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Panel: CEQA litigation, fees and land costs cited as chief drivers of California's high housing prices
Summary
At the Salinas summit, land economists, a land‑use attorney and developers told attendees that CEQA litigation, prevailing wage requirements, fees and constrained land availability raise per‑unit costs; panelists referenced RAND and other studies showing California building costs far exceed those in Texas and Colorado.
Speakers on the California Housing Landscape panel traced today's affordability problems to a combination of land scarcity, procedural friction and regulatory cost. Wendell Cox (demographer) emphasized the rising share of total housing cost attributable to land in coastal counties, while Jennifer Hernandez (land-use attorney) described CEQA litigation and protracted procedural processes as practical blockers to timely production.
"The top target of CEQA lawsuits now for, as long as CEQA has been around, is housing," Hernandez said, outlining how litigation and extensive discretionary review make many projects uneconomic. She cited a recent RAND analysis comparing construction costs for rental apartments in California, Texas and Colorado, and summarized the finding: "You can build in Dallas for the cost of building 1 affordable apartment in California," which panelists said reflects land, prevailing wages, fees and processing time.
Developers on the panel confirmed the arithmetic: contributors to per-unit cost include land, city/county exactions, infrastructure (water and sewer connections) and compliance or legal defense costs. As one developer put it, large exactions and uncertain timing push project pro formas to the point that many projects "don't pencil." Panelists also warned that counting ADUs as a substitute for production of market-rate ownership is misleading: ADUs often function as transient rental supplements and do not replicate the asset-building function of ownership.
Panelists proposed a mix of reforms: more predictable, objective zoning standards; streamlined administrative review for projects that meet code requirements; preapproved plans for repetitive building types; and leveraging regional financing and public-private partnerships to pay for up-front infrastructure. Several speakers emphasized that pairing supply-side reforms with efforts to attract higher-wage local employers will improve affordability outcomes by increasing household ability to buy locally.
