The Hidden Costs of “Housing Reform”
As of the end of June, California housing prices are twice as expensive as the typical home in the United States. Purchasing a two-bedroom home in our state is nearly twice as expensive as just renting, with the latest studies estimating the median household income needed to buy a mid-tier home is 238,000 dollars.[1] It is no surprise that this housing crisis has resulted in our state having some of the lowest homeownership rates in the country.[2]
But, as I point out so often, this problem is not inevitable. It is the result of decades of housing bills and policies that have driven up costs by imposing burdensome regulations that prevent a much-needed increase in our housing supply across the golden state. Today, I want to look at a few recent housing policies that aren’t solving the problem – and in some cases, are making it worse.
It is mid-September, which means that we are rounding the corner on the end of the legislative year. September 13th was the deadline for the California Legislature to pass bills, and now Governor Newsom has until October 12th to sign or veto any bills brought before him. With the fate of hundreds of bills hanging in the balance, I thought this would be the perfect time to dig into some legislative updates. Today, we’re looking at a handful of past and present housing bills, and what they mean for you as a Californian.
When Housing Reform Backfires (SB 1211)
Before we get into this year’s new proposals, I want to start by looking back at a bill from last year that’s already showing some pretty serious consequences on the ground: SB 1211. It was marketed as a housing and parking reform measure, but in practice, it’s created real headaches for tenants in places like Koreatown, where residents are losing affordable parking and facing unexpected costs. Let’s unpack what happened here and why it matters.
SB 1211 was passed in 2023 as part of California’s push to streamline housing development by removing certain parking requirements near transit. The intent was to lower costs for developers and encourage more transit use. But in practice, the law has allowed landlords and developers to repurpose existing tenant parking lots, displacing residents who depend on those spaces. Essentially, it “allows landlords to replace parking spaces or other amenities with housing units, without requiring them to offer replacement parking.”[3]
We’re seeing the ramifications of this bill play out in real time, as tenants living in an apartment building in Koreatown here in Los Angeles are losing their guaranteed parking spots. This is already a dense urban area with more people than there is parking, but this law is only exacerbating the issue. The building owner in this case is making use of SB 1211, converting tenant parking spots into ADUs and leaving longtime residents scrambling for scarce, expensive street parking.[4]
Now, you may be thinking, isn’t this bill a good thing? After all, reducing certain regulations, like parking requirements, is good, and if it allows for the development of more housing units then that increases supply! But when we are looking at the long run, then it’s important to support policies that hit at the root cause of the problem, and in this case the policies that actually lead to more housing. SB 1211 isn’t doing that. It created a loophole where landlords can take away parking that is guaranteed to their tenants in their lease agreements, but I would argue that we should be targeting the real bottlenecks – zoning, permitting, and the massive delays caused by the California Environmental Quality Act (CEQA) – not pretending that taking away parking in existing units somehow counts as housing reform.
You might get a handful of ADUs, but in exchange, dozens of tenants lose parking options, which isn’t feasible. It’s like saying we’ll just cut out the requirements for developers to include bathrooms in units because it will reduce costs and save space. Sure, it might do those things, but now it’s creating unsustainable living situations, so are we really better off? Supply that comes from stripping away basic amenities isn’t sustainable housing reform and it isn’t really addressing the affordability crisis.
This is just one example that paying attention to detailed, seemingly boring housing legislation really matters, because when laws like this are passed and they compound on hundreds of other housing laws, then they affect real life in our state and kick the can further down the road for fixing the problem.
When Climate Policy Meets Housing Costs (AB 130)
And SB 1211 isn’t the only recent example. Another new law, AB 130, has just been signed this summer, and instead of lowering barriers to housing, it piles on a whole new cost by tying vehicle miles traveled fees directly into housing projects.
How do the miles on your car correlate to your mortgage payments? Well, in California, they are now directly connected! So, there is something called VMT mitigation fees – which stands for vehicle miles traveled. As we have seen in recent years, a huge policy priority of our state is to reduce greenhouse gasses. Now apparently every new housing development in the state is assumed to generate more car trips. What the VMT fees are supposed to do, in theory, is add penalties to housing developments that are expected to increase driving, and the money is supposed to then be used for projects that reduce driving demand – think building more bike lanes, funding public transportation, and oddly enough, funding affordable housing projects.[5] The intended effect is that by making car-heavy housing projects more expensive, the state hopes to push developers to build near public transit areas where VMT fees are lower.
Here's the problem: this makes housing more expensive! If you are adding more fees to development, those get passed on to the consumer, and housing is thus less affordable, it’s just simple economics. So even if you try to pass bills like SB 1211 and make the argument that you are trying to increase housing supply, you are simultaneously passing other bills that impose more and more fees, which works to have the opposite effect on reducing housing costs.
There are other problems as well, like the fact that a bill like this assumes that California already has robust public transportation options for developers to build near – which, thanks to our high crime, high homelessness rate, and general decline of our major cities, we absolutely do not have. And, regardless of that, driving usually is not optional for people, regardless of where they live! So, instead of reducing driving, VMT fees just make housing projects more expensive, with virtually no guarantee that the money actually delivers transit improvements, and all the while contributing to the housing crisis. It’s ridiculous.
Both SB 1211 and AB 130 are prime examples of layering on more and more regulations and bills and policies that all add up to create a tangled web of mixed outcomes and hidden costs. And that really is my main point here: housing policy matters because every bill introduces new requirements and costs that affect housing supply, housing costs, and residents of our state. Meanwhile, the housing crisis keeps dragging on without tackling the root problem: not enough homes being built.
Pending Governor’s Approval: SB 79
I want to look at one more bill – and this is one that hasn’t yet been signed into law! This brings us to SB 79, which highlights another kind of hidden cost: the cost of losing local control.
SB 79 is a state-imposed housing density effort. What it does is it allows developers to build taller and denser housing that is within a half-mile walking distance of public transportation. This would apply to all zones, including zones that restrict to single-family homes.[6] It is reported that this bill has been “fiercely opposed by neighborhood preservation groups, critics of market-rate development and a long list of local governments who argue that the bill tramples on local prerogatives over what gets built and where.”[7]
The crux of the issue is who has control over zoning. SB 79 completely wipes out local control over the placement of denser housing and would allow for buildings up to six stories tall in single-family zones. Former city planner John Terell, who is also part of Neighbors for a Better California, described the opposition when he said, “Local government is best able — is closest to the people — and it’s best able to judge where and where not to do certain types of development.”[8] Local governments would not be able to block or limit multi-family housing, effectively reducing local discretion over zoning decisions.
This should be concerning, because not only does it take away local control – which is a bad thing to do – but this also has the power to change neighborhoods, change neighborhood character, and increased congestion or infrastructure strain. Zoning decisions should stay local because communities understand their own infrastructure, transit capacity, and character better than the state. Not to mention that there are still hidden costs within this as greater density often comes with higher per-unit costs due to a variety of factors, like complex construction, height or mixed-use construction, or labor standards. These costs could be passed on to renters or buyers as usual.
Final Analysis
So, what have we learned here today?
First, not all “housing reform” is real reform. SB 1211 shows us that as it removes parking from tenants but doesn’t address the root bottlenecks of zoning and permitting. Just because something is labeled as housing reform doesn’t mean it’s solving the problem.
Second, hidden costs pile up. AB 130 is framed as a climate solution, but in practice, it just tacks on another layer of fees that get passed along to Californians trying to buy or rent a home. It assumes people can just stop driving, when in reality California’s transit system is nowhere near ready to support that. Legislation – every single bill that is passed and piled onto our state’s regulations – has a cost to it. We must be informed and honest about that.
Third, our state keeps reaching for control instead of solutions. SB 79 is the latest example of the state overriding local communities in the name of urban “density.” But density without infrastructure, affordability, or local input risks backfiring by changing neighborhoods without actually solving the housing crisis around us.
And the connecting point across all three is that California lawmakers keep layering regulations, mandates, and fees on top of each other instead of addressing the root causes of the crisis: overregulation, endless CEQA delays, sky-high fees, and a hostile building environment. If our leaders were serious about solving the housing crisis, they’d tackle the root problems head-on: streamlining CEQA, cutting excessive costs, and incentivizing builders to actually build homes that people need and can afford. Until the Legislature is willing to tackle those real barriers, no amount of “creative” policies will fix our housing shortage.
And so, my friends, this is why it’s so important to pay attention to housing policy — because even the boring bills that fly under the radar will shape our communities, impact our costs of living, and ultimately steer the future of California.
References:
[1] Bentz, Alex. “California Housing Affordability Tracker (2nd Quarter 2025).” Legislative Analyst’s Office, January 24, 2024. https://lao.ca.gov/LAOEconTax/Article/Detail/793#:~:text=Costs%20of%20Buying%20A%20Home,50%2060%2070%2080%2090%25.
[2] Johnson, Hans, and Eric McGhee. “Three Decades of Housing Challenges in the Golden State.” Public Policy Institute of California, December 3, 2024. https://www.ppic.org/blog/three-decades-of-housing-challenges-in-the-golden-state/.
[3] Torres, Destiny. “In Notoriously Dense Koreatown, These Tenants Are Fighting to Keep Their Parking Spots.” LAist, September 17, 2025. https://laist.com/news/transportation/koreatown-parking-tenants-501kingsley.
[4] Ibid.
[5] Walters, Dan. “New California Law to Make Housing Projects Easier Can Also Make Them Cost More,” CalMatters, September 4, 2025, https://calmatters.org/commentary/2025/09/california-new-housing-law-projects/.
[6] Christopher, Ben. “Breakthrough on California Housing Could Put Taller Buildings in Single-family Neighborhoods.” CalMatters, September 5, 2025. https://calmatters.org/housing/2025/09/california-housing-near-transit/.
[7] Ibid.
[8] Williams, Dana. “Controversial Housing Bill SB-79 Approved by Legislature, Awaits Newsom’s Signature.” NBC 7 San Diego, September 17, 2025. https://www.nbcsandiego.com/news/local/controversial-housing-bill-sb-79-approved-by-legislature-awaits-newsoms-signature/3901959/.
