As the numbers of homeless people continue to spike across Los Angeles, the spotlight has fallen on the cost of developing affordable housing for homeless people. Initial projections were $350,000 per unit, but this estimate quickly climbed to much higher amounts. So, what could have caused this sudden spike?

A New York Times report from February 2020 revealed that building affordable housing in California cost around three times more than it would in Illinois or Texas. So while an average American home could be purchased at $240,000, one in San Francisco could cost three times as much... ~$750,000.

What could explain this vertiginous difference between the cost of houses in California and the other states? For one, it's the cost of the labor. A Los Angeles Economic Development Report revealed that prohibitively high building costs have raised the L.A County's median housing price to more than seven times the area's average income.

Labor and material costs aside, there's the issue of red tape and bureaucracy. A high percentage of the total construction budget is spent on consulting companies, necessary permits, and fees paid to municipal, state, and county bodies overlooking new development projects. An affordable housing project only becomes affordable if it obtains significant subsidies and tax credits. Moreover, it requires financing from several federal, state, and local agencies.

Senator Brian Jones, a former City Councilman in Santee, says that "It’s not compassion to continue to allow somebody to live on the street in squalor and filth and disease without giving them the appropriate services available to them." He acknowledges that the costs have increased, but maintains that these housing units must be of suitable quality for people to actually live in.

Yet another obstacle is the disproportionately overregulated California Environmental Quality Act (CEQA). The law allows anyone to object to a project, and it is often misused by those with vested interests.

It's a combination of various factors that has caused California's housing projects to be mired in years of delays and objections. Major cities like Los Angeles will need a complete overhaul of the system if affordable housing projects are to be completed on time. In the end, these homes are needed and the funds are being spent as wisely as possible, though they are not the only reforms that need to happen.