California’s Housing Laws Yielding Disappointing Results

A spate of California laws aimed at increasing the housing supply have had “limited to no impact,” according to an analysis by advocacy group YIMBY Law.

Despite several new laws that allow new types of residential construction and conversion, a combination of factors — including local opposition from NIMBY groups, high labor costs, and affordability mandates that limit developers’ profits — has kept hew housing production to a minimum, reports Ben Christopher in CALmatters.

Sky high interest rates, chronic shortages of construction workers and high material costs (all of which could be exacerbated by current or expected changes to federal tariff, immigration and fiscal policy) all work to make residential housing development a less appealing financial proposition. Insufficient public funds and expected cuts to federal housing programs may weigh down on the affordable housing sector too.

One exception to the rule: accessory dwelling units are growing in number after the state permitted them, with 28,000 ADU permits issued in 2023. This law, experts say, took about five years of retooling before it became effective. Cities used strategies such as offering pre-approved ADU plans to lower the cost of construction and streamline permitting for homeowners.