Part of the American Dream is the opportunity to buy an affordable house in your community. Unfortunately, in California the median multiple is 5.1 times the median income in California; and 5.2 times in the Inland Empire, according to Wendell Cox, principal of Demographia.

"Land rationing and unaffordable housing on the West Coast has destroyed overall purchasing, but the rest of the country isn't so bad off," said Cox, who was the keynote speaker at the Building Industry (Baldy View Chapter) Housing Policy Conference held at the Double Tree Hotel in Ontario, Calif., on June 17.

"Housing costs in California are 2.5 times the national average. There's a terrible shortage and it's getting worse. Housing costs are through the roof. Fees and Environmental concerns and added fees on developers are further impediments to more housing. Ultimately that results in higher housing costs. An affordable house in Indianapolis may cost $125,000, but that house isn't available in San Bernardino at that price.

"There's a strong relationship between migration from California and affordability of housing," said Cox. "With the exception of a few states in the Midwest and New England, California is experiencing a net loss of its people. This is going to be a real problem for the state in the long run."

Current policies are skewed against home ownership in the Golden State, said Cox. Development needs to occur on the fringes of the cities, not in the urban core. Inclusionary zoning is not a solution.

"Things are likely to get worse," Cox predicts. "With a shortage of middle-income housing, people are moving away. We need to monitor housing affordability and understand the gravity of the issue. Having flexibility is crucial."