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Matthew Gagnon of Yarmouth is the chief executive officer of the Maine Policy Institute, a free market policy think tank based in Portland. A Hampden native, he previously served as a senior strategist for the Republican Governors Association in Washington, D.C.
As the entire world turns its attention to the nation’s capital for the change in presidential administrations and we distract ourselves with agonizingly obsessive coverage of it, the west coast continues to burn.
In the past two weeks, more than 60 square miles of Southern California have been destroyed by fire, wiping out thousands of homes and killing 27 people. Even though the news is now paying much less attention to the disaster in Los Angeles, the wildfires are very much still raging as California continues to try to contain the blazes.
While the crisis isn’t over yet, plans are already being made for what to do in the aftermath of the destruction, particularly as it relates to rebuilding what has been lost. Ten days ago, California Gov. Gavin Newsom signed an executive order waiving parts of the California Environmental Quality Act and the Coastal Act, seeking to make the recovery faster and less bureaucratic after the fires go out.
CEQA, one of the most notorious environmental laws in California, has been around since 1970. While it began innocently enough — it was signed by then-Gov. Ronald Reagan — it has gradually become a monstrous impediment to growth and development at a time when California needs desperately to build.
The law layers on delays and costs for new developments, far beyond what is rational. It demands environmental impact reports, public comment periods, and traffic analyses that become an open invitation for special interests to grind projects to a halt. Labor unions sometimes use the threat of lawsuits to force developers to pay higher wages, making projects much more expensive. Homeowners often lobby to block housing construction they find objectionable, empowering NIMBYs.
The net result, particularly when combined with rent control, affordable housing mandates, onerous zoning rules, and excessive permitting fees, is a smothering tangle of bureaucracy that can inflate costs and prevent development from taking place. Local governments tend to make the problem even worse with their own ordinances piled on top of the existing state rules. All of this together explains why California — like much of the rest of the country — has a titanic housing gap.
Given all this, it is obviously the right call by Newsom to suspend the onerous and unnecessary CEQA rules, in order to remove endless red tape to let people rebuild. But it does beg an obvious question: Why are these regulations necessary at all?
After all, if the rules are unnecessary when engaging in a massive development project to build tens of thousands of buildings in California’s largest city, why exactly are they necessary when a homeowner wants to put an addition on his garage? Why would a crisis justify exempting these types of rules?
I believe the real answer is disappointingly cynical, but undeniably true. Politicians love to have it both ways, casting themselves as heroic defenders of the environment while also seeking to take up the mantle of crisis manager in order to satisfy their political vanity. But it is for appearances and personal ambition, and there is very little substance in any of the political gamesmanship.
Ironically, rules like CEQA can undercut the state’s environmental goals, anyway. Slowing or canceling critical infrastructure often discourages sustainable water usage. Forced into lengthy commutes from distant, sprawling suburbs, residents rack up higher carbon emissions. Even essential infrastructure — like desalination plants or water storage — can face daunting regulatory hurdles that push costs up and slow important development.
If Newsom were serious about addressing housing affordability or preventing future wildfire damage, he wouldn’t just grant a short-term exemption — he’d make it permanent. And while he’s at it, he’d champion streamlining broader development rules, unclogging the pipeline for both housing and essential infrastructure.
The Golden State is drowning in government-imposed barriers to adequate housing. These policies warp market signals, hinder developers from ramping up supply when prices skyrocket.
And lest you think that this column is just about California, realize that Maine, too, has its own set of housing policies that make building more cost-prohibitive. I’ve long written of our own flirtations with rent control policies, which are near-universally rejected by the economics profession.
To be fair, Maine does not have a single, all-encompassing law hammering pointless environmental regulations on developers, though they do have several narrower laws like the Site Location of Development Law and the Natural Resources Protection Act, which together behave similarly. But if we’re being truthful, the real villain in Maine’s housing story is local ordinances from municipalities, which do far more harm than even the state does.
As Maine grapples with its own housing crisis, it would be wise to look at Newsom’s limited, temporary action, and learn the full lesson of what we should be doing, and not doing.
