. It’s hard to get anybody a house. I feel like the market has shifted so dramatically for buyers.

Q: What’s happened between 1980 and 2021?

A: We stopped building enough housing way back in 2005. From that point on, we have not built anywhere near enough to keep up with the housing demand in California.  And by the way, the last five years, for every consecutive year, we’ve built less each year. So even in the midst of this crisis, we’re still just not building enough housing. What you have is properties’ (prices) escalating so fast, that we just can’t keep up.

That drives drives the middle class out and allows “the haves” to have more and “the have nots” to have less.

Q: What about the argument from slow-growth community members and property owners that the solution is to move jobs away from Silicon Valley and out of California? That’s a pretty strong sentiment in the suburbs.

A: I hear that argument all the time. The (property owners) want to retain their quality of life without any kind of density increases. And their proposed solution is, ‘Let’s just simply put the jobs in Stockton. Let’s put them in Modesto. Let’s put them in the Central Valley. ‘

It’s easy to say that, ‘let’s put the job someplace else,’ and people will go there. Well, maybe they will, maybe they won’t. I’m not worried about (Tesla CEO) Elon Musk leaving California. I’m worried about the next Elon Musk leaving California, whoever that might be.

Q: What response do you get from Sacramento?

A: I have regular conversations with our elected officials at the federal level, as well as the state level, and they all know we have a huge housing crisis.

The housing bills that are going to make it through must contain a component of union labor. Well, union labor adds (cost). And I’m not anti-union, I’m just pro housing. I want us to figure out ways to develop affordable housing. And when you start adding entitlement costs, and union labor costs, and CEQA (California Environmental Quality Act) litigation costs to any kind of housing, all of a sudden, it’s a fallacy to call it affordable. It’s just not affordable in California anymore.

Q: What is the what are some of the major goals that you have for this year as president of the California Association of Realtors?

A: I have been very singularly focused on fair housing. There’s a great book, (The Color of Law) by Richard Rothstein. I read that book … and that changed my entire focus on housing in California.

We have a huge challenge to help people of color get involved with housing in California. (Earlier generations of Realtors) have not been the biggest supporters of this in the past. We were involved with helping create legislation or at least supporting legislation that made it difficult for people of color to acquire housing. And we supported (what) ultimately ended up being redlining. At the end of the day, we were roadblocks to people of color.

So it’s my goal, and it’s my in my leadership team’s focus this year, to make concrete steps towards improving fair housing opportunities for people of color in the state.

Five Things

1. Walsh is an avid traveler to Europe, enjoying visits to England where he has family. “I could live in London in a heartbeat,” he said.

2. At one time, he held the record for most expensive home sale in Los Gatos, a $12 million mansion.

3. Walsh was born in Toronto. His father moved the family to Sunnyvale in 1959 to take a job as an engineer at Fairchild Semiconductor.

4. He sold his first house in San Jose to friends — a young house painter and his wife, an elementary school teacher. A young couple today with similar careers, he said, couldn’t buy a similar house without financial aid from their parents.

5. “I eat, sleep and drink real estate,” he said.

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