Why California’s Housing Crisis Is a Government-Made Disaster
Zoning laws, environmental review, and building codes have made housing construction nearly impossible
The Permitted Shortage
SAN FRANCISCO — California has a housing shortage of an estimated 3.5 million units, according to the McKinsey Global Institute, in a state with the resources, the climate, and the land to house its population adequately. The shortage is not natural. It was constructed, deliberately and incrementally, through zoning decisions, environmental review requirements, and building codes that make new housing construction slow, expensive, and frequently impossible in the places people want to live.
The primary mechanism is single-family zoning: the restriction of most residential land to detached single-family homes, which are the least efficient use of urban land and the housing form with the highest per-unit cost. Roughly 75 percent of residentially zoned land in major California cities is reserved for single-family homes. This is a policy choice. It produces the housing shortage. The shortage produces the housing costs. The costs produce the homelessness, the displacement, and the economic exclusion that California politicians regularly declaim against while defending the zoning that produces them.
The CEQA Problem
The California Environmental Quality Act requires environmental review for housing projects — including urban infill housing in already-developed areas, where the environmental impact of new housing is minimal. CEQA review adds an average of 2.5 years and $100,000+ in costs per project in urban areas. It is routinely weaponised by NIMBY groups to block housing they oppose on grounds that have nothing to do with environmental protection. California’s legislature has carved out some exemptions. The fundamental problem — a law designed for industrial projects applied to urban housing — remains.
What Has Worked
Several California cities that have liberalised zoning and streamlined permitting have seen increased housing production. Minneapolis eliminated single-family-only zoning statewide in 2020 and has seen measurable rent moderation. Tokyo, which allows dense construction throughout its metropolitan area, has maintained relatively stable housing costs despite a large and growing population. The Reason Foundation’s California housing analysis documents the policy origins of the shortage. The shortage is a choice. It can be unchoiced. The political economy of doing so involves overcoming the preferences of existing homeowners whose property values depend on the restriction. That is an honest description of the obstacle.
SOURCE: https://bohiney.com
