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What is going on? Why are rents so high?
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Why are homes so expensive for the 40
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million residents of California? This
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particular issue, I think, almost
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captures better than anything else the
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underlying structural reasons why
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everything is so difficult in California
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and so expensive cuz you got these three
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structural forces that I think underpin
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the problem and show why a Democrat
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can't fix it. And the three things are
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union power, litigation, and climate
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dogma. The first part of the story is
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that we're just not building enough
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homes for the number of jobs that we're
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creating and the size of our population.
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It's a classic supply and demand
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situation. SQA, the California
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Environmental Quality Act itself is a
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nightmare in terms of this the amount of
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regulation you have to comply with. The
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private right of action means anyone can
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sue. 70% of SQA lawsuits are used to
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block housing. Most of those lawsuits
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are filed by unions. They're used as
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leverage to negotiate what they call
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project labor agreements where you have
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an agreement for the site and usually
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they have one or two of these
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components. Both of which sound great.
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Skilled and trained workforce which
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means union only. So it's a closed shop
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and prevailing wage. Again sounds very
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good but it's two or three times market
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rate wages. So both of those things
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inflate the