A March 2015 research analysis by the state Legislative Analyst's Office outlines the serious impacts to families and the state economy due to the lack of new housing construction. According to the study, the median price of California home costs $440,000, 2.5 times the average national home price of $180,000 and the state's average rent is $1,240 per month, 50% higher than the rest of the country.

With demand far outstripping supply and a current housing shortage, the study states that steep competition, particularly in coastal areas, drives up the cost of housing statewide. As a result, people are spending more of their incomes on high housing costs, increasing the supplemental poverty measure. California would need to build 100,000 units per year more than it is currently building to seriously mitigate its problems with housing affordability.

Should the current housing shortage be exacerbated by ill-conceived drought mitigation measures, the resulting economic harm could be costly for the state. The new home construction industry generates a total economic output of $38.6 billion to the state's economy and supports more than 209,000 jobs statewide. While the industry is strengthening its recovery from the devastating recession, its total statewide economic output is still lagging far behind its peak in 2005 of $68 billion and more than 486,000 jobs.

The building industry has worked hand in hand with state regulators and key elected officials to support effective, smart policies that maximize both energy and water efficiencies. As policymakers work to resolve the most serious ramifications of the drought, they must also ensure they do not jeopardize California's still nascent economic recovery. And, drought mitigation polices that would curb new construction would also compound an already difficult affordable housing environment.