California Study Cites Regulatory Toll on Housing Production
California’s regulatory climate, which “is the most costly, complex and uncertain in the nation,” has led to “chronic underinvestment in residential construction” in the state, with a shortfall of more than 500,000 housing units since 1995, according to a new study.
There is only a 6% probability in California of having a subdivision project approved with no modifications, according to the “California Competitiveness Project,” which was conducted by Bain & Company for the California Business Roundtable. By contrast, in Texas and Arizona, there is nearly a 75% chance of project approvals with no required modifications.
Furthermore, it takes an average of 33 weeks to get project approvals, compared to 16 in Arizona and eight in Texas, the study found.
Nearly 40% of the companies that were interviewed for the project said they were planning to move jobs out of the state, and 100% of the senior executives who were interviewed view the business climate in California unfavorably.