Monday, February 24, 2025

Are CA’s Housing Laws Building More Homes?

By Lynn La, CALMATTERS

New housing construction in a neighborhood in Elk Grove on July 8, 2022. Photo by Rahul Lal, CalMatters

Has California’s spate of recent laws to build more housing worked? A report published today holds some answers.

Its conclusion? Outlook not so good.

As CalMatters’ Ben Christopher explains, YIMBY Law, a pro-housing development nonprofit, looked at five California laws. Those include one from 2021 allowing people to split their single-family homes into duplexes; and another from 2024 enabling churches and other places of worship to build affordable housing on their properties.

It found that while the laws chip away at regulatory barriers to encourage the construction of more apartments and other dense housing developments, they have had “limited to no impact on the state’s housing supply.”

Few projects have broken ground that take advantage of the laws: Under the 2021 duplex law, for instance, building permits for only 140 units were issued in 2023. And no religious institution has taken part so far in 2024’s “Yes In God’s Backyard law.”

YIMBY Law’s executive director said part of the reason the laws have been ineffective is because they include strict requirements and loopholes, such as mandates for developers to only hire union workers or pay workers higher wages. Developers are also at times required to sell or rent units below market prices, which render building affordable housing less financially appealing.

There are other possible reasons that discourage construction in California. For example: high interest rates, a labor shortage of construction workers and rising costs for materials. Housing industry experts say these construction headwinds are likely to intensify under President Donald Trump administration’s policies related to tariffs and immigration.

Drastic layoffs expected at the U.S. Department of Housing and Urban Development, which funds housing and homelessness services, could further strain state efforts to make housing more affordable.

Read more here.

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.