Pacific Research Institute

Government Policies Have Strangled State’s Housing Market, Made Housing Unaffordable, New PRI Issue Brief Finds

Big government policies and political constraints are the primary causes for rising California home prices and lack of supply, according to the findings of a new “California Ideas in Action” issue brief released today by the non-partisan Pacific Research Institute.  Reforms to open California’s housing market are recommended as the ideal way to solve the housing crisis.

Click here to download a copy of PRI’s new brief, Unaffordable.

Click here to watch PRI's panel discussion on California's housing crisis from the State Capitol in Sacramento.

“The primary cause of California’s housing crisis is politics, which have distorted and strangled the market,” said PRI’s Center for California Reform fellow Kerry Jackson, the author of Unaffordable.  “Additional layers of government – even well-intended policies – will aggravate the problem rather than mend it.  Only a fully open housing market would resolve California’s housing crisis.  Absent that, policymakers should strip away the built-up political constraints and allow the market to work as efficiently as possible.”

Among the key findings in PRI’s new issue brief:

 

  • Housing in California is excessively expensive – four of the most expensive housing markets in the United States are found in California.

  • California housing is expensive because of a severe shortage that is the result of government policies that have disincentivized home building.

  • Perhaps the single-biggest hurdle to home building in California are burdensome regulations from the California Environmental Quality Act (CEQA).

Jackson concludes that reform policies which free the market are the only solutions to the state’s housing crunch.  Among the suggested reforms are limiting the length of CEQA litigation that a housing development would have to endure (introduced last session by Assembly Republican Leader Chad Mayes as Assembly Bill 641), to adopting Governor Brown’s recommendations to condense approval times and reduce the regulatory hurdles for multi-family housing projects.

“In his new issue brief, Kerry Jackson gets at the heart of why housing costs have become unaffordable for most Californians,” said PRI President and CEO Sally Pipes.  “PRI’s new issue brief on California’s housing crisis contains important research and recommendations that lawmakers should take seriously.  Free-market reforms are key to building more housing supply and making housing more affordable in the Golden State. 

Kerry Jackson is a fellow with PRI’s Center for California Reform, writing weekly op-eds on statewide issues and occasional policy papers.  He has years of experience covering politics and public policy as an independent journalist and opinion writer.  He previously spent 18 years writing editorials on domestic and foreign policy for Investor’s Business Daily and three years as the assistant director of public affairs for the American Legislative Exchange Council.