Later that month, Democrats in Illinois, New York, and Maryland proposed new congressional maps to counter Democrat seats expected to be lost in Republican-led states. Republicans also pushed further to strengthen their numbers in other states including Florida, Indiana, and Missouri.

California’s redraw was ultimately left for the public to decide on, as voters headed to the polls on Nov. 4 to decide on Proposition 50. Over 64% of Californians voted in favor of the redraw.

This essay has been adapted from one that first appeared in the Thesis Driven newsletter.

No state has passed more pro-housing legislation over the past decade than California. From streamlining multifamily entitlements to legalizing lot splits to enabling conversions of commercial assets, the state has passed a wave of laws aimed at unblocking housing development. And it doesn’t appear to be stopping soon, with recent changs removing environmental-review barriers for housing and upzoning near transit.

Yet California’s issuing of housing permits—for both single and multi-family development—has continued to sag. While interest rates and development costs have surely played a role in keeping construction subdued, the lack of market response to the state’s broad-based reforms raises questions about the efficacy of those reforms.

Since 2017, California has passed dozens of laws at the state level aiming to encourage housing production, particularly in California’s most expensive metro regions: Los Angeles, San Diego, and the San Francisco Bay Area. In general, these laws attempt to force municipalities to allow higher-density development, including by legalizing backyard units and duplexes within low-density zones or unlocking mid-rise development near transit.

California’s development landscape is complicated by the fact that most metros are composed of many small cities, each of which controls its own zoning. While New York City consolidates 8.5 million people and more than 300 square miles under one jurisdiction and zoning code, the San Francisco Bay Area has no fewer than 101 municipalities serving 7.7 million people.

This fragmentation creates a kind of “tragedy of the commons” when it comes to housing. While more housing benefits the entire metro area, the cost of new infrastructure falls on the specific city that’s building that housing. Hyper-local governance also makes elected officials more vulnerable to hyper-local NIMBY (“not in my backyard”) populism.

The end result is that nobody wants to authorize building, creating a devastating housing shortage that is driving people out of California. The state is projected to lose four electoral votes after the next Census, so its cities’ reluctance to build is having real political consequences.

The solution, in the view of housing advocates and key legislators, is to take housing decision-making out of the hands of municipalities through state preemption, essentially forcing cooperation.

I’m not going to get into the weeds of each California law that has been passed over the past decade, but a few notable examples include:

• Accessory Dwelling Unit Reforms: Starting in 2016, California passed a series of reforms (SB 1069 and SB 229, among others) that made building ADUs in the state far easier, preempting local restrictions and removing owner-occupancy requirements.
• SB 35 (2017): One of the first big state multifamily housing bills, SB 35 gave teeth to city-level housing production goals by streamlining approvals in cities that were not meeting the targets. However, the law came with below-market-rate and union-wage requirements.
• SB 9 (2021): SB 9 allows California homeowners to split a single-family lot into two parcels and build up to two homes on each, effectively permitting up to four units where only one was allowed before.
• AB 2097: This measure prohibits cities from requiring parking on new development with 0.5 miles of a transit stop.

Other legislation enabled conversions of commercial buildings, prohibited downzoning, introduced a permit “shot clock,” and limited abuse of environmental- review laws, among other things—a wish list of reforms that would, ostensibly, make building housing more appealing to California developers.

Unfortunately, the housing market has been unresponsive. While there’s no way to know how many units would’ve been built without these reforms, multifamily development in California has been sluggish at best.

Only 38,362 multifamily permits were issued in California in 2024, a decline of more than 24 percent from the prior year and below pre-pandemic norms. By comparison, Dallas alone has seen almost 18,000 multifamily permits issued over the past year despite having a fraction of California’s population.

Earlier this year, a damning report from YIMBY Law, a housing advocacy organization, noted that the raft of state housing laws has had “limited to no impact” on California’s housing supply.

“You can think of housing policy as being an elaborate mesh forming a net,” explained Laura Foote, executive director of YIMBY Action, another advocacy group. “You can pull out threads, but there’s still a lot of remaining threads left in the net. But that doesn’t mean we should stop pulling the ropes.”

The YIMBY Law report points to continued intransigence from municipalities as one driver of the laws’ ineffectiveness.

“The default assumption is that cities are going to figure out some way to say no, and all that dampens the impact,” said Foote.

In many cases, cities must be sued into compliance with state law—an unappealing prospect to most developers, who must work with local officials. Foote told Thesis Driven this past summer that she’d like to see more developers fight recalcitrant municipalities in court, but many developers want to avoid getting into legal battles with their host cities. Cities, after all, have many ways of making a builder’s life miserable.

YIMBY Law’s report also highlighted one flaw in many of the state’s housing preemptions: costly mandates that make projects financially unworkable.

In California, legislative progress on housing has been driven by housing advocates in tandem with organized labor and (at times) pro-tenant groups. From a political standpoint, this coalition has gathered enough heft to pass legislation in the face of opposition from environmental organizations, cities, and other NIMBY groups.

But to win the support of coalition partners, housing legislation often includes caveats and requirements that make actual development less feasible. Foremost among these are prevailing-wage and labor requirements.

“Union construction is extremely expensive, and institutional capital shies away from it,” said Zachary Streit, president of Priority Capital Advisory, a Los Angeles-based real-estate capital-markets firm. “You may think you’re doing something to help the worker base, but when capital leaves, it’s not clear how you’re helping anyone. You’re not creating jobs and you’re not creating housing.”

Many pro-housing laws such as SB35 also included requirements for below-market rate (BMR) housing, mandates that effectively require that market-rate rents be high enough to subsidize lower-rent units. These rules compound the problems housing developers are already facing in elevated interest rates and construction costs.

And cities, of course, can come up with their own creative barriers to housing development. Los Angeles, for instance, passed Measure ULA (the misleadingly titled “mansion tax”) in 2022, which imposes a tax of 4 percent—escalating to 5.5 percent—on all property sales above $5.5 million, which includes most multifamily buildings. A report by UCLA’s Lewis Center estimated that Measure ULA alone cut multifamily development in L.A. by 18 percent.

But simply explaining developers’ lack of enthusiasm for California as a matter of pro formas and underwritten yields misses a perhaps larger point: the state is increasingly seen as a risky and unfriendly place to build.

If one speaks to multifamily developers in Los Angeles, the biggest issue that comes up is not zoning limitations, parking mandates, or even Measure ULA. It’s the Los Angeles Department of Water and Power (DWP), the city’s public utility.  DWP has gained notoriety among multifamily developers for extensive delays in installing and connecting the utilities essential for leasing buildings.

“We’re sitting on a finished [building] with 176 units that was supposed to have power in April 2024,” wrote developer John Otter on X last month. “It’s Oct 2025 and no power. A $900k estimate was given by DWP to run a line to our project. We received the bill; it’s $3.3M.” Anecdotes like this from real-estate developers are depressingly common.

Developers also point to Covid-era eviction moratoria and the specter of rent control as contributing to the negative environment.

“California has trended very anti-business, very anti-developer,” said Streit. “It’s very unfriendly from both a political and tax perspective. It makes capital very wary of investing here.”

While Proposition 33, which would have allowed municipalities to enact broad rent controls, was soundly defeated at the ballot box last November, the mere prospect of rent-control-by-referendum is enough to spook some investors.

“I’m from here. It has the best weather, the world’s best tech engine. It’s wild that we can’t attract institutional capital. It’s criminal the deals are getting done in the Sunbelt and not here,” Streit said.

“Institutional capital has now redlined L.A. No one will capitalize and build rental housing in the city going forward,” said Otter. “At the institutional capital and apartment developer level, it’s a small world, and we’re all communicating. Capital and developers don’t need to build in L.A. We can build anywhere,” he added.

While Otter’s comments are focused on Los Angeles, not California as a whole, L.A. represents a significant percentage of California’s unmet housing demand. And the hostility and barriers that developers face in Los Angeles are present in various forms in other cities. The vibes are bad for housing development in the Golden State.

Institutional real-estate investors are inherently conservative people, and real-estate investing is far more art and less science than many in the industry like to believe. After all, a project planned today may come to market in seven years and stabilize in a decade, and anyone who tells you what the market will look like in a decade is lying. So investing (or not) on the basis of vibes is less silly than it may initially appear.

“Folks in the institutional investor world, they want rules to be the rules—otherwise how can you make that massive investment?” added Foote.

Unfortunately for housing advocates, vibes are hard to fix. But perhaps lessons can be drawn from one category of housing that has been meaningfully unlocked by regulatory change: accessory dwelling units, or ADUs.

The rise of ADUs in California provides a compelling counterexample to sluggish multifamily development. Since the state’s first ADU reform passed in 2016, the number of units produced per year has risen from under 2,000 to many tens of thousands. In 2023, Los Angeles County permitted more than 45,000 ADUs, significantly outpacing multifamily permitting.

“What’s great about ADUs is that you have one set of rules that apply throughout the entire state,” said Foote.

ADU legislation also avoided the baggage that dogged other state-level housing legislation: accessory units don’t come with wage requirements, and they (mostly) avoid below-market rate and rent control mandates. An investor can buy a house and build an ADU in the backyard with any labor willing to take the job and rent it at any price a tenant is willing to pay, which cannot be said for most multifamily development unlocked by state law.

These distinctions are due in part to ADU developers being less appealing targets than institutional multifamily builders for both organized labor and tenant advocates. “Build an 800-square foot structure in a backyard for $400,000” isn’t the kind of project that gets union leaders excited, and ADU owners—often portrayed as individual homeowners—are more sympathetic figures than Greystar or Blackstone.

This soft-handed regulatory treatment has unleashed a minor boom in ADU development, a wave largely led by small-scale developers and investors—neither single homeowners nor institutional behemoths but hands-on operators building a handful of units at a time. In this respect, the ADU phenomenon may represent a model approach for fixing California’s housing laws.

“How do we build back the cottage industry of building 3-15 unit buildings?” asked Foote. “That industry got decimated and went into kitchen remodels and has to be coaxed back into housing.”

In a sense, small-scale developers are poised to benefit the most from California’s housing liberalization. Small projects have fewer burdensome requirements, and they’re less likely to draw the ire of local NIMBYs and officials for using state housing preemptions. But the sheer number of state housing laws is confounding, and the overlap of people who fully understand how the laws can be applied and who develop small multifamily buildings is tiny.

Of course, California is not attempting to legalize its way to abundance in isolation. Other states, such as Texas and Montana, have passed aggressive pro-housing legislation in recent years. Steven Stenzler, a senior policy advisor at Brownstein, sees this as a positive for pro-housing efforts in California.

“It shows it can be done, and it’s a great foil when talking to legislators,” Stenzler said. “‘Are you gonna let those guys beat us?’”

Foote believes it is only a matter of time before developers see the opportunity and put negativity aside.

“Right now, California is an undervalued asset,” said Foote. “The undervalued part is because the only people who understand how to put the laws together [to build housing] are a few elite land-use attorneys.”

Foote predicts that developers—particularly small-scale builders—will find gold in California once again as word of new housing laws spreads.

“Have faith in the market,” she said.

Photo by Mario Tama/Getty Images

SALT LAKE CITY — A Utah woman has been reported missing for nearly a week from a county in central California.

The Santa Cruz County Sheriff’s Office said Danielle Staley, 35, of Holladay, was last seen near Rio Del Mar State Beach last Thursday night, Nov. 6.

She stands about 5-foot-6, with blond hair, and was last seen wearing a dark hooded sweatshirt and leopard-print leggings, police said.

According to Zach West, spokesperson for the sheriff’s office, Staley had been traveling with a friend for over a month — the pair arrived in the Santa Cruz area, near Aptos Beach in Rio Del Mar about a week ago.

On the night of Nov. 6, about 11:30 p.m., Staley and her friend had met some people at the beach and had a bonfire; the friend somehow separated from the group, and Staley couldn’t be found the next day, though her belongings were still on the beach, West said.

The woman hasn’t had contact with her family or friends, which West said was “out of character for her.”

Detectives are trying to piece together and identify others who were at the beach; they are also working with local businesses to scour surveillance footage that may present some clues, according to West.

He said numerous people have called claiming to have seen Staley, and detectives intend to follow up on those tips.

As of now, police said they don’t have any indication that she has traveled outside of the county, so the Santa Cruz Sheriff’s Office is the only agency investigating right now.

Staley’s friend is said to be cooperating with police.

Those with information are asked to call the Santa Cruz Sheriff’s Office at 831-471-1121.