California needs to build — not regulate — its way out of the housing crisis – Daily News

California housing prices are out of control. According to new Apartment List data cited in late August by the San Francisco Standard, asking rents jumped 14 percent between March and July as the artificial-intelligence boom brought new workers and money into a housing market that was already severely constrained.

Yes, collusion among landlords is a small part of the problem. Some property owners and managers have coordinated with one another, using technology to share sensitive, nonpublic pricing and inventory data and avoid competing directly with one another on rent. However, the biggest culprit is that California simply isn’t building enough homes.

While California has directed cities and counties to plan for roughly 2.5 million new homes by 2030, an analysis published this month found that just five jurisdictions in the entire state are currently permitting housing fast enough to meet their state targets across every income category. Fewer than one-third are on pace even for their market-rate housing targets.

It’s basic supply and demand. When there aren’t enough homes, prices rise for the ones that exist. 

Instead of building, California — both the statehouse and local jurisdictions — has focused on piling on new housing regulations — in particular, against the rent-pricing algorithms landlords use to inform their pricing strategies. That effort hasn’t worked. 

Take San Francisco. In 2024, the city became the first in the country to ban landlords from using certain rent-setting algorithms. But the San Francisco Standard reported this month that, two years later, not a single civil action has been filed under the law. Rents, meanwhile, are soaring again — because the state is not prioritizing building up its housing stock.

A simple consumer-minded law that simply banned landlords from pooling private data to coordinate pricing would make sense. But that isn’t what the laws California have considered do. They outright ban the pricing tools — software that just estimates market rents — themselves instead. That’s like outlawing weather forecasters because it rains, or Kelley Blue Book because cars are expensive. It misses the point. 

The state needs to make it easier, faster, and cheaper to construct new homes by streamlining approvals, reducing regulatory barriers that delay projects, encouraging local governments to permit more housing, and making sure zoning allows new homes where people actually want to live. 

In some ways, Sacramento has already begun moving in that direction. 

Last year’s state budget delivered the most significant overhaul of the California Environmental Quality Act in decades.