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Sunday, February 16, 2020

Think tank exec: California Environmental Quality Act forces land costs up, contributes to housing crisis

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By Chris Adams | Sep 9, 2019

It seems there is no end in sight for the housing crisis plaguing regulation-friendly California. | Pixabay

LOS ANGELES – Critics of the innumerable regulations in the dwelling-starved Golden state are blaming it on the California Environmental Quality Act (CEQA).  

"By reducing the amount of land that can be built on and … that act (CEQA), in combination with some of the urban growth restrictions you see, especially in the Los Angeles and San Francisco area, they basically increased the cost of housing,” said Baruch Feigenbaum, assistant director of transportation policy at the Reason Foundation, a nonprofit think tank. “And the reason they’ve done that is because a developer has to build the same amount of housing on less land. And so by artificially restricting the amount of land, you’re increasing the price of the land.”  

Alleged violations of the state's voluminous government regulations often are the basis for a large percentage of civil lawsuits in state courts.

Feigenbaum wrote on the Reason Foundation website that CEQA establishes a review process that undermines market forces and perpetuates the crippling housing shortage and affordability issues. 

Moreover, developers are required to submit a CEQA impact study, reported a 2016 article in City Observatory. In essence, that allows local governing bodies to inhibit or postpone projects despite developers meeting all zoning requirements.

Feigenbaum also noted that 29 percent of CEQA lawsuits targeted residential development, representing the largest segment of CEQA lawsuits.

He believes the people who already own homes in these areas are the ones pushing a restriction agenda. He said they are either trying to prevent new development because they like living on the rural edge or they want to see the value of their dwellings/property increase.

“If it costs more to build new housing, then existing housing prices are going to increase more than they otherwise would,” Feigenbaum said. “So it’s basically folks who own homes who are trying to benefit themselves as opposed to thinking about what the societal good would be for having more housing in these regions.”

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