The California Environmental Quality Act (CEQA) has been a growing and chronic economic impediment in California. CEQA, a 1975 law to publically review, document and mitigate “significant” environmental impacts of new development, has mutated into a monster. CEQA discloses such impacts in an “environmental impact report” (EIR) with related impact-correcting commitments.
Almost anyone can file a CEQA lawsuit against any new development EIR they dislike. Plaintiffs win half of the lawsuits they file, and when they lose they do not pay the defendants’ legal fees. Whereas, plaintiffs get their legal fees paid by losing defendants.
Builders are forced to hire expensive unionized labor to ward off union bosses’ threats of spurious CEQA lawsuits. Business competition has shops and gas stations filing CEQA lawsuits to prevent competitors from building in their business territory. Residential subdivision EIRs will take 5 years in processing, be more that 300 pages long, and cost more as much as half a million dollars.
The CEQA EIR process has become a government-sanctioned playground for environmentalist exploitation, political patronage and pageantry. CEQA has been amended hundreds of times, mostly by partisan “green” special interests. Sadly, reform of CEQA with more objective and rational provisions has not succeeded.
Like all regulatory expansions, EIR's have delayed and inflated the cost of housing, industry and vital public infrastructure throughout California. This quackery in regulations feeds gratuitous green grievances and fuels government extractions from private enterprise for public abuse. Such chronic regulatory abuses are responsible for the loss of California's middle class and flight to states with lower costs of living.
Nowhere is CEQA cost inflation more evident than in the deficit of rental housing in California. A new study by the University of California, Los Angeles concludes that Los Angeles has the least affordable rental housing in America, and other reports rate California as the worst state both for renters and mortgage-payers. The UCLA study reports that tenants in Los Angeles spend on average 47% of their income on rent. Economists generally describe rent as “unaffordable” if it consumes more than 30% of household income. Median rents in Los Angeles have risen more than 25% since 2000, while median household income has fallen. New York and San Francisco have slightly higher rents but much higher incomes -- the annual median income in Los Angeles is $57,000 compared to San Francisco’s $75,000 and New York’s $64,000.
LA’s regulatory quackery makes matters worse. If developers could build more high-rise or high-density housing, rents would fall. But thanks to ancient zoning laws, such ventures are very difficult. More than 78% of the LA’s residential land is currently zoned for single-family homes, according to the LA Department of City Planning. By comparison, only 24% of San Francisco and 25% of New York City is zoned for single-family homes. (The Economist, August 23, 2014)
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