California Isn’t Special
No one wants “California-style” housing prices. But the state’s policies are not unique.
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California is used to living rent free in all of our heads, and to ignoring anti-left barbs from right-wing politicians. Lately, though, pro-housing reformers have used California as an epithet to reference its utterly failed housing policy—and that’s much harder to shrug off. The typical California home is valued at more than $728,000; the average apartment rents for $3,313 in San Francisco, and $2,781 in Los Angeles.
In Montana, home prices have more than doubled in the past nine years, spurring alarm from lawmakers. Now Republican leadership in the state is pushing to make housing easier and cheaper to build by legalizing duplexes, triplexes, and fourplexes in cities, and by forcing cities to “allocate space to house population growth.” The Frontier Institute, which supports these efforts, has warned of a “California-style” crisis in the making. “If we don’t want Montana to become like California, we must address California-Style zoning regulations before it’s too late,” the Frontier Institute cautioned, arguing in support of Governor Greg Gianforte’s proposed bills.
I’ve seen this framing in other states as well. One Nashville advocate, pointing approvingly to Montana’s proposed reforms, wrote on Twitter, “we do not want [Tennessee] to have California-Style zoning either.” Even Californians are getting in on the hate: “If Arizona wants California-style local control and segregationist zoning, it’ll get California-style housing prices and homelessness, simple as,” tweeted a political-science professor at UC Riverside.
What’s strange to me about this rhetorical trend is the underlying suggestion that California is somehow unique in its approach to housing policy. It isn’t.
In blue and red localities across the country, researchers find a “California-style” preference for single-family homes, hostility to density and renters, a tendency to segregate types of development (industrial, commercial, and residential), and a default toward delaying or blocking the construction of new homes, whether affordable or market-rate.
The Frontier Institute itself acknowledges that “much like L.A., a vast majority of Kalispell, Whitefish and Columbia Falls are reserved only for expensive single-family homes.” And as The New York Times documented in 2019, single-family zoning is “an American ideal.” At the time, 84 percent of Charlotte, North Carolina, was zoned solely for detached single-family homes, as was 85 percent of Sandy Springs, Georgia; 81 percent of Seattle; 89 percent of Arlington, Texas; and 79 percent of Chicago.
As researchers at Wharton have ascertained, California localities don’t even top the list of places with the most stringent land-use regulations. That distinction belongs to communities in the Northeast and mid-Atlantic.
How did so many American municipalities end up with “California-style” policies? As the economist William Fischel writes, zoning was not “the product of circumstances in one particular place” but a response to “popular demand,” which arose largely out of changes in transportation technology. The invention of streetcars in the late 1800s enabled onetime city residents who could afford the fares to move to newly constructed suburbs. These streetcar suburbanites did not adopt zoning, however, until they worried that they could be followed. Trucks made it possible for industrial and commercial activities to develop farther away from rails and ports, and buses freed less well-off workers from having to live close to their place of employment.
As Fischel tells it, terrified that their residential communities would be overrun with “noxious” uses, homeowners and developers began demanding zoning regulations that would protect them from people and buildings that they thought would reduce the value of their homes. By the end of 1916, just eight cities had zoning. From 1926 to 1936, 1,246 municipalities adopted zoning measures. During the 1920s, the federal government even supplied a model zoning-enabling law for states, for the purposes of “protect[ing] homeowners from commercial and industrial intrusions.” By 1930, 35 states had adopted legislation built on these recommendations.
What has made California the worst in the country for housing is not uniquely bad policy but population growth running up against generically bad policy. If both San Francisco and a small, economically disadvantaged town in Mississippi enact a home-building moratorium, that’s going to hurt a lot more in the former, where millions of people want to live, than in the latter, where just a handful of people do. Exclusionary zoning in an underpopulated town is like a home-security system for an abandoned shack.
Population growth spurred California’s economic growth. But as people flocked to the state, cities and suburbs refused to change the built environment to accommodate these newcomers. From 2010 to 2020, the state permitted (not built—just permitted) one home for every 2.54 jobs it added. In this, it did lead the country. Utah had the next-worst ratio: It permitted one home for every 1.57 jobs.
Now that remote work is redistributing workers to cities and suburbs across the country, California prices don’t seem so unthinkable elsewhere. To avoid that fate, states must build enough to meet demand. Whether they will is up for debate. In North Carolina, a 2021 bill to legalize small multifamily buildings in certain communities buckled under opposition from town leaders. In Maine, a similar effort to legalize denser housing types was watered down after opposition from municipal leaders. And in Virginia, an attempt to legalize duplexes in more of the state didn’t even make it past committee, as legislators balked at challenging local control.
Terrible housing policy isn’t California’s legacy; it’s America’s.