NCPA - National Center for Policy Analysis


October 22, 2007

California's scenic beauty, mild climate and economic opportunities have attracted more than 36 million people.  But the state has been restricted by the state's high cost of living; most notably, by having the least-affordable housing and worst traffic congestion in the country, says the Georgia Public Policy Foundation.

The experience of San Jose reveals how California achieved these dubious rankings.  Amid some of the fastest-growing industries in the world, San Jose should be one of the fastest-growing urban areas in the country.  Thanks to growth-stifling plans and regulations, however, it is one of the slowest:

  • For example, during the 1990s -- a period of wild growth in the high-tech sector -- the San Jose urban area grew by a paltry 0.7 percent per year.
  • By comparison, the Las Vegas urban area grew by 6.5 percent per year, Atlanta by 5.0 percent, Phoenix by 3.8 percent and Houston by 2.8 percent.
  • Overall, some 250 U.S. urban areas, including Philadelphia, Indianapolis and even Baltimore grew faster than San Jose in the 1990s.

San Jose's slow growth is not simply the result of a debate over growth versus livability. Instead, it is the product of several little known institutions, such institutions are the local agency formation commission (LAFCo) -- which has resulted in making California's urban areas the densest, most-congested and least-affordable housing markets in the United States -- and the congestion management agency (CMA), which has raised taxes to pay for transit systems instead of highways, leading to congestion problems.

No-growth and slow-growth advocates certainly played a role in inhibiting San Jose's growth.  But they probably would not have succeeded were it not for the local agency formation commission and CMAs that, ironically, were designed to facilitate growth and relieve congestion.

Source: Randal O'Toole, "Slow-Growth Plans and Regulations Lose the Way for San Jose," Georgia Public Policy Foundation, October 19, 2007.


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