The Solution to California’s Housing Problems Isn’t Densify, Densify, Densify
A Collective Disaster
The Palisades and Eaton fires represent thousands of personal tragedies, but they also constitute a collective disaster, adding new housing shortages to California’s already massive shortfall — a catastrophe that stems not from acts of nature but from human policy blunders.
A State of Crisis
Gov. Gavin Newsom bought a new $9-million house in November, but too many of his fellow Californians may never own a home or find an affordable rental. Under Newsom, the state has tried reforms designed to increase building and affordability, but precious little has changed.
Home Prices and Homeownership
Home prices in coastal California are nearly 400% above the national average, and statewide, the median cost of a home is 2.5 times higher than in the rest of country. California has the second-lowest homeownership rate in the nation, 56% (New York’s is lowest, 54%).
Renting: A Growing Concern
As for renting, the average cost of a two-bedroom apartment in Los Angeles is just shy of $3,000 a month, according to apartments.com, about $1,000 more than the national average.
The Root of the Problem
The state’s housing crisis has its roots in excessive construction regulations and litigation aimed at developers — for decades, too few residential units were built. Unfortunately, the cure Sacramento is pushing — policies that favor dense, apartment development near transit corridors in the state’s biggest cities — isn’t helping.
Forced Densification
For starters, high-density "infill" construction in cities — some call it YIMBY ("yes in my backyard") development — is costly. City land is expensive, materials costs are high, "prevailing wage" labor rates and onerous permitting, zoning, and planning processes and fees add to the bottom line. New multistory apartment buildings packed in along Sunset Boulevard or the Wilshire corridor may add to L.A.’s total housing stock, but even when affordable rental units are required in these buildings, the trickle-down benefit is minimal.
What’s Wrong with Forced Densification
As UCLA and London School of Economics professor Michael Storper’s research shows, forced densification is a "blunt instrument" that brings little in the way of substantial cost savings for housing.
What Californians Want
Renting and high-density living is also out of sync with what most people in California want. A recent Public Policy Institute of California survey found that 70% of the state’s adults preferred single-family residences. Not surprisingly, a large majority of Californians, according to a poll by former Obama campaign pollster David Binder, opposed legislation signed by Newsom in 2021 that in effect banned single-family zoning in much of the state. (The law, Senate Bill 9, was overturned in L.A. County court last year, and that ruling is on appeal.)
Climate Goals
Climate goals have been a big part of the reason California policies favor multistory, multiunit new construction in cities. The idea is that housing more people in, say, taller buildings will be more energy efficient. And encouraging dense developments near transit is supposed to lower greenhouse gas emissions. But new studies show that the size of buildings doesn’t necessarily correlate with more sustainability, and many Californians are choosing to endure longer and longer commutes to buy a home rather than rent in town. Or leaving altogether.
What Can Be Done
What should the state do?
Streamline Permitting and Regulation
Some may wish that we could subsidize an expansion of public housing, adding more projects such as the ambitious renewal of Jordan Downs in South L.A., but this will be difficult in a nearly broke city and a state with budget problems as well, and again it won’t match the aspirations of most Californians.
Encourage Market-Driven Projects
One way out of this crisis would be to expand the streamlined permitting and regulatory processes that Newsom and local leaders are fast-tracking for fire reconstruction, incentivizing rather than punishing townhome and single-family home construction. Instead of laws all but mandating high-density units, usually rentals, in the state’s biggest metros, Sacramento needs to encourage market-driven projects based on consumer preferences.
Peripheral Development and Remote Work
Peripheral development, away from the high-cost coast, could open opportunities for first-time home buyers. The state could take advantage of technological trends — remote work, for example — to allow for more population dispersion. Master planned communities in inland Southern California or the Central Valley, with local employers, can be part of the solution.
Conclusion
California’s mounting housing problem requires more alternatives, especially for people seeking lower rents and affordable single-family houses. If the state wants to maintain its upwardly mobile chops, it must refashion its housing policies.
FAQs
- What is the root of California’s housing crisis?
The state’s housing crisis stems from excessive construction regulations and litigation aimed at developers, leading to too few residential units being built. - What is the solution to California’s housing crisis?
Streamlining permitting and regulation, incentivizing market-driven projects, and peripheral development are all potential solutions. - What do Californians want in terms of housing?
The majority of Californians prefer single-family residences, not high-density living. - What are the challenges with forced densification?
Forced densification is a "blunt instrument" that brings little in the way of substantial cost savings for housing, and it is out of sync with what most people in California want.
