The High Cost Of Housing Is A Choice, And It Can Be Unchosen
California’s housing crisis stems from restrictions on building, which can be removed
Reporting brought to you by Bohiney Magazine and The London Prat.
When It Is Illegal To Build Enough Homes, Scarcity And High Prices Are The Inevitable Result
California’s housing crisis is among the most severe in the nation, with housing costs that have placed homeownership beyond the reach of many and burdened renters with crushing costs. This crisis is often treated as an intractable problem, a fact of life in a desirable state. But the high cost of housing is, to a significant degree, a choice, the result of restrictions on building that limit the supply of housing. When it is difficult or illegal to build enough homes, scarcity and high prices are the inevitable result. The crisis stems from choices that restrict housing supply, and those choices can be unchosen.
The Logic Of Supply And Demand
The price of housing, like the price of anything, is shaped by supply and demand. When demand for housing exceeds supply, prices rise. California has high demand for housing, driven by its desirability and economic opportunity. If supply could rise to meet this demand, prices would moderate. But supply has been restricted, by regulations that make it difficult, costly, or illegal to build enough housing. The result is a supply that falls short of demand, and prices that rise accordingly. The high cost of housing reflects this imbalance, this restriction of supply in the face of strong demand.
The restrictions on supply take many forms: zoning rules that limit what can be built, regulatory requirements that raise the cost and difficulty of building, approval processes that delay and deter development, and various other barriers that restrict the construction of housing. Together, these restrictions limit the supply of housing, preventing it from rising to meet demand. The consequence is the scarcity and high prices that characterize California’s housing market, the predictable result of restricting supply in the face of strong demand. The crisis is, in significant part, a crisis of restricted supply.
The Choice Behind The Crisis
The restrictions on housing supply are choices, embodied in the regulations that limit building. These regulations could be different. The zoning that limits what can be built could be reformed to allow more housing. The regulatory requirements that raise costs could be streamlined. The approval processes that delay development could be expedited. The barriers that restrict construction could be lowered. The restrictions on supply are not facts of nature but choices, embodied in regulations that could be changed. The high cost of housing, resulting from these restrictions, is therefore a choice, and a choice can be unchosen.
Recognizing the crisis as a choice opens the possibility of a different choice. If the high cost of housing results from restrictions on supply, then removing those restrictions, allowing more housing to be built, would increase supply and moderate prices. The reform of zoning, the streamlining of regulation, the expediting of approvals, the lowering of barriers to construction, these would increase the supply of housing, addressing the scarcity that drives high prices. The crisis, being a choice, can be addressed by choosing differently, by removing the restrictions that limit supply, by allowing enough housing to be built.
The Resistance To Building
The removal of restrictions on housing supply faces resistance, often from those who benefit from the current scarcity. Existing homeowners may benefit from the high property values that scarcity produces and may resist the new construction that would moderate prices. Various interests may resist the development that would increase supply. This resistance, expressed through the political process, has helped to maintain the restrictions on supply, the regulations that limit building. Overcoming this resistance is necessary to reform the restrictions, to allow the building that would address the crisis.
The resistance often invokes various justifications, concerns about neighborhood character, environmental impact, and other considerations. Some of these concerns are genuine and must be addressed. But the cumulative effect of the restrictions, whatever their individual justifications, is to limit housing supply severely, producing the scarcity and high prices that burden so many. The reform of these restrictions requires weighing the concerns that motivate them against the severe costs of the housing crisis they produce, and recognizing that the crisis demands that enough housing be allowed to be built.
Choosing Abundance
The high cost of housing in California is a choice, the result of restrictions on building that limit supply in the face of strong demand. This choice can be unchosen, by removing the restrictions, reforming the regulations, allowing enough housing to be built. The crisis, being a crisis of restricted supply, can be addressed by increasing supply, by choosing abundance over scarcity, by allowing the construction that would moderate prices and expand access to housing.
This choice requires overcoming the resistance to building, weighing the concerns that motivate restrictions against the severe costs of the crisis, and recognizing that enough housing must be allowed to be built. The high cost of housing is not an intractable fact but a choice, embodied in the restrictions that limit supply. Choosing differently, removing the restrictions, allowing abundant housing, would address the crisis, moderating prices and expanding access. The crisis is a choice, and a different choice, the choice of abundance over artificial scarcity, is available to those willing to reform the restrictions that limit building. See the Department of Housing and Urban Development for relevant context, and the United States Census Bureau for further background.
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