California Government is the Reason for California’s Housing Shortage

The homebuilder Lennar has new affordable homes for sale in San Antonio, Texas with nine different floor plans to choose from at a variety of price points – starting in the $130,000s.

Thank you for reading this post, don't forget to subscribe!

In California, permits and development fees often total more than $130,000 before ground is even broken. A report published by UC Berkeley found that development fees can compromise up to 18% of the cost of a new home. In many jurisdictions, developers pay as much as $157,000 in fees on each single family home constructed, ahead of actual construction.

“Ranging in size from 466 to 1,950 square feet of living space, the homes at Republic Meadows offer one to four bedrooms and one to two-and-a-half baths,” reported about the Lennar homes in San Antonio.

Compare the San Antonio housing to Sacramento’s  Lennar homes: the “high $400,000s” in South Sacramento, the “mid $400,000s in Natomas, and the “low $400,000s” in Rancho Cordova. These neighborhoods are standard track housing, middle-working class areas, and these are just the starting prices before any upgrades.

In California, housing “solutions” were offered by Apple, which promised $2.5 billion in affordable housing; Facebook pledged $1 billion in affordable housing funds; and Sen. Scott Wiener (D-San Francisco) pushed his high-density housing bill, SB 50. Democrats have tried rent control, and mandating cities build a certain percentage of “affordable housing,” to no avail.

A flurry of eight related Assembly housing bills proposing to target development and impact fees claims to be a solution, but are word salads lacking any real solutions:

AB 1484: Provides a comprehensive reform of the nexus standards that cities and counties use to determine their fees.

AB 1924: Requires jurisdictions to assess fees on a per-square-foot basis, giving developers the option to build smaller, more affordable units without being penalized with multiple fees.

AB 3144: Provides state funding to reimburse local governments who waive impact fees on affordable projects.

AB 3145: Establishes a ceiling for development fees based on the median home price in a jurisdiction. Cities and counties that exceed this ceiling will be required to seek approval from the Department of Housing and Community Development, and justify the need to do so.

AB 3146: Requires cities and counties to report a wide variety of essential housing data to the Department of Housing and Community Development, including the number of new housing units that have been issued a completed entitlement, a building permit, or a certificate of occupancy.

AB 3147: Ensures that certain impact fees are payable under protest. This allows for a developer to pay a fee they consider to be unreasonably high so they can continue construction.

AB 3148: Reduces the impact fees paid on affordable housing units that are built using the state’s density bonus program.

AB 3149: Modernizes the way that local agencies notify interested parties prior to levying a new fee or service charge or prior to approving an increase in an existing fee or service charge.

The Berkeley study addresses this:

“Our conversations with experts and stakeholders made it clear that some approaches would not be productive. Simply capping impact fees statewide, for example, could cut off much-needed revenue, resulting in lowered levels of public services and potentially incentivizing cash-strapped localities to block new housing altogether.”

“Over the course of 2017 alone, the national single-family and multifamily construction price indexes increased by 5.6 percent and 6.3 percent, respectively, compared to an average annual increase of 2.7 percent between 1990 and 2000. In that year, New York, San Francisco, San Jose/Silicon Valley, and Oakland ranked among the most expensive construction markets.”

“The cost of building a 100-unit affordable project in California increased from $265,000 per unit in 2000 to almost $425,000 in 2016. The same trends that increase costs for market-rate housing (such as land pricing, construction costs, and regulation) impact affordable housing. In addition, affordable projects are often subject to increased local scrutiny, further inflating costs. A 2014 study found that local government design requirements for affordable housing added an average of seven percent in total costs, and that community opposition (measured by holding four or more community meetings) increased expenses by five percent.”

While Gov. Gavin Newsom punishes cities he claims are not complying with the state’s affordable housing mandates, the California Legislature and governors have allowed more and more state mandates on all construction, including affordable housing: rooftop solar mandates and requirements that all new homes be “net-zero,” green homebuilding standards, fire sprinkler mandates, CEQA requirements, environmental impact studies, and many, many more.

Newsom even sued the Orange County city of Huntington Beach for failing to provide enough additional “affordable housing,” while his own home county of Marin has enjoyed a moratorium on affordable housing building requirements and will do so until 2028.

While former Gov. Jerry Brown signed the 2017 budget bill allowing Marin County to remain exempted from affordable housing requirements, he also signed SB 1333 in 2018 to eliminate a “housing loophole” that allows charter cities to reduce sites zoned for affordable housing, even if the action is inconsistent with the cities’ adopted general plans, which is a violation of the California Constitution.

Republicans argued against the housing exemption in the trailer bill, and asked why Marin was allowed to ignore its own housing needs, and instead export its housing obligations to neighboring counties.

“But Democrats who posture as fierce advocates for more housing, even those carrying high-profile housing bills, such as Sens. Toni Atkins and Jim Beall, voted for it and Gov. Jerry Brown signed it,” Dan Walters reported. “For at least another decade, therefore, Marin’s residents can smugly assume that their bucolic lifestyles will not be marred by having more neighbors who don’t make as much money and, you know, just don’t fit in.”

Nearly every attempt to reform the California Environmental Quality Act has been met with a wall of resistance. Instead, lawmakers simply vote to exempt powerful and wealthy development projects from CEQA: Sacramento’s Golden1 Center for the Kings basketball team; San Francisco’s Warriors arena; and the Inglewood Chargers/Rams Hollywood Park stadium, to name just a few.

Meanwhile, infrastructure projects, affordable housing, and even transportation projects come under extreme “environmental” scrutiny.

This housing shortage in California was created by California government and politicians, through and through. These pretend “fixes” only add to the burden.

This article was originally published by the California Globe.


  1. tomsquawk says

    all of the above is true, but what about the price of dirt? we’ve got 40,000,000 souls shoehorned in here

  2. As a result of more and more state mandates on all construction demanded by California Legislature actions, the cost of building affordable housing exceed the target sales prices of those affordable homes, thus there’s no ROI incentives for the builders to build. Builders have options as to where to build, and there’s a lot of low hanging fruit outside of California.

  3. If we delineated between legal and illegal, DACA included, and Citizens, we would have breathing room and a new perspective. We would certainly have no housing shortage, and prices would go down. There would again be equity for the American citizen in jobs and wages. More than anything else, the open border, Sanctuary policy and overwhelming illegal population in this state is the biggest problem, supported by corrupt politicians and their UnConstitutional policies.

Leave a Reply to Aprila Cancel reply