Solve this mystery: Why does it cost three times as much to rent a U-Haul going from San Francisco to Austin than going in the other direction?
Answer: When all the movers are heading one direction (SF to Austin), you have to pay somebody to drive them back.
Lawrence McQuillan, a Senior Fellow and Director of the Center on Entrepreneurial Innovation at the Independent Institute, connects the dots in his new report on California’s dysfunctional housing policy. How to Restore the California Dream explains how the “Golden State” became the poster child for high housing costs and, relatedly, homelessness.
Through a combination of regulations, zoning taxes, and higher labor costs associated with union requirements, we’ve pushed thousands of low and middle-income residents to other states (or in the extremes, to the streets). Lawrence finds that California would need another 4 million additional housing units just to stabilize prices, yet this is impossible given the amount of red tape.
As lower income people look for cheaper and cheaper housing, they crowd out those already living on the edge. Thus the homelessness has become a state of emergency.
Last time I had Lawrence on my show, we discussed California’s pension crisis. This Sunday, we’ll discuss housing and homelessness, and how a proposed Constitutional amendment could resolve the affordability crisis.
Finally, I ask Lawrence to define a “housing shortage,” which I argue cannot exist by definition. Are exorbitant housing costs simply the price we pay for living the California Dream?
- Independent Institute
- Lawrence McQuillan (@Econ_Doc) / Twitter
- How to Restore the California Dream: Independent Institute
- A Proposed California Constitutional Amendment to Resolve the Housing Affordability Crisis | Lawrence J. McQuillan
- The Oakland-based Independent Institute gives its annual “California Golden Fleece Awards” for our beautiful states ugliest policies.