For some American cities, imitation is the sincerest form of flattery—New York City, for example, wanting to to be in the same sentence as Paris and London as cultured, cosmopolitan hubs for world travel and commerce.
The year is 1994. Only about one in four American homes has a personal computer. The internet is virtually unknown. Blockbuster Video rentals are the go-to source for home entertainment. And a development group submits plans to California regulators for a new 22,000-home planned community about 40 miles northwest of Los Angeles. With luck, now that all lawsuits have been resolved, the first homes will go on sale in 2021—27 years after the application process started.
State and local governments claim they desperately want more residential construction to increase housing affordability. But what politicians say and what they do are two very different things. This is the only explanation for why a San Franciscan recently spent over six years and paid $1.2 million in legal fees and application costs before finally obtaining approval to build an apartment building. I can think of no better example that showcases how badly-designed regulations and remarkably poor governance have created California’s housing crisis.
Nearly $50,000. About $60 per square foot. That is the city fee that a San Jose developer was asked to pay to obtain a permit to convert a recreation room in an existing apartment building into two small studio apartments. These “pay to build” schemes are now commonplace in California as municipalities face increasingly severe budget pressures and look to developers for the deep pockets that can fill in the gaps between municipal spending and tax revenue.
My friend and former student Paul Gerner suggested to me a few years ago that the federal government have a “regulatory reset.” The idea is that the government eliminates all regulations and then brings back the one it decides it wants. Presumably we would end up with substantially fewer regulations.
California lawmakers are introducing a set of bills that would require state healthcare workers to undergo “implicit bias and racism” training every two years. The reason? Maternal mortality rates among black women are about three times as high as for non-Hispanic white women, Hispanic women, and Asian women.
As far as California state government is concerned, think of the next couple of the weeks in the Sacramento as the quiet before the storm—that disturbance coming when Governor Gavin Newsom announces the “May revise” to his January budget proposal, based on April’s revenue flow.
One of the great things about California is that we build the future. From Bill Hewlett and David Packard at the tail end of the 1930s, through Steve Jobs and Steve Wozniak in the 1970s, to all our great tech companies today, the Golden State has blazed a path of innovation. All of that was built first on imagination.