In addressing the nation’s falling fertility rates, many well-meaning pro-natalists advocate for cash incentives and higher tax credits for families with children.
Countries with dismal fertility rates, such as Hungary, have introduced generous programs that include subsidies for minivans, a stipend for grandma, and interest-free marriage loans of $36,000 for young couples. The incentives are annulled as soon as the couple bears three children.
But Hungary’s expensive programs aimed at raising the birth rate are likely to fail. While cash incentives do yield more babies, such programs are prohibitively expensive with minimal increase in births.
In my last blog post, 6 Factors Inhibiting Family Growth in California, I showed how several California problems may be affecting the state’s fertility rate.
Instead of raising the birth rate through cash incentives – which would be funded by already over-taxed citizens — Sacramento’s policymakers should fix the economic problems that produce financial strains on families in the first place.
Below are 6 solutions to encourage family growth in California.
- Welfare Reform
California has the highest supplemental poverty rates in the nation – which makes starting or growing a family challenging for many Californians. In a study by PRI’s Kerry Jackson, he found that many welfare programs entrap the impoverished in a cycle of poverty.
Private-sector and non-profit organizations are much better equipped to help individuals leave poverty behind permanently, such as exemplified in states like Wisconsin, Michigan, and Virginia. Policies and government programs oriented toward economic freedom result in higher incomes, life expectancies, and lower rates of poverty all of, which would ease family finances.
- Lease-Purchase Model
First-time home buyers often compete at a disadvantage due to lower savings for down payments and the home shortage.
One solution, outlined by Damon Dunn in his PRI book Punting Poverty, could be through adopting a “lease-purchase” model of house financing. With a rent-to-own model, families would not need to save up as much to make the move from an apartment to a home. Through private sector investments and non-profit programs, new programs could be made available to the public.
- CEQA Reform
A major factor in the rising cost of homes in California has to do with the California Environmental Quality Act. CEQA requires that every building project files an environmental impact report (EIR) – which costs anywhere from $200,000 to millions. The review process can take years and developers rely on incentives from the state or go elsewhere to make projects profitable.
Because of the costs, developers build as many units as possible on the available land to meet the housing shortage, upsetting local suburban families. NIMBYs then contest the building projects, further lengthening building costs and times. By reforming CEQA to allow for new zoning, and by loosening EIR requirements, the cost of homes would decrease, the housing shortage would be met, and homes of all sizes, especially family homes, could be built.
- Privatized Solutions to Homelessness Crisis
With the housing crisis, homelessness has exploded across the state. To address homelessness, Los Angeles plans to spend a whopping $1 billion on the cause.
Homelessness not only puts a financial strain on the state, but also families worry for their safety and health as neighborhoods are transformed.
In addition to housing reform, implementing effective and proven non-profit programs such as Virginia’s Shelters to Shutters or Tennessee’s Crossroads Welcome Center could dramatically alleviate the problem. PRI’s recent publication, No Way Home (Encounter Books), delves deep into the problem and offers many such practical solutions to homelessness.
- Eliminate Regressive Taxes and Fees
California is home to many hidden regressive taxes such as recycling fees for tires, mattresses, and electronics, cell phone fees, and high DMV fees. Through eliminating or reducing, middle-class and lower-class Californians would have greater breathing room in their checkbooks. PRI’s recent Nickel and Dimed study by Michael Thom offers information on how the fees are used.
- AB 1505
Parents looking to meet their children’s unique educational needs often look for options other than public schools. Homeschooling in California requires governmental hurdles and a time commitment that many parents cannot give. Private school tuition is often too expensive for families.
Charter schools are designed to meet such needs. However, AB 1505 which was passed in 2019, school boards can deny the formation of a new charter school if it does not serve the interests of the entire community. Such standards are highly subjective, and school boards (many of which are filled with anti-school-choice, union-backed representatives) can deny opportunities to students who need individualized options provided through charter schools.
McKenzie Richards is a development associate at the Pacific Research Institute.