California's New Home Growth Not Enough

According to the National Home Building Industry, the current supply of new homes in California is not enough. The industry is still trying to catch up to the deficit from the mid-90's when fewer housing permits were issued. The total building permits issued as of June, 2004 is the first time production has reached that level since 1989. Besides providing more home ownership opportunity, "a recent study determined that homebuilding generates approximately $60 billion a year to the California economy and creates an estimated 526,000 jobs statewide", according to this NHBI article. Other housing studies in recent months discuss that one of the reasons California's market is the one of the highest in the country is also due to the limited supply of housing in light of the current need. A lot of information about what created the housing demand is in this 44-page lengthy article (you get the main points by reading the first few pages) on the State of the Nation's Housing.