*The California condo is dying. Why it’s making the housing crisis worse*
September 11, 2026
For decades, condominiums have been one of the most affordable pathways to
becoming a homeowner in the United States.
But in California — where housing affordability remains a top concern for
residents
—
condo production has fallen off dramatically since the early 2000s,
severely limiting access to this entry-level market for homeownership.
“We’re just not building them,” state Assemblymember Buffy Wicks
(D-Oakland) said of condos. “It’s one of the elephants in the room of
homeownership in California. … You kind of don’t have a choice if you’re a
young family looking [to buy] a house.”
Between 2011 and 2021, just 3% of all new multi-unit housing in California
was condominiums. In Canada, which has a comparable population to the
Golden State, condos made up almost 40% of newly built multifamily housing
during that decade.
Condos are typically located in urban areas near jobs and mass transit, and
cost about 15% to 30% less than single-family homes — a difference that
could save buyers almost $100,000 on a down payment in some parts of
California, such as the Bay Area, according to an analysis by Zoocasa
.
And now, there’s a growing coalition trying to revive condo construction in
California by reforming a decades-old law that housing advocates and
developers say has put a stranglehold on condo development.
Why condo building slowed to a crawl
They date the problem back to 2002, when a new state law required builders
to repair, or provide payouts for, defective construction for up to 10
years on condos, townhomes and single-family homes. In theory, this
construction defect liability law standardized the process to ensure that
homes are built safely, giving homeowners the power to demand repairs and
builders the opportunity to make them.
In actuality, housing experts say, it has led to frequent and often
expensive litigation, which might not end with requested repairs. Such
lawsuits are most common with condo buildings because homeowner
associations can easily sue on behalf of all residents, industry experts
say, making for extensive cases, sometimes over minor, non-structural
issues, or even unrealized future problems
.
“We have a system that incentivized litigation,” said Muhammad Alameldin,
director of growth for California YIMBY, a pro-housing policy group. “We
want a system where [if] you have a defect, you can get it repaired
immediately. It shouldn’t go to the courtroom. Get the lawyers out of it.”
Alameldin has been part of an effort aimed at reforming that 2002 law, with
the hope that clearer guardrails around repairs and related litigation will
help encourage condo development.
But despite broad support — including the Habitat for Humanity, the city of
Los Angeles and the California Building Industry Assn. — the bill that
would have cemented those reforms never came up for the final vote it
needed before the legislative session ended last month.
It’s a major blow for lawmakers and advocates who have focused on this
issue, but most are adamant that this won’t be the end of the effort.
“Housing policy is rarely simple. But if we want more Californians to have
a shot at owning a home, we have to be willing to modernize laws that are
no longer producing the outcomes they were intended to achieve,” Wicks
wrote in a post on social media
about the bill
she sponsored, AB 1903 .
“I have no doubt we can bring back something even stronger,” she said after
the bill died .
Although many cities across California are building denser, multifamily
housing complexes, most are apartments, which are covered by different
construction liability laws. These for-rent units still provide much-needed
housing but offer no pathway toward homeownership — long considered
key to building
wealth in the U.S
.
In fact, high rents in some of these new developments, often branded as luxury
apartments
,
can make it difficult for renters to save for a home.
“You shouldn’t have to … inherit a home or live an hour and half away from
a city” to own a home, Alameldin said. “We have to build homes where people
want to live.”
The condo boom — then bust
Condos in California really began to boom for the first time in the 1970s,
when housing prices began to rise sharply.
Sticker shock left many moderate-income buyers — especially in pricier,
urban areas — more open to buying in multi-unit or high-rise buildings, a
trend that has often continued to play out when housing prices have
skyrocketed.
Some condos were conversions of existing apartment buildings, but a
building boom brought many new units onto the market by the1980s, when one
real estate agent told the The Times
that
condos “are really the only affordable housing choice left out here.”
Despite several changes in the housing market, by the turn of the
millennium, condos were once again hot
—
but then the 2002 liability law went into effect, followed by the housing
bust and the Great Recession.
When housing construction began to pick back up in the 2010s, condo
projects in California never bounced back, according to data from a 2024
study
by
UC Berkeley’s Terner Center for Housing Innovation.
The study found that California’s long window for construction liability
claims, along with loose parameters for what constitutes a defect, led to
an increase in such litigation, which ultimately drove up insurance and
building costs. Together, that created “a significant disincentive for
developers and contractors to build new condominiums,” the study found.
Can condos be part of a housing solution?
As California grapples with an unprecedented housing crisis — including
some of the lowest homeownership rates in the nation, and increasingly
older first-time buyers
—
lawmakers say condos cannot be ignored.
“Condos are such an important part of the housing stock,” Wicks said,
calling them key to providing “a foot in the door for that first-time
homebuyer.”
“We just don’t have that for hundreds of thousands of people in the state
right now,” she said.
Wicks understands condos aren’t the only type of housing the state needs —
or even what all Californians want — but she said the multi-unit, for-sale
buildings deserve the attention of state leaders.
“It’s part of the overall solution,” Wicks said of condos. She called them
“a big part of the equation in our housing crisis.”
Assemblymember Lori D. Wilson (D-Suisun City), who co-sponsored the
construction liability reform legislation with Wicks, worked for a home
builder before joining the Legislature and said she saw firsthand how such
litigation drove up costs for developers considering condo construction.
“When I came to the Assembly, that was something I wanted to focus on,”
Wilson said. “I want to reduce the barriers.”
A 2025 analysis
looking
at California’s construction defect liability law found that multi-unit
construction projects for sale, such as for condos or townhomes, cost
developers significantly more than building rental units — from $8,000 to
$18,000 more per unit. The study attributed that disparity to a “variety of
interrelated factors, including insurance premiums, deductibles, peer
review quality assurance costs, escalated rates charged by architecture and
engineering firms,” making up what the authors called the “construction
defect liability cost difference.”
The proposed reforms did face some fierce opposition from homeowner
associations and consumer advocates, who argued that such changes to the
2002 law, known as the Right to Repair Act, “undermines California’s
longstanding commitment to safe housing” and shifts the onus of safe
construction from builders to homeowners, according to a Senate analysis of
the bill.
But Wilson said they were careful to ensure that changes wouldn’t take away
homeowners’ right to demand fixes or their ability to sue, but narrowed the
parameters for both.
“This is going to be a multi-year effort,” said Alameldin, who helped
author the bill. “We’ll keep pushing every year until people are
incentivized to build more condos and small units for homeownership.”
The post The California condo is dying. Why it’s making the housing crisis
worse
appeared
first on Los Angeles Times .
