In fact, those nine are all among the bottom 15. Los Angeles landed in the middle of the rankings, even though its “composite price levels” are 8.6 times higher than income, higher than San Jose (7.9), San Diego (7.7), San Francisco (7.6) and even New York City (6.6).
California, was “the fastest-growing state in the country for the first two-thirds of the 20th century,” says the report, produced by the George W. Bush Institute-SMU Economic Growth Initiative, and “was once well-known for pro-growth boosters like Pat Brown, governor from 1959 to 1967.”
But development broke down after “Coastal California led the way in turning against growth.”
The researchers point to the “publication of a prominent book ‘The Destruction of California,’” as a milestone in the state’s shifting politics. In that 1975 work, author Raymond F. Dasmann called “for an end to housing expansion, the spread of growth moratorium policies in suburbs across the state in the 1980s, and successful initiatives to block densification in the state’s largest cities in subsequent decades.”
They also noted that building impact fees can reach “$200,000 for a new duplex in some California cities, while rezoning petitions can cost more than $100,000 per unit.”
Also mentioned was the California Environmental Quality Act, which empowers “local residents to object to and often block developments on specious grounds,” as well as complex new state rules that regulate “carbon ‘embedded’ in construction materials and processes as recently as March 2024,” and put a crimp on development.
Directly under the heading “States are just as likely to impose counterproductive policies as pro-growth policies,” is, naturally, California, which “has led the nation in imposing statewide housing and land-use rules on localities for decades” and has some of “the most restrictive, dysfunctional policy environments in the United States.”
So what should California do? Adopt pro-growth policies, of course, starting with, but going much further beyond, liberalizing “overrestrictive land-use rules to unleash much higher rates of new homebuilding.”
The paper also suggests streamlining the development process, which is talked about a lot in California but followed by little action; reduce minimum lot size (which lawmakers believe they addressed in 2021 with Senate Bill 9, but, well, maybe not); zoning changes that increase the volume of land available to build on; and a few other ideas California has dabbled in but can’t seem to carry out in a meaningful way.
California could also use, say the researchers, more new cities, such as the California Forever development in Solano County proposed by Bay Area venture capitalists. PRI senior fellow Steven Greenhut calls the project “a big proposal” that “can help break us out of a public-policy rut” that has done little to boost growth.
“One of the most-compelling parts of the new-city movement,” says Greenhut is its challenge to “encrusted local institutions.”
“New cities offer not only more housing, but the possible rethinking of local government,” Greenhut continues. There are endless examples, he says, of “homelessness run amok, urban crime, failing public schools, crumbling road infrastructure, outsized pensions that consume public budgets, lousy transit systems and multibillion-dollar municipal governments that can barely manage to build a public toilet,” all of which could be avoided in the future with a fresh approach that isn’t limited by tired public policy.
There should be nothing controversial about trying “better ways to provide public services.” But this is California where political society has overtaken civil society and government is considered sacred. The idea of a private city is unthinkable to many.
California Forever, which could eventually be home to 400,000, has for now been shelved. The company behind the plan pulled last year a November 2024 ballot measure and then “began work with all stakeholders to prepare a single combined set of approvals, including the General Plan change, Specific Plan, Environmental Impact Report, and Development Agreement.”
Since then, Suisun has voted to explore the annexation of unincorporated Solano County land beyond its city limits. The tract “includes a large part of the nearly 60,000 acres that were acquired by California Forever investors,” says GlobeSt.com.
More recently, the city of Rio Vista, about 30 miles to the east, has expressed interest in annexing county land and working collaboratively with Suisun in what appears to be an effort to both manage and expedite the buildout of California Forever.
We’ll see how this works out, because, as the SMU study authors noted, the California Forever organizers decided to build their own town because they had become frustrated “with the restrictive and inflexible rules governing development in existing Northern California cities.”
The blank canvas they were hoping to build on has become a bit messy.
Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute.
