SACRAMENTO, CA — California’s condo market has shrunk to a sliver of new housing construction, and housing advocates say that leaves would-be buyers with fewer affordable paths to ownership. New condominium production has fallen sharply since the early 2000s, even as housing prices, vacancy pressure and the state’s shortage have kept homeownership out of reach for many residents.
Lawmakers and builders say the decline matters because condos have long sat between rentals and single-family homes. They are often cheaper than detached houses, and they are usually built in places where jobs and transit are already concentrated. A reform push aimed at reviving condo construction stalled this legislative session, though supporters say they intend to keep trying.
Why condos matter in California’s housing market
For decades, condominiums have been one of the more affordable ways to buy a home in the United States. In California, where affordability is one of the state’s biggest political and economic pressures, that role has become even more important.
Assemblymember Buffy Wicks, a Democrat from Oakland, said the lack of condo construction is one of the overlooked problems in the state’s housing debate. Between 2011 and 2021, just 3% of all new multi-unit housing in California was condominiums, according to the numbers cited by advocates. By comparison, Canada built condos at a far higher share of multifamily housing during the same period.
Those numbers help explain why the issue has drawn attention from cities, nonprofits and developers looking for more ownership options.
The 2002 law advocates blame for the slowdown
Supporters of reform trace much of the slowdown to a state construction defect liability law adopted in 2002. The law requires builders to repair or pay for defective construction for up to 10 years on condos, townhomes and single-family homes.
In theory, the statute was meant to standardize how defects are handled and give homeowners a way to demand repairs. In practice, housing experts say it has fueled frequent and costly litigation, especially for condo buildings where homeowners associations can sue on behalf of all residents.
Advocates say the legal process can drag in disputes over minor or non-structural problems, or even issues that might never develop. They argue that uncertainty around lawsuits has become a major drag on new condo projects.
What studies say about costs, insurance and development
A 2024 study from UC Berkeley’s Terner Center for Housing Innovation found that California’s long window for claims, along with broad definitions of what counts as a defect, helped increase litigation and pushed up insurance and construction costs. The researchers said that created a strong deterrent for developers and contractors considering new condominiums.
A separate 2025 analysis found that multi-unit for-sale projects, such as condos and townhomes, can cost developers $8,000 to $18,000 more per unit than rental projects. The study tied that difference to insurance premiums, deductibles, quality-assurance reviews, and higher rates charged by architecture and engineering firms.
That cost gap matters because condos are often sold in dense urban neighborhoods where land is expensive and buyers are looking for a lower-priced entry point.
AB 1903 dies before a final vote
Wicks sponsored AB 1903, a bill designed to narrow the legal exposure that housing advocates say discourages condo construction. The measure had backing from Habitat for Humanity, the city of Los Angeles and the California Building Industry Association.
Even with that coalition, the bill never reached the final vote it needed before the legislative session ended last month. Its collapse was a setback for supporters who had spent months trying to modernize the Right to Repair Act, the 2002 law at the center of the debate.
Wicks said on social media that California needs to update laws that are no longer producing the results they were meant to deliver. After the bill died, she said supporters could return with something even stronger.
Supporters say condos should be part of the fix
Advocates do not describe condos as a cure-all for California’s housing shortage. But they argue the state cannot afford to ignore them, especially as homeownership rates remain low and first-time buyers are older than in past generations.
Wicks called condos a key way to give people “a foot in the door” and said they remain an important part of the broader housing mix. Assemblymember Lori D. Wilson, a Democrat from Suisun City and co-sponsor of the bill, said her experience in homebuilding showed her how defect lawsuits raise development costs and discourage projects.
Wilson said the goal is to reduce barriers without stripping homeowners of their ability to seek repairs or sue. Alameldin of California YIMBY said the effort is likely to continue for years.
Apartments are filling the gap, but they do not build ownership
California cities have added dense housing in recent years, but much of it has been rental apartments rather than for-sale condominiums. That has helped increase supply, yet it has not created the same path to building wealth through ownership that condos can provide.
Advocates say many of the newest apartment projects also come with high rents, making it harder for tenants to save for a down payment. Alameldin said buyers should not have to inherit a home or move far from jobs just to own one.
For now, condo supporters say the state still needs a legal framework that encourages builders to take the risk of creating smaller, for-sale homes in the places Californians most want to live.
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