Housing advocates often argue that California’s crisis comes down to scarcity. Their story usually goes like this, we have not built enough housing, so costs rise and families get pushed out. There is truth in that. But scarcity did not appear by accident. It was manufactured through older generations – of political choices, choices that have locked generations of homeowners into wealth, pushed renters into precarity, and stripped future generations of stability.
The most glaring policy at the root of this is Proposition 13. Prop 13 has been on the books for nearly half a century, shielding older homeowners and starving local governments of money. A person in a million-dollar house can be taxed as if they bought it in the 1970s, while new buyers and renters cover the real costs. The Public Policy Institute of California has shown how the proposition froze property taxes for longtime owners and shifted the burden onto new buyers and renters. The California Budget and Policy Center has also documented how Prop 13 drained local budgets, leaving cities with fewer tools to build affordable housing. You cannot explain California’s housing crisis honestly without naming Prop 13.
Another missing piece is privatization. For decades, California handed off its responsibility for housing to private developers and politically connected nonprofits. Profit margins dictate what gets built and who gets left out. The California Housing Partnership has shown that the state chronically underfunds affordable housing and leans too heavily on private actors to fill the gap. Market rate apartments get approved, a handful of affordable units are tacked on, and the state treats public housing like a relic. Scarcity is not natural. It is the outcome of policy that treats housing as an investment first.
And then there is race. California’s housing market has never been race neutral. Redlining, restrictive covenants, urban renewal, and freeway construction targeted Black and brown neighborhoods, stripping wealth and erasing communities. Research from UC Berkeley’s Othering and Belonging Institute shows how segregation and exclusionary zoning continue to shape California’s housing patterns today. To talk about housing without acknowledging this history is to tell only half of the story.
Some call this new emphasis on deregulation “supply side progressivism.” It is telling that supply side arguments once belonged to the right but are now embraced by parts of the left. That shift says less about abundance and more about our society’s failure to deliver equity through other means, taxing the ultra-rich, universal healthcare, rent stabilization, living wages, childcare. Instead, deregulation has become the substitute. Neoliberal politics have morphed into supply side progressivism because it still favors the wealthy. In housing, that means windfalls for developers and investors. California shows the limits of this theory. Scarcity here is not just zoning. It is Prop 13. It is privatization. It is racial exclusion. A narrow focus on deregulation ignores the deeper structures that keep inequality in place.
This push for deregulation in California is often framed as part of the “abundance” movement and is embodied in legislation SB 79, which would allow mid-scale housing near transit without drawn-out local approvals. Abundance advocates are right that we need more housing, and SB 79 could chip away at local obstruction. But abundance alone is not enough. Without tackling Prop 13, privatization, and the racial exclusions that shaped today’s market, abundance risks becoming another slogan that delivers units without delivering equity.
Finally, too many housing arguments stop at rental apartments and ignore homeownership. Apartments are necessary, but they do not replace pathways to stability and wealth building. The Urban Institute has shown how racial gaps in homeownership remain one of the biggest drivers of the wealth divide in California. A renter economy without ownership keeps inequality locked in, no matter how many units get approved.
California’s housing crisis cannot be solved by apartments alone, and it cannot be reduced to the language of scarcity. We need to reckon with Prop 13. We need to confront privatization. We need to face the racial history that produced today’s inequities. And we need to create real paths to ownership, not just more leases.
The state of California cannot keep outsourcing housing to developers and hoping supply will trickle down. We need to bring public housing back in a serious way. Not the isolated, stigmatized projects of the past, but models of social housing that are mixed-income, well-maintained, and publicly owned. Other countries do it, and so can we. Without public investment at that scale, every other fix is just a patch.
Anything less is not reform. It is convenient. And convenience is what got us here.
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