What Makes California Homes So Expensive? This “Invisible Line” Explains It | Susan Shelley

Susan Shelley, a columnist and editor at the Southern California News Group, addresses the root causes of California’s soaring housing costs. She contends that policy decisions, particularly around development fees and urban boundaries, have significantly contributed to the issue.

Shelley explains that developers face substantial fees for each housing unit they build, costs which are inevitably passed on to consumers. This, she argues, is a primary factor driving up housing prices in the state.

A critical aspect of California’s housing policy, according to Shelley, is the implementation of urban boundaries as a climate policy. This restricts development in outlying areas to reduce commuting distances, a strategy enforced under the California Environmental Quality Act (CEQA) through the vehicle miles traveled metric.

Shelley describes the complex and costly process of mitigating environmental impacts under SEQA, emphasizing that these requirements add to the expense of housing projects, further inflating prices.

The government’s response to housing shortages has been to incentivize high-density apartment construction in existing neighborhoods, Shelley notes. She critiques the policies that allow for the densification of single-family areas without adequate infrastructure planning.

Residents, particularly those who have invested in single-family homes in low-density areas, are pushing back against the government’s densification efforts, leading to a stalemate where little housing is built.

Shelley touches on legal battles, such as the governor suing cities like Huntington Beach for failing to densify, highlighting the complexities and conflicts in California’s approach to housing development.

Proposing solutions, Shelley advocates for dropping the urban boundary and allowing housing construction in new communities. She argues for building single-family homes in areas where it is feasible and desirable, suggesting that this approach can facilitate homeownership and generational wealth.

In her conclusion, Shelley urges a reevaluation of California’s housing policies, particularly criticizing the emphasis on climate concerns over practical housing needs. She advocates for a balanced approach that fosters both economic growth and environmental responsibility.

Shelley’s insights reveal the complex interplay of policies contributing to California’s housing affordability crisis. Her call for a policy shift highlights the need for pragmatic solutions that balance environmental concerns with the realities of housing demand and economic growth.

*Views expressed in this video/article are opinions of the author and do not necessarily reflect the views of California Insider.