California suffers from an affordability crisis. A single fact highlights the urgency of addressing this challenge: adjusting for cost of living moves California’s poverty rate from near average to among the highest in the nation. This series explores the drivers of unaffordability in California and presents policy reforms to make the state more affordable. Policy failures are generally rooted in political failures, so we also propose upstream political and governance reforms to help affordability-enhancing measures take hold and endure.
The first installment shows that California is less affordable and poorer than it should be given the strength of our economy. California has the nation’s highest living costs, and the cost-of-living problem has worsened in recent years. California also has relatively high incomes, but its regions are systematically more expensive than similarly affluent regions in other states. We also present clear evidence linking the cost of living to high poverty and out-migration.
The second installment argues that, to make California more affordable, government must foster sustainable growth in housing and essential physical infrastructure. The contemporary cost-of-living crisis is rooted in growth restrictions that first arose in the 1960s and 1970s and have expanded over time. Growth restrictions produce, first and foremost, a shortage of housing and brutal housing costs. They also drive up the cost of other essentials like energy and transportation. Policymakers have recently sought to increase housing supply through measures like reforming environmental review and upzoning. These are steps in the right direction, but more must be done. We highlight additional policies, including regulatory reform to reduce building costs, industrial policy for construction innovation, new financing models, streamlined permitting across sectors, and stronger statewide land use planning. We also explore why undoing growth restrictions is politically challenging, and offer strategies for durable reform.
Fostering growth is paramount, but tackling high costs will also require systematically reforming regressive regulations. The third installment in our series argues that, to improve affordability, California must reduce regulatory costs that fall disproportionately on low- and middle-income residents. California has long led the nation in regulations promoting safety, sustainability, and quality. These policies can produce strong benefits. But they can also drive up the cost of essentials — costs that hit the poor hardest. This amounts to regressively funded progressivism. Worse, due to implementation failures, these regulations are often ineffective at achieving their core goals. In energy, housing, and child care, we explore how poorly designed regulations can drive up costs while producing minimal benefits. In each, we offer reforms. We also propose upstream governance reforms to durably reduce regulatory burdens on low- and middle-income residents without sacrificing progressive values.
Fostering sustainable growth and reforming regressive regulations primarily target the cost side of the unaffordability equation. But the state can also make California more affordable by improving the quality of public services and programs. The fourth installment argues that, to make California more affordable, the state must improve the effectiveness and efficiency of social spending. A high per-capita GDP and a relatively progressive tax system allow California to finance one of the highest levels of per-capita government spending in the country. Yet too often these dollars are not used effectively to help residents cope with the state’s high costs. Across three areas of social spending—affordable housing, child care, and healthcare—we show how fragmentation and complexity make it difficult for providers to perform critical work and for beneficiaries to access services. We propose reforms that standardize programs, simplify rules, and make these systems easier to navigate. These measures would improve affordability and quality of life in the short run. Over the longer run, they could increase public trust in government and support for valuable public programs.
July 31, 2026
California, with its progressive tax system and dynamic economy, has some of the highest levels of per-capita government spending in the country. But state programs systematically suffer from fragmentation and complexity. Part 4 of our white paper series argues that, to make the state more affordable, we need to streamline and simplify public programs to more effectively help residents cope with high costs.
June 18, 2026
To address its unaffordability problem, California must reform regressive regulations. Time and time again the state has pursued progressive goals through policies that raise the cost of essentials — hitting low-income residents hardest. This regressively funded progressivism is a major driver of California's high cost of living. Part 3 of our white paper series explores how these costly and often ineffective regulations work and offers a path toward durable reform.
May 14, 2026
The primary driver of California’s unaffordability and poverty is our high cost of living. And the foremost driver of high costs in California is a policy regime that makes it difficult to build the physical infrastructure we need to deliver essentials, particularly housing. Part 2 of our white paper series on making California more affordable explains the origins of growth restrictions in California, explores the implications of those restrictions, analyzes the politics of pro-growth policies, and offers a path forward to achieve sustainable growth.
