Fireside Chat: What’s the Matter with California?
Jonathan Woetzel, Director, McKinsey Global Institute
Conor Dougherty, Author, Golden Gates: Fighting for Housing in America and Housing and Economics Reporter, The New York Times
4 Key Takeaways
- 1. The problem with housing in California is it costs too much, and there isn‘t enough of it, particularly for people who aren‘t wealthy, says Conor Dougherty. In California, 5.6M households are rent-burdened, and the lack of housing costs the state $140 billion a year.
- 2. The problem is inherently local. In the U.S., it is predominantly city councils that set housing policies, dictating where, how much, and for what cost housing gets built. The speakers discussed the ideal level of government to be setting policies, to which there was agreement on the State being the best mediator. State level solutions would be able to drown out local opposition, that can often fall subject to the tragedy of the commons. De-regulating housing is ideal for Jonathan Woetzel, who believes that the State and city of California should implement more ministerial and by-right processes to de-bureaucratize the sector.
- 3. It’s a matter of unlocking the barriers. These are the local-planning barriers, abuse of the system, and the length of the process. Jonathan Woeztel also speaks on three related challenges that hinder development: unlocking the land, lowering the cost of affordable housing, and finding the money.
- 4. Knowing the solutions and implementing them are very different things. There are too many sources of resistance during the implementation phase, which funny enough, is contrary to what people express in the polls. It‘s a will problem , says Dougherty, who explores these issues further in his book Golden Gates: Fighting for Housing in America. There are huge gaps between public opinion in polls and public opinion when projects are implemented.