Orange County families and residents seeking pathways to homeownership are increasingly facing limited options, as condominium production in California has dramatically declined since the early 2000s. Condos, historically a more affordable entry point into the housing market, are now scarcely built in the Golden State, severely restricting access for those looking to buy a home.
Condominiums typically cost 15% to 30% less than single-family homes and are often located in urban areas near jobs and transit. This price difference could translate to significant savings on a down payment, an analysis by Zoocasa indicated. However, between 2011 and 2021, only 3% of all new multi-unit housing in California were condominiums, a stark contrast to comparable populations like Canada, where condos made up almost 40% of newly built multifamily housing during the same period.
Assemblymember Buffy Wicks (D-Oakland) described the lack of condo construction as "one of the elephants in the room of homeownership in California," noting that young families often lack a choice when seeking to buy a home. This shortage comes as California grapples with an unprecedented housing crisis, characterized by low homeownership rates and increasingly older first-time buyers.
Housing advocates and developers attribute the problem to a 2002 state law known as the Right to Repair Act. This law requires builders to repair construction defects or provide payouts for up to 10 years on condos, townhomes, and single-family homes. While designed to ensure safe construction and empower homeowners to demand repairs, housing experts say it has led to frequent and expensive litigation.
Such lawsuits are particularly common with condo buildings because homeowner associations can easily sue on behalf of all residents, industry experts noted. These cases, sometimes over minor or future issues, often do not conclude with the requested repairs. Muhammad Alameldin, director of growth for California YIMBY, a pro-housing policy group, stated, "We have a system that incentivized litigation." He added, "Get the lawyers out of it."
A 2024 study by UC Berkeley’s Terner Center for Housing Innovation found that California’s extended window for construction liability claims, coupled with loose parameters for what constitutes a defect, increased litigation. This, in turn, drove up insurance and building costs, creating "a significant disincentive for developers and contractors to build new condominiums."
An analysis from 2025 further revealed that multi-unit construction projects for sale, such as condos or townhomes, cost developers $8,000 to $18,000 more per unit than building rental units. This disparity was attributed to a "construction defect liability cost difference," encompassing higher insurance premiums, deductibles, and elevated rates from architecture and engineering firms.
In response, a growing coalition, including Habitat for Humanity, the city of Los Angeles, and the California Building Industry Assn., has sought to revive condo construction by reforming the 2002 law. The proposed reforms, aimed at establishing clearer guidelines around repairs and related litigation, were championed in AB 1903, a bill sponsored by Assemblymember Wicks and co-sponsored by Assemblymember Lori D. Wilson (D-Suisun City).
Assemblymember Wilson, who previously worked for a home builder, indicated she witnessed firsthand how litigation escalated costs for developers considering condo projects. She emphasized her desire to "reduce the barriers." However, despite broad support, AB 1903 did not come up for a final vote before the legislative session concluded last month.
The bill's failure represents a setback for proponents, though many remain committed to continuing their efforts. Assemblymember Wicks affirmed, "I have no doubt we can bring back something even stronger." While many California cities are building denser, multifamily housing, most new units are apartments, which fall under different liability laws and do not offer a path to homeownership—a long-standing key to building wealth in the U.S. High rents in some new developments can also make saving for a home challenging for renters.
Condos first gained popularity in California during the 1970s and 1980s as housing prices began to surge, offering an affordable alternative. By the turn of the millennium, they were once again a hot commodity until the 2002 liability law took effect. Since then, despite several changes in the housing market, condo projects have not rebounded.
Lawmakers emphasize that condos are a vital part of the housing stock and are critical for providing "a foot in the door for that first-time homebuyer." Assemblymember Wicks noted, "We just don’t have that for hundreds of thousands of people in the state right now," underscoring their importance as "a big part of the equation in our housing crisis."
While the proposed reforms faced some opposition from homeowner associations and consumer advocates, who argued changes could undermine "California’s longstanding commitment to safe housing," the push to modernize the 2002 law continues. Advocates maintain that new policies are necessary to foster homeownership where people want to live.
