Mahan: The key to lower cost housing in California is building at a lower cost

"At the very root of our affordability crisis is the high cost of housing. High rents and expensive homes are driving families and high-wage jobs out of California. Our housing crisis makes it harder to hire teachers, child care workers and law enforcement officers; and it is closely linked to our crisis of street homelessness."

"Over recent decades, we've fundamentally broken our housing market by driving up construction costs and limiting the supply of new housing. For a range of well-meaning reasons, we've piled on excessive fees, created long bureaucratic approval processes and been hampered by junk lawsuits. We've essentially imposed an upfront tax on new housing so high that many homes and apartments are simply impossible to build."

"The key solution to unlocking the millions of new homes that we need is to drive the costs associated with construction down, starting with the easiest costs to control—that is, the direct costs imposed on new housing in the form of taxes (cities call them fees) and the indirect costs created by long bureaucratic delays."

California faces a severe housing affordability crisis that drives families and high-wage workers out of the state while making it difficult to hire essential workers like teachers and law enforcement. High housing costs are linked to homelessness and prevent younger generations from achieving homeownership opportunities their parents enjoyed. The root cause involves excessive construction costs created by high fees, lengthy bureaucratic approval processes, and litigation. Solutions implemented in San Jose include converting approvals from political to administrative processes and reducing city fees that previously consumed up to 20% of construction costs. Addressing these barriers by lowering direct and indirect costs associated with new housing development is essential to unlocking millions of new homes needed across California.

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