How Sacramento make housing less affordable while claiming to fix it

By CHIP MONACO

PUBLISHED: August 31, 2025 at 9:05 PM PDT

California lawmakers love to talk about the housing affordability crisis, yet their actions consistently make the problem worse. The California Tax Foundation’s latest report reveals that during the first eight months of the 2025-26 legislative session, lawmakers considered increasing annual taxes and and fees by more than $16 billion, while housing costs continue to spiral out of of reach for ordinary families. 

Consider the reality facing Orange County residents today. According to the Orange County Register, California homebuying is 7% below the 2008 crash levels, with only 15% of households able to qualify for a single-family home.The median selling price for a single family home was $1.4 million in June, requiring an annual income of more than $367,000 for a typical family to afford afford homeownership. 

Yet instead of addressing the regulatory and tax burdens that drive up housing costs, Sacramento doubled down with proposals that would exacerbate the situation. Among the $16 billion in new tax proposals are fees specifically specifically targeting homebuilders—SB 130 (Vehicle Miles Traveled Fee) would impose enormous costs on the very people trying to build the homesCalifornians Californians desperately need, not to mention every user of our public, taxpayer-funded roads. 

The disconnect is breathtaking. On one hand, state officials declare housing their top priority. On the other hand, they systematically increase the costs of building, buying, and living in California through an endless parade of new taxes and fees. The Tax Foundation’s report catalogs 71 separate proposals for higher costs, including a $10 billion retroactive emissions liability on businesses, a $3.5 billion corporate tax increase, and a $1.5 billion digital advertising tax. 

This isn’t just bad policy; it’s economic self-sabotage. When businesses face new taxes, those costs end up in the prices we pay. Fees for developers get added to the price of homes. Each new regulation puts another obstacle between families and homeownership. 

The numbers tell the story of California’s failure. The statewide affordability index shows that homeownership accessibility has declined from 16% of households spending three years ago to 15% today, despite politicians spending billions on housing programs. Meanwhile, mortgage rates have nearly doubled from their historic lows, and the median home price has jumped 39% in just three years.

What’s particularly galling is the timing. The California Department of Finance reported that the state’s general fund revenue for the 2024-25 fiscal year was $2.7 billion above projections. California doesn’t have a revenue problem—it has has a spending and priority problem. 

Instead of using this surplus to provide tax relief that could improve affordability, lawmakers are actively pursuing policies that will drive costs higher. All of this is happening while OC city governments contemplate increasing sales tax to balance their budgets. 

The human cost of this policy malpractice is measured in dreams deferred and families forced to leave the state they love. All while state policymakers pose for pictures with their crocodile tears for families and affordability. When only one in seven households can afford to buy a home, and housing costs continue climbing while lawmakers pile on new taxes, California is effectively creating a two-tier society: the wealthy who can afford the state’s excessive costs, and everyone else who’s priced out. Isn’t that what they continue to fight against? You can’t build a middle class while constantly imposing policies that create a greater divide between the two.

Other states are learning from California’s mistakes. They are streamlining regulations, reducing bureaucratic barriers, and creating tax-friendly environments that attract businesses and families. If you are still wondering why why companies like In-N-Out are leaving California, wonder no more. California policymakers appear determined to make it the most expensive state in America to live in. 

The solution isn’t complicated: stop making housing more expensive through unnecessary taxes and fees. Focus on removing regulatory barriers that slow construction. Use budget surpluses to provide meaningful tax relief rather than funding ever-larger government programs and find ways to save residents money…not new programs that cost money. It requires a complete 180-degree shift in mindset.

Until Sacramento lawmakers recognize that you can’t tax and regulate your way to affordability, California’s housing crisis will continue to worsen. Families deserve better than politicians who claim to care about housing while simultaneously making it less attainable. The $16 billion question is whether voters will demand accountability for this costly charade of simply continuing continuing to struggle while politicians dance on their hardships. 

Chip Monaco is the executive director of the Orange County Taxpayers Association, representing over 15,000 Orange County taxpayers and businesses since 1971. Monaco served on the Orange City Council from 2018to to 2022.

2025 August 31