SACRAMENTO, Calif. — The latest news about the California Legislature’s efforts to tackle the state’s preposterously high cost of living should cause Californians to snigger. “California Democrats pledged to tackle affordability in 2025, but their plans to address Trump cuts, housing costs, energy, insurance, grocery bills and inflation remain unclear,” CalMatters reported in February. “Six months after they promised to focus on California’s cost of living and affordability problems, California’s legislative leaders still don’t have a concrete plan,” noted a KCRA report this week.
The state’s Democrats control supermajorities in both houses of the Legislature, the governor’s office, and every state constitutional office. There’s nothing really keeping them from passing any high-priority legislative package, yet they can’t manage to pull this off — even though they’ve been yammering about it since the November election. Mainly, we’re just hearing rhetoric.
“California Democrats are delivering for workers and families in the face of Trump’s assault on affordability through tariffs, the gutting of 800,000 middle-class jobs and threats to our ports, tourism and retail sectors, hospitals and clinics, and funding that supports students and innovation at our colleges and universities,” said Assembly Speaker Robert Rivas, per the KCRA report. I agree about the disastrous nature of Trump’s on-again, off-again tariff proposals, but California’s affordability crisis long predates the president’s entry into politics.
Their inability to pass a package is eye-opening, but the more fundamental reason that Californians should shrug off this nonsense involves the hypocrisy. The state’s leaders have been pursuing cost-increasing policies for decades. They impose so many regulations and taxes that increase costs in most areas of our lives, then feign shock that everything costs so much. A recent article in the Center Square pointed to perhaps the perfect recent example of this phenomenon: the Low Carbon Fuel Standard being promulgated by the California Air Resources Board.
State officials at one point said the tough new fuels standard would increase the cost of the state’s already highest-in-the-nation gas prices by at least 47 cents a gallon, although the state’s legal office later rejected that estimate amid public outrage. Independent studies predict 65 cent to 85 cent increases once it goes into effect. Whatever the actual cost, legislative Democrats rejected a Republican “Cost of Living Week” bill that would have scuttled the new fuel standard — even as they promise to address California’s rising cost of living, the Center Square’s Kenneth Schrupp explained.
It’s reminiscent of Gov. Gavin Newsom’s emergency legislative session dealing with alleged oil company price gouging, which just happened to ignore the impact of the coming standard. Lawmakers also ignored the real reason for the state’s high gas prices: our high taxes, cumbersome regulations, special mandated fuels formulation, and state policy that’s resulting in the closure of refineries — points reinforced by a University of Southern California study noting that our gas prices could hit $8 a gallon by 2027. What’s that going to do to our cost of living?
Instead of addressing the ways the state drives up our basic costs, Democrats are focused mainly on proposed cutbacks in federal programs and imposing new regulations on the private sector. In April, per the Sacramento Bee, Rivas announced “select committees on early childcare costs, housing finance and affordability, gas prices and CalFresh enrollment.” No mention of insurance, either, which is another area where state price controls are driving up property and auto rates.
It’s also pretty silly to create select committees to examine the issues, let alone likely delay any decisions for months. As former Democratic Assembly member Mike Gatto of Los Angeles told CalMatters, “Every single member of the Legislature has a pretty good understanding of what is causing this affordability problem in the state of California.”
There is some good that might come from this. Many of the cost-of-living-related bills involve housing. Oddly enough, Democrats have passed several laws in recent years that reduce building regulations, mainly by providing streamlining or exemptions to the obstructionist California Environmental Quality Act (CEQA) — a 1970 law that requires most projects to go through a long and costly analysis process that stops, delays, and drives up costs of housing construction. It also allows lawsuits, which can be filed by any kind of project opponent.
Combined with other slow-growth laws and voter initiatives passed since the 1970s, CEQA has dramatically reduced housing construction, which has in turn reduced supply and then has driven our statewide median housing costs above $800,000 — and into the millions in many sought-after coastal communities. The deregulatory approach is welcome, but Democrats have been parsimonious in their targeted exemptions, as they’ve focused mainly on jump-starting construction of multi-family and subsidized units that most people don’t want.
KCRA pointed to one praiseworthy bill in the package that’s passed the Assembly and is backed by the governor: Assembly Bill 609. It would provide a CEQA “exemption for housing projects on sites up to 20 acres, which are on or adjoining current or former urban uses,” per the Assembly floor analysis. “This bill is much broader than the array of CEQA housing bills” as it “applies to larger projects, in less-populated areas, with fewer and less-stringent conditions.… The result includes large, single-family, market-rate projects at densities as low as five units per acre in or near remote small towns.”
Now we’re getting somewhere — even if it’s hard to understand why the Legislature doesn’t just reform or scrap CEQA rather than eroding it on a piecemeal basis. But while the Legislature and governor have some clue that past housing regulations are the cause of our housing affordability crisis, they absolutely, positively won’t acknowledge that their previous environmental and labor laws, and high taxes play a huge role in the state’s high prices.
As a result, they’ll just keep issuing press statements and delaying any relief package because, well, they aren’t about to offer real relief from their own policies.
Steven Greenhut is Western region director for the R Street Institute. Write to him at [email protected].
READ MORE by Steven Greenhut:
Erratic Trade Policies Hurt Businesses, Consumers
Will California Go Forward or Backward on Homelessness?
Trump’s Electric Vehicle Rollback Helps Consumers, Won’t Hurt Climate