California is the nation’s largest state, with a population estimated at just over 39 million. The availability of housing has not kept up with population growth. As is so often the case in California, government intervention has been counterproductive, resulting in an inadequate supply and skyrocketing housing costs, along with a lack of sustainable water and energy reliability.
Programs that subsidize housing cannot begin to meet the massive backlog that has been created. But there is an obvious solution to this problem – less government with fewer, more streamlined regulations that will increase the supply of housing and decrease costs.
Fees imposed by various state and local jurisdictions are another problem. For example, regulations require one “low cost” home for every 10 built, or payment of a fee which can amount to thousands of dollars.
Storm water compliance can cost up to $25,000 and hooking up to water and sewer lines can add another $20,000 – per home.
California’s huge unmet housing demand should lead to developers lining up to fill the need. That has not been the case in recent years. In San Diego County alone, we need about 12,000 new units per year to meet demand. While local construction once met or exceeded that number, the county is short approximately 50,000 housing units over the past 10 years.
Stringent regulations and excessive fees make expanding our housing stock extremely difficult. This crisis will worsen and costs will continue to rise as long as government continues to hinder the state’s once thriving housing industry. Until these factors are resolved, the Golden State simply won’t be golden for millions of people.