Almost 60% of Californians believe their state is heading in the wrong direction. Yet voters again gave the Democratic Party total power in the state to continue its decadeslong mismanagement. It is hard to blame only Democratic leadership for California’s woes when voters themselves pass ballot propositions that repeat the mistakes that have put the state on a path of perpetual decline.
California is, objectively, the least affordable state in the union. The Bureau of Economic Analysis puts out a Regional Price Parities index every year that measures the cost of living in each state, broken down into “housing,” “utilities,” “goods,” and “other services.” The index is set to average out at 100, so a state with a 105 rating is a more expensive place to live, on average, than the rest of the country, while a state with a 95 rating would be a comparatively more affordable place to live.
According to the Bureau of Economic Analysis’s most recent Regional Price Parities index, California is the most expensive state in the nation, led by utility costs that are 60% higher than the national average and housing costs that are 55% higher. Not coincidentally, all of the 10 most expensive states to live in are run by Democrats.
The unaffordability of blue states is not an accident but a policy choice. In California, Democrats have mandated renewable energy purchases and loaded electricity bills with subsidies for rooftop solar panels, shifting costs onto households without them. They have also restricted oil and gas production, imposed a cap-and-trade system that raises the cost of fossil fuels, and burdened refineries with costly fuel standards and environmental regulations. Californians pay for the Democratic energy agenda every time they turn on the lights or fill their tanks.
Democrats have made housing more expensive in much the same way. Restrictive zoning limits where homes can be built and how many a lot can accommodate. Environmental reviews and lawsuits delay construction, while development fees, labor mandates, and building requirements drive up the cost of every unit that survives the approval process. Some projects become too expensive to build at all, leaving more families competing for fewer homes.
Californians had an opportunity at the ballot box this year to roll back one of the biggest drivers of housing unaffordability. The California Environmental Quality Act subjects new housing to lengthy environmental reviews and lawsuits that drive up costs and sometimes kill projects entirely. Proposition 45 would have streamlined those reviews and set deadlines for environmental impact reports and court challenges. Voters chose to preserve the obstacles that make homes harder and more expensive to build.
At the same time, Californians know housing is a problem in their state, and they wanted to do something. Enter Proposition 37, which authorizes $25 billion in bonds to fund down payment loans for middle-income buyers purchasing newly built homes. The program is intended to help families who can qualify for a mortgage but cannot save enough for a conventional down payment. But making it easier to borrow does not make housing cheaper. Subsidizing demand has a familiar consequence: Buyers gain purchasing power, and sellers gain room to charge more. Assistance intended to make homes affordable can instead get absorbed into higher prices.
TRUMP’S CORRUPTION HAS COST REPUBLICANS DEARLY
Giving buyers more money to bid on homes while making sure fewer homes get built is a recipe for higher prices. Yet Democrats keep returning to this playbook of subsidizing demand while restricting supply on issue after issue. In healthcare, they demand ever-larger insurance subsidies while preserving laws that require government permission to open a competing hospital or surgery center. Instead of letting competition bring prices down, they spend more money helping people pay inflated bills. California voters have chosen to continue the housing version of this mistake.
Republicans had a bad night Tuesday, but as evidenced by California’s results, Democrats have learned nothing. Voters have rendered judgment on President Donald Trump’s erratic and incoherent tariffs and his ill-prepared and mismanaged war, but as the Bureau of Economic Analysis data show, Democrats are incapable of delivering the affordability voters crave. Voters across the country who turned to Democrats for lower prices should look closely at what that promise has delivered in California.
Continue reading...
[ H/T Washington Examiner ]
