How misguided gov’t interventions stifle CA and Silicon Valley housing

In a recent LinkedIn post, land-use veteran Shawn Milligan argues that CEQA lawsuits, Cortese-Knox red tape, and Prop 13 tax distortions interlock into a Golden-Gate-wide deadbolt that shuts down the state’s housing supply. Wonder why the average monthly rent in most California cities is now $3,000? Milligan explores the impact of these three laws.

Since the 1970s, California’s housing landscape has been shaped by three landmark laws Their combined effects have contributed to a chronic housing shortage, rapid increase in costs, and deepening inequality, cementing the state’s notorious reputation as one of the least affordable places to live.

CEQA’s achilles heel lies in its susceptibility to litigation. Any individual or group can sue to delay or derail a project. Legal challenges can add years and millions of dollars to development timelines, driving up costs that are ultimately passed onto home-buyers or renters.

Go Deeper:

• CA opportunity worst in the US, sunk by the cost of living
• Extremist rent control efforts not dead—only delayed
• Crisis? What crisis? San Jose ranks at bottom of major metro areas for new housing permits

Under Cortese-Knox (California’s Local Government Reorganization Act that empowers county LAFCOs to approve or block city boundary changes and service extensions), Local Agency Formation Commissions (LAFCOs) often prioritize maintaining existing community character over facilitating growth. The Act has enabled restrictive policies that limit housing developments especially in suburban and exurban areas, leaving urban centers like Los Angeles, San Diego, San Jose, and San Francisco overburdened and unaffordable.

Proposition 13 drastically reduced property-tax revenue. Cities, strapped for cash, turned to sales taxes and development fees, incentivizing malls over homes and widening generational wealth gaps.

Together, CEQA, Cortese-Knox, and Proposition 13 have formed a perfect storm of unintended consequences, pushing median home prices past $800k and driving average Bay-Area city rents over $3,000 a month.

Read the whole thing here.

Follow Opportunity Now on Twitter @svopportunity

Sign up to receive updates on Opp Now articles

Email Address:

First Name:

Last Name:

We prize letters from our thoughtful readers. Typed on a Smith Corona. Written in longhand on fine stationery. Scribbled on a napkin. Hey, even composed on email. Feel free to send your comments to us at opportunitynowsv@gmail.com or (snail mail) 1590 Calaveras Ave., SJ, CA 95126. Remember to be thoughtful and polite. We will post letters on an irregular basis on the main Opp Now site.