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Green Folly
Regulation Drives Up LA Housing Costs

Rent prices are rising across the country, but even among the most expensive cities, Los Angeles has the most unaffordable rental housing. On average, LA tenants burn 47 percent of their income on housing, even in bad parts of the city. This number is higher than any other city and well above the 30 percent cut-off economists use to mark unaffordability. The Economist picks out some reasons LA’s housing costs are particularly high:

If developers could build more high-rise or high-density housing, rents would fall. But thanks to restrictive zoning laws, they find this extremely hard. The zoning code hasn’t changed much since the 1940s. More than 78% of the city’s residential land is currently zoned for single-family dwellings, according to the LA Department of City Planning. By comparison, only 24% of San Francisco and 25% of New York City is zoned exclusively for one- and two-family homes.

Some of California’s green rules drive up rents—and hurt the environment, too. The California Environmental Quality Act (CEQA), signed by Governor Ronald Reagan in 1970, allows almost anyone to sue to block any development, and is used by the slow-growth lobby to thwart vertical expansion. “The irony is that CEQA is now preventing us from building high-rises near public transit, which would improve the environmental quality by allowing people to walk more and not use their cars,” says Richard Green of the University of Southern California.

LA’s housing might be the most expensive in the nation, but it isn’t the only place where regulations drive up housing and other costs. Many other cities have similar problems. In response, liberals often propose further redistributing resources to make the higher prices more bearable for lower-income families. But this is grabbing the wrong side of the stick: policymakers ought first to clear away the regulations squeezing the incomes of working families and then see what, if any, redistribution measures are necessary.

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  • LivingRock

    Now we can’t block the view of the Hollywood sign…

  • Jacksonian_Libertarian

    “In response, liberals often propose further redistributing resources to make the higher prices more bearable for lower-income families.”

    Giving the government more money and power is the first response to any problem for all leftists, and it is always the wrong thing to do. The Government Monopoly has the same lack as all monopolies, it lacks the “Feedback of Competition” that forces continuous improvements in Quality, Service, and Price in free markets. Unmentioned in the article is how hugely expensive it is to get permission to build in LA, with fees to the City of $50k+ per dwelling unit. They call it fees, but it is really just rent seeking government filled with useless bureaucrats being a burden on the productive private sector.

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