Apparently you didn't. Try reading the entire article this time.
1. WE HAVEN'T BUILT ENOUGH HOUSING
Even when new construction was booming in the early and mid 2000’s, new homes and apartment buildings weren’t being built in coastal cities where the vast majority of Californians work. While places like the Inland Empire and Central Valley saw a building craze, places like San Francisco and Los Angeles basically flatlined.
2. DEMAND IN URBAN AREAS HAS REACHED A BREAKING POINT — AND PART OF THAT IS GLOBAL
Over the last decade, Californians have increasingly tried to cram themselves into major urban centers that are already jammed with residents.
The Bay Area is the poster child here. Between 2000 and 2007, Bay Area cities accounted for only four percent of the state’s total population growth. Between 2010 and 2017, nearly 20 percent of all new Californians were either being born in or moving to the Bay.
3. PROP 13 DILUTES A CITY'S INCENTIVE TO BUILD NEW HOUSING
Why hasn’t California built enough housing to keep up with its population?
Most housing researchers agree that part of the reason is Proposition 13, the landmark 1978 ballot initiative that capped how much local governments could collect from property taxes. While intended to protect California homeowners from unmanageable property tax bills, Prop 13 has produced a host of unintended consequences.
Imagine you’re a city, sitting on a huge plot of vacant land. You could zone that land for housing or for commercial use, like a hotel or a Target. Your city obviously needs more housing--prices are sky high.
Easy decision, right?
Nope.
4. GETTING NEW HOUSING APPROVED IS DIFFICULT AND EXPENSIVE
It can be hard to be sympathetic to developers. From time immemorial, it feels like they’ve complained about rules and regulations they say make it harder to build their projects. The builder who designed Stonehenge probably thought there was too much bureaucracy involved.
While it may be tough to trust developers, that doesn’t necessarily mean that they’re wrong. The process by which a piece of land is approved for new construction can be incredibly cumbersome, time-consuming and risky. While good data on exactly how much this adds to housing costs is hard to come by, typical approval time for projects in San Francisco is over a year, while in L.A. it’s eight months. That doesn’t include when land needs to be “rezoned” for residential development, which can take even longer.
Why the lag? Here’s the laundry list.
- Multiple Layers of Government Review: A housing project often must go through multiple government agencies, including the planning department, health department, fire department, building department and perhaps most importantly, a city council.
- Lots of Avenues for “Not In My Backyard” Voices: The review process for new developments gives ample opportunity for local residents to express their opposition. Locals may fear that new housing projects will change the character of their neighborhoods, increase traffic and hurt their property values. If a city councilmember votes for new housing, he or she may have to face dissatisfied voters.
- An Often Misused Environmental Law: The California Environmental Quality Act, or CEQA, requires that local agencies consider the environmental impact of a new housing development before approving it. That sounds like a worthy goal, but the law has often been abused to prevent new developments — even environmentally friendly ones with high-density housing and bike lanes. According to the nonpartisan Legislative Analyst’s Office, CEQA appeals delay a project by an average of two and a half years.
- Local Growth Controls: Two-thirds of California coastal cities and counties have adopted policies that explicitly limit the number of new homes that can be built within their borders or policies that limit the density of new developments. Subtler growth controls include not zoning enough land for new development or requiring supermajorities to approve new housing.
5. LAND, LABOR AND RAW MATERIAL COSTS ARE HIGH — AND RISING
Unfortunately, California’s coastline topography
makes it more expensive to build here than most other places. Also, there’s the ocean. You can’t expand into the ocean.
Limited land plus tons of demand means high land prices. In many markets in California, the bulk of a single family home or apartment building’s value is in the land it is built on.
But while the land itself is what typically eats up most of a developer’s budget in California’s hottest markets, it’s not the only cost-driver. Construction labor and the cost of the raw materials have been rising over the last five years, and are higher in California than other parts of the country. According to the
Legislative Analyst’s Office, construction labor is about 20 percent more expensive in major California cities than in the rest of the country.
On the labor side, a shortage of skilled construction workers bears much of the blame. When the housing market crashed in the late 2000’s, construction workers left the industry in droves. And those same workers haven’t come back.
Like I said, it's a little more complicated than what he posted.