SACRAMENTO, Calif. — We’ve obviously entered some strange political times, with notable examples including conservative Sen. Josh Hawley, R-Mo., joining with Sen. Peter Welch, D-Vt., in proposing a bill that would more than double the national minimum wage to $15 an hour. Just because Hawley defends the measure — the Higher Wages for American Workers Act — in populist, America-first terms doesn’t make it anything less than the advancement of a progressive priority.
Then there’s President Donald Trump’s lovefest with leftist Sen. Elizabeth Warren, D-Mass., over both of their support of scrapping the debt ceiling. That would let the feds increase debt with wild abandon, and without even the usual pretense of increasing the limit on an ad hoc basis. On the flip side, we’re now seeing California Democrats embrace what even mainstream media reports view as a remarkably pro-development legislative agenda.
As I’ve opined regularly for American Spectator, the impetus for these housing deregulation bills is the state’s intractable housing crisis. Despite stubbornly high interest rates and unsettling financial times, housing demand remains intense and years of regulatory hurdles and no-growth rules have limited supply and kept prices unattainable. Lawmakers have passed many bills that nibble at the California Environmental Quality Act (CEQA) and other impediments. Now, perhaps they’re getting more serious.
A report this week in CalMatters notes that “2025 is shaping up to be a banner year for pro-development legislation.” Lawmakers have “gone big” on measures to promote housing construction, including “bills to densify wide swaths of urbanized California, to rewrite the state’s signature environmental protection law to exempt most apartment buildings from review and to speed up the building permit process.”
This year’s bills are going much further than previous years’ bills, which is a good thing given that recent reports show that past efforts haven’t made any noticeable dent in housing construction. That’s no surprise to me, given that most Californians want to live in single-family homes and the CEQA streamlining and exemption rules mainly apply to multi-family housing, as progressive lawmakers can’t get over their dislike of suburbia.
The other reason is the union-dominated Legislature keeps including provisions that boost the costs of building. The head of a pro-housing group “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,” per CalMatters in February. “Developers are also at times required to sell or rent units below market prices.”
One notable measure — recently supported by Gov. Gavin Newsom — has unanimously passed the Assembly and is now in the Senate. Assembly Bill 609 only applies to infill housing in urban areas, but is far more aggressive than previous efforts in applying to larger and market-rate projects. The state still needs to reform CEQA permanently or at least apply exemptions to market-rate single-family homes, but the Legislature is heading in the right direction.
That recent CalMatters piece points to an even more encouraging development. “Then there are the bills aimed at providing immediate help to renters,” according to the article. “In short, there aren’t that many. Of all the tenant-focused legislation introduced at the beginning of the session, the most ambitious have been shelved for the year.” These clunkers included caps on rent increases and landlord fees. Their rejection is a sign that even many Democrats understand that rent controls limit housing production, contribute to our housing crisis, and lead to higher rents over time.
Fortunately, even California’s Democratic-heavy voters understand that issue — epitomized by their overwhelming rejection in November of Proposition 33. It’s the third time since 2018 that they’ve rebuked that effort. That atrocity would have allowed cities to impose the most extreme forms of rent control, including vacancy controls (capping rents even after a vacancy) and rent controls on single-family homes. Unfortunately, the Senate passed Senate Bill 384, which forbids landlords from using algorithms to help determine rents. The market sets rents — the algorithms merely help them determine the asking price. So it’s not all good news.
Sure, the Democratic-controlled Legislature continues with a variety of zany policies that impact the cost of housing — and everything else. Last week, I wrote about the majority’s promise to battle the state’s high cost of living even as they refused to pass a Republican bill to stop the implementation of a new California Air Resources Board fuel standard that’s likely to raise our highest-in-the-nation gas taxes by 47 cents a gallon or more. Democratic leaders refuse to acknowledge how their tax and regulatory policies are the main driver of higher costs.
Fortunately, Hawley is an outlier in the Republican caucus on such leftist drivel as minimum-wage hikes, although the jury is still out on the GOP and debt issues. Here in California, Democrats aren’t exactly born-again advocates of market economics, but their newfound embrace of housing deregulation, however tepid, is encouraging news. I suppose if a crisis gets bad enough, even progressives will adjust their approach a bit. That’s probably the strangest trend of all.
Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.
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