As one of California's biggest crises, housing is an excellent metaphor for understanding how our state came to be paralyzed with constant emergencies--and why we tolerated it for so long.
The housing crisis began to fester in California when we convinced ourselves that we could have it both ways: On the one hand, we could stop building housing (and declare that a victory for the environment)--and, on the other, we could still have lots of homes for everyone.
We also convinced ourselves that we could stop new roads--yet not have more traffic problems.
These statements may not have been truthful, but they were convenient. And however easy it was to demonstrate their falsity, few were interested in exposing it. Fewer still were interested in believing it.
Everything wrong with California happened to housing first.
Think taxes are too high? Local governments discovered that new housing in California could be both a whipping boy and a source of revenue. Today, fees and regulations routinely add $100,000 to the cost of a new home.
Over-regulation? Thy name is housing. Planning for a new home can take 10 years--and lots longer. This morass of delay and bureaucratic gamesmanship goes by lots of different names: planning, environmentalism, NIMBYism, whatever. No business suffers more regulation from people who know less and do more damage than housing.
Insurance crisis? Twenty years ago, trial lawyers discovered that a loophole allowed them to sue home builders if their homes did not stay perfect for 10 years. Almost every condo project in California was sued. That is why condo construction plummeted 95 percent after insurance companies stopped offering coverage. In California, construction-defect litigation drove one of our most important insurance companies, Golden Eagle, to insolvency. People started believing that going out of business was business as usual.
Many of the people involved in regulating housing will be surprised to hear they bear some responsibility for our housing crisis. After all, they will tell you, they have been sponsoring government assistance for housing for as long as they can remember.
On a good day, what they accomplished helped fewer than 1 percent of the people in this state make the most important investment they will ever own: their own home. But still, as long as they tried, they pretended that trying was the same as doing.
We let them get away with it, and we are paying for that mistake today.
And the media went along with it, too. Just check the news stories of major housing projects being shut down. Last year alone, tens of thousands of new homes were swept off the market because of opposition to new housing.
Now check these same stories and, after reading about how this was a great environmental victory, see how often a story includes any hint that stopping new homes contributes to the California housing crisis.
It is a sign of how deep this crisis is that many people will deny that any such (self-evident) link even exists between crushing new homes today, and the housing shortage tomorrow. They've been denying it for 30 years.
The solution is ...
If the housing crisis is California's oldest continuing emergency, the new governor should know that it is also the easiest solved: We don't need $27 gajillion in government subsidies for new homes. We don't need new regulations, new taxes, or anything like that.
We just need state and local government to get out of our way as we try and build what our customers are demanding so loudly: new homes for Californians. The resulting jobs and equity buildup for new-home buyers would help our economy blossom like a neatly tended garden.
It is something a new governor could do as his or her first official act.
How about it?
Mick Pattinson, president of Barratt American, is the former president of the California BIA.
Learn more about markets featured in this article: Los Angeles, CA.