California’s decades-long housing crisis has left half of the state’s households struggling to afford a home. In response, Gov. Jerry Brown signed a collection of bills late last month intended to solve the problem. But the legislation will do little to achieve meaningful relief.
Homeownership in California is at its lowest rate since World War II. Housing prices in the biggest cities have jumped by 75 percent over the past five years, and the median cost of a home is $500,000 — twice the national average. California is the most difficult market for first-time homebuyers, and its ballooning housing costs are out of reach for nearly all of the state’s low- and middle-income residents.
The 15 bills Gov. Brown signed include a new tax on real estate transactions and a $4 billion state bond issue. According to the Sacramento Bee, the money raised by the legislation will result in 77,000 new housing units over five years when merged with funds from nonprofit groups, private investors and tax credits for low-income projects.
“These new laws will help cut red tape and encourage more affordable housing, including shelter for the growing number of homeless in California,” Gov. Brown boasted.
Nonsense. These new measures are nothing more than additional government interventions — which is the source of the issue in the first place.
As the Los Angeles Times reports, in order to keep up with California’s population growth, developers need to build roughly 100,000 more new homes each year than what’s already planned. On top of that, the Bee adds, the new tax on real estate paperwork and mandates to pay “prevailing wages” for building projects — a sop to Big Labor — will drive up the cost of the new construction.
California communities are notorious for using zoning, environmental and other procedural laws to block housing projects. This is why the state has a housing crisis. Until Gov. Brown and Democrats embrace measures to dismantle state and local regulatory barriers, all this hoopla about progress is nothing more than feel-good blather.