California’s push to make housing more affordable is facing a familiar obstacle: getting new homes built, even as state laws seek to encourage development.
Macro Trends Advisors founding partner Mitch Roschelle told FOX Business’ Stuart Varney on “Varney & Co.” about the bureaucratic hurdles facing California builders and how the state’s approach compares with Florida’s.
Roschelle said he had invested in a company working to build affordable housing in Los Angeles. The project sought to use legislation signed by Gov. Gavin Newsom that allowed additional housing units on certain properties without rezoning, but Roschelle said regulatory obstacles made the effort difficult.
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“The reason why that company had a really, really hard time is the amount of red tape, which we should probably call blue tape because there’s nothing red about it, right? The amount of blue tape that takes place in California, especially in Los Angeles, especially post the fires is absurd,” Roschelle said.
While allowing more units on a property can create opportunities for development, it does not guarantee new homes will be built. Builders still face regulatory hurdles before construction can begin.
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Roschelle argued that bureaucracy, including decisions made by unelected officials, has made construction especially challenging in Los Angeles. He contrasted those hurdles with Florida, where he said potential property tax changes were encouraging some prospective buyers to act before the end of the year.
But he cautioned that the activity in Florida does not mean the broader U.S. housing market is turning a corner. Roschelle said borrowing costs remain a major barrier to improvement.
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“I think the only thing that’s going to be a big help is lower interest rates,” Roschelle said.
