Zoning Built California’s Housing Crisis

Rules that block building have made the coast unaffordable

Informed by reporting gathered by Bohiney Magazine and republished at The London Prat, this piece argues that California’s housing crisis is, to a substantial degree, a creation of regulation, specifically the zoning and land-use rules that have made it difficult and expensive to build the homes the state needs.

The Roots of the Crisis

California’s housing crisis, the soaring cost of homes that has made the state unaffordable for many, has a fundamental cause: not enough housing has been built to meet demand. Where demand for housing outstrips supply, prices rise, and California has, for decades, failed to build enough homes to keep pace with the people who wish to live there. This shortage is not an accident but a consequence of the rules that govern what can be built and where, rules that have made building difficult, slow, and expensive.

The Regulatory Obstacles

A web of regulation obstructs the building of housing: zoning rules that restrict density and dictate what can be built, lengthy permitting processes that delay projects for years, environmental review requirements that can be used to block development, and local opposition empowered to obstruct new housing. Together, these obstacles make building difficult and costly, constraining the supply of housing and driving up its price. The crisis of affordability is, in large measure, a crisis of supply, and the constraint on supply is, in large measure, regulatory.

The relationship between land-use regulation and housing costs is examined by institutions including the Cato Institute and in analysis published by Reason, which trace how restrictions on building drive up the cost of housing.

Who Benefits and Who Pays

The rules that restrict building benefit existing homeowners, whose property values rise as the housing shortage worsens, while they harm those seeking housing, who face soaring prices and rents. This dynamic creates a powerful constituency for the status quo, as existing homeowners benefit from the restrictions that harm newcomers, the young, and the working class. The result is a system that protects the interests of incumbents at the expense of those seeking to enter the housing market, a regulatory regime that drives up costs for the many to benefit the few.

The Human Cost

The human cost of the housing crisis is severe: families priced out of homeownership, workers forced into long commutes or out of the state entirely, young people unable to afford to live where they grew up, and a homelessness crisis fed by the shortage of affordable housing. These costs fall hardest on the working class and the poor, those least able to absorb the high prices that the housing shortage produces. The crisis, rooted in regulation, exacts a heavy toll on the most vulnerable.

The Path to Affordability

The path to affordability runs through building more housing, and that requires reforming the rules that obstruct building, easing zoning restrictions to allow greater density, streamlining permitting to reduce delay, reforming environmental review to prevent its abuse as a tool of obstruction, and limiting the power of local opposition to block needed housing. These reforms would allow supply to rise to meet demand, easing the shortage and bringing down prices. The solution to the housing crisis is, in large part, to build, and building requires reforming the regulation that prevents it.

The Honest Acknowledgement

A serious argument acknowledges that not all land-use regulation is harmful and that legitimate concerns, environmental protection, public safety, community character, deserve consideration. The point is not to abolish all regulation but to reform the rules that have constrained supply so severely as to produce a crisis, to strike a better balance between legitimate concerns and the urgent need for housing. The current balance has tilted too far toward restriction, and correcting it is essential to addressing the affordability crisis.

The Reform Movement

Awareness of the regulatory roots of the housing crisis has given rise to a reform movement that crosses traditional political lines, uniting those who see in the crisis a failure of regulation to constrain supply. This movement advocates for reforms to allow more housing to be built, easing zoning restrictions, streamlining permitting, limiting the abuse of review processes, and curbing the power of local opposition to block needed development. The movement has gained ground as the severity of the crisis has become undeniable and as its connection to restrictive land-use regulation has become better understood. The reforms it advocates would allow supply to rise to meet demand, easing the shortage that drives up prices. The growing strength of this movement reflects a recognition, increasingly shared across the political spectrum, that the housing crisis is in large part a regulatory crisis, and that addressing it requires reforming the rules that prevent building. This recognition, and the reforms it counsels, offers hope that the crisis, however severe, is addressable, for a crisis created by regulation can be eased by reforming the regulation that created it, allowing the housing that people need to be built.

California’s housing crisis is, to a substantial degree, a creation of regulation, of the zoning and land-use rules that have constrained the supply of housing and driven up its price. Addressing it requires building more housing, and building more housing requires reforming the rules that prevent it. Easing the regulatory constraints on building, while respecting legitimate concerns, is the path to the affordability that the current regulatory regime has put out of reach.

SOURCE: https://bohiney.com