There’s much to love about California: the sunshine, breathtaking beaches, high-quality colleges and universities, and the incredible cultural diversity, to name just a few. It’s no surprise then that living in the Golden State is so expensive.
California routinely ranks among the states with the highest home prices. According to Trulia.com, an online real estate resource that compiles data about home prices, the average listing price for a home in California for the week ending January 18 was $625,472, and the median sales price in California from October 2016 to January 2017 was $428,000. Only Hawaii and the District of Columbia had higher home prices over the same period.
These extremely high home prices are strangling many middle- and lower-income families. According to a study by the McKinsey Global Institute, “Fifty percent of California’s households cannot afford the cost of housing in their local market. Virtually none of California’s low-income and very-low-income households can afford the local cost of housing.”
While much of the costs can be attributed to high demand, the supply of houses in California is much lower than the national average, causing prices to remain higher than in most other states. A study by McKinsey reports there are only 358 housing units per 1,000 people in California, significantly lower the national average of 436. Only Utah ranked lower than California in the study.
There are a variety of reasons for the housing supply shortage, but one of the key driving factors behind the unaffordable housing problem in state is the incredible power wielded by anti-development environmentalists, who are empowered by state and local laws that make it difficult to build new housing developments.
According to an article examining California housing development laws in the Wall Street Journal, “Environmental reviews intended to preserve California’s picturesque coastline and hillsides also provide a means for residents to challenge ordinary development proposals. If a review finds adverse impacts on parking, traffic, noise or air quality, elected officials can’t approve it until they have addressed opponents’ concerns. Even after a project is approved, opponents can file environmental challenges.”
Those “challenges” cited by the Journal halt many developments for up to four years, driving up housing costs significantly and limiting housing availability. As the Journal also reports, law firm Holland & Knight “found more than 14,000 new housing units were the target of such lawsuits” from 2013 to 2015.
The ease with which environmentalists can stop housing developments is a direct result of the numerous local and state laws that favor environmental concerns over affordable housing. The California Democratic Party, which holds supermajorities in both houses of the California state Legislature and the governorship, states plainly in its party platform it supports “land use planning” and “local governments and regions … completing voluntary, sub-regional comprehensive planning processes that stem the tide of urban and suburban sprawl” — and by “sprawl,” they mean new housing developments.
Protecting the environment is an important goal all communities should work toward, but the local and state rules, regulations and laws in California are heavily skewed in favor of environmental concerns, leaving tens of millions of people without access to high-quality affordable housing.
Local and state government lawmakers should work together to help developers expedite housing developments in areas experiencing housing shortages, especially in highly populated parts of Southern California and in the San Francisco Bay Area, where housing prices are some of the highest in the world.
Failure to reform these costly rules and regulations will only sustain the government-created housing shortage in the state, continuing California’s legacy of failing to provide its citizens with laws that encourage economic growth and access to affordable housing.
Justin Haskins (jhaskins@heartland.org) is executive editor of The Heartland Institute and editor-in-chief of the New Revere Daily Press.
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