California Forum

Why is Utah’s housing crisis so much less dire than California’s? Hint: It’s not what you think.

Low-rise homes dot the landscape in San Francisco, June 26, 2017. A full-fledged housing crisis has gripped California, where the lack of affordable homes and apartments for middle-class families is severe. The median cost of a home here is now a staggering $500,000, twice the national cost. (Jim Wilson/The New York Times)
Low-rise homes dot the landscape in San Francisco, June 26, 2017. A full-fledged housing crisis has gripped California, where the lack of affordable homes and apartments for middle-class families is severe. The median cost of a home here is now a staggering $500,000, twice the national cost. (Jim Wilson/The New York Times) NYT

Sorry, Utah.

California’s epidemic shortage of housing hasn’t just sickened our own state – driving up prices, inspiring homelessness, and putting a $140 billion annual drag on our economy. The disease is spreading to our neighbors, too. Today, most major Western cities are experiencing minor league versions of our housing crisis.

This regional crisis has many causes: lack of water to support development, shortage of skilled construction workers, and the rising price of scarce land near job centers. But our Western neighbors face an additional challenge: the influx of Californians unable to find housing in their own state.

For 40 years, California state government has centralized power at the expense of local governments, in the process discouraging local approvals of housing. State environmental regulations make home-building slow and costly. State limits on local taxes favor sales-tax-generating development.

I witnessed the California epidemic’s spread recently in Utah, where the housing shortage is considered historic. For the first time since the 1970s, Utah, growing via births and the arrival of job seekers, is adding more households than housing units. So homeownership rates are falling, homelessness is rising, and the Salt Lake City Council has declared an affordable housing emergency.

Facing these challenges, some Utahans are seeking lessons from California’s mistakes so their crisis doesn’t worsen. A recent assessment by the nonprofit Envision Utah found: “Faced with rapid growth, many California communities, and even the state, imposed ever-more-stringent regulations designed to curb development, believing that if they slowed development it would put the brakes on growth.”

But, said Envision Utah, “California’s constraints didn’t slow growth, so demand for housing stayed high. Instead, those regulations simply diminished the supply, and we know what happens next.”

While Utah is  1/13 the size of California, comparisons are not outlandish. Both states have highly diversified economies, and high wages and educational levels. And, intriguingly, Utah and California are distinguished by their lack of housing. California is ranked 49th in the country in the number of housing units per person. Utah is 50th. But Utah’s shortage isn’t as deep as ours, and hasn’t produced prices exceeding the national average by two-and-a-half times. Why?

One answer is obvious: Utah doesn’t need as many housing units because it has the country’s largest families. That suggests one wildly impractical solution to the housing crisis – California embracing Mormonism as its state religion. But it’s no more farfetched than the 50-plus bills in our state Legislature that offer minor or counterproductive changes to California’s housing markets.

A more serious difference between the states involves local government. Utah is a place where state government defers to local government. California is not.

For 40 years, California state government has centralized power at the expense of local governments, in the process discouraging local approvals of housing. State environmental regulations make homebuilding slow and costly. State limits on local taxes, especially Proposition 13, create incentives that encourage sales-tax-producing development, not housing.

All this fuels NIMBYism. With their local representatives having relatively little power, municipalities cling to the power they do have: saying no to change in their communities.

Utah, a strait-laced place, has almost none of California’s restrictions on local control, and little of its NIMBYism. “We don’t have the problem you have with widespread anti-growth sentiment,” says economist Robert Spendlove, a member of the Utah Legislature.

That culture has made it easier for Utah to build housing fast, and adjust to the current crisis. Utah builders are already increasing production of more moderately priced homes.

The California response is different. The governor and legislators want to punish local governments that don’t create more housing. But local governments are already weary of state mandates. Might new housing ones only encourage more defiance and NIMBYism?

Of course, reforming California’s system of local government to restore local control and eliminate anti-housing incentives would be extremely difficult. But how easy is it to live under a miserable housing shortage that exports our people – and our housing challenges – to states like Utah?

Failing to address our housing crisis is bad for California. And it isn’t neighborly.

Joe Mathews writes the Connecting California column for Zócalo Public Square. He can be contacted at joe@zocalopublicsquare.org.

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