Restoring The California Dream, Not Nailing Its Coffin
12th February 2019
Joel Kotkin points out how California is doing it wrong.
Newsom has promised to have 3.5 million homes built over the next seven years to solve the problem. That is, conservatively stated, more than 2.6 million that would be built at the current rate of construction.
This effort is doomed, though, since it fails to address the fundamental cause: regulations that block expansion of housing on the urban fringe, a housing area that serves to lower the price of both urban and suburban land. NIMBYs, who often block new projects, may contribute to the shortage, but by far the biggest problem lies in regulations, many issued from Sacramento, restricting lower-density housing construction on the urban fringe.
Former World Bank principal urban planner Alain Bertaud has pointed out that these regulations raise land prices and exacerbate housing shortages that particularly affect the poor. Before such policies were adopted, California’s housing prices relative to incomes were not far above the national average, even though the state’s population was expanding far more rapidly than today.