How California Turned Against Growth

Even before it became a state, people migrated to California in search of a better life: for jobs, the chance to become rich and famous, or simply the comfortable climate and beautiful landscape. From prospectors hoping to strike it rich during the gold rush, to actors dreaming of becoming Hollywood stars, to Okies looking for work during the dust bowl, to entrepreneurs creating startups in Silicon Valley, the California Dream attracted people by the millions. Cities like Los Angeles and San Francisco quickly grew from nearly nothing to become some of the largest U.S. metros. Between 1900 and 1970, California had the greatest population increase of any state (going from the size of Kansas to surpassing New York as the most populous state), and the second-highest rate of population growth (barely behind Arizona’s). For over a century, California was a growth machine.

But starting in the 1960s, California began to put the brakes on its growth machine. New housing became increasingly difficult to build, and investment in the infrastructure needed to support it collapsed. Home prices shot up, becoming some of the highest in the nation. California’s population continued to increase, but more slowly than it had.

How did this happen? Decades of growth began to strain the environment that had attracted people to California in the first place. Residents found themselves surrounded by polluted water, poisoned air, and a destroyed landscape. Views and natural beauty were increasingly spoiled by overhead power lines, outdoor advertising, freeway overpasses, and thousands of identical houses. Infrastructure like roads, schools and sewer systems were stretched to their breaking point. Crime was rising, and neighborhoods of single-family homes with largely white residents were being encroached on by apartment buildings housing the poor and minorities. In response to this unwanted change, Californians began to create land-use restrictions that would curb growth, help stop environmental harm, and limit the influx of new residents. When this drove up property values, Californians then passed Proposition 13, which cut property taxes, reduced the government’s ability to fund services, and locked in the low-growth culture that had taken root.

The California boom

California was born in the throes of rapid growth. When the U.S. took control of California following the Mexican-American War in 1848, California had perhaps fewer than 10,000 people living in it. But when gold was discovered that year at Sutter’s Mill, people raced to California by the thousands in the hopes of striking it rich. In less than four years, California’s population rose from less than 10,000 to more than 250,000. San Francisco, which didn’t exist at all in 1846, became a teeming metropolis of almost 35,000 people by 1852, built in part by dragging abandoned boats onto shore and using them for warehouses, hotels, and saloons. By 1870, San Francisco had become the 10th largest city in the U.S.

This growth gave rise to what historian Hubert Bancroft describes as a “rapid, monstrous maturity.” Just two years after the discovery of gold, California became a state, bypassing territory status completely and joining the union decades before it might have been expected to. North Dakota, Nebraska, and Colorado, by contrast, spent 28, 35, and 15 years respectively as territories. The completion of the Transcontinental Railroad in 1869, which reduced the time it took to reach California from the east coast from months to days, spurred even further growth. When Los Angeles was connected to the Transcontinental in 1876, it quickly became the fastest growing city in the U.S. Between 1860 and 1880, California added almost half a million people, more than doubling its population.

For years mining would be California’s largest industry, but new arrivals quickly discovered that California’s climate was excellent for agriculture. An 1851 agriculture fair in San Francisco displayed fruits and vegetables that were “three to four times the weight of comparable products in the east.” By 1869 agriculture employed more people than mining, and by the mid-1870s there were ten times as many sheep in California as there were people. Agriculture would surpass mining as the largest industry in California in 1879, and continue to dominate its economy into the 20th century. In 1900, more fruit was produced in California than any other state.

The next great California industry was oil. The first large California oilfield was discovered near Los Angeles in the 1890s, and by 1910 California was producing 73 million barrels of oil a year – more than any country outside the U.S., and more than 20% of total world production. California would lead the U.S. in oil production until 1927, when it was surpassed by Texas.

Though it was growing quickly (doubling in population every 20 years), at the turn of the century California still had a comparatively small population, especially given its size. California’s population in 1900 was just under 1.5 million, making it the 21st largest state in the country, slightly ahead of Kansas and slightly behind Mississippi.

But California’s rapid growth continued. Over the next 40 years, California more than quadrupled in size, to just under 7 million people. Its industries continued to burgeon. Agriculture output increased as California adopted mechanized farming techniques and focused on more valuable crops: between 1860 and 1930, the inflation-adjusted value of California agriculture increased by a factor of 25. The opening of the Panama Canal in 1914 increased traffic to west coast ports, and Los Angeles soon became the 4th largest port in the country. California’s mild climate, flat expanses of desert, and lack of unions made it a perfect place for aircraft testing and manufacturing, and aviation became a major industry. By the 1920s Los Angeles had 1/3rd of the aircraft traffic in the U.S., and by the 1930s it was its largest center for aircraft manufacturing. More than half of major aircraft manufacturers were located in California, and the state produced more than three times as many aircraft (by value) as the next largest aircraft-producing state.

The early 20th century was also when California’s movie industry took off. California’s climate and its varied geography made it the perfect place for filming movies, and Hollywood became the center of the U.S. film industry. By 1940, the U.S. had more than 17,000 movie theaters, showing mostly Hollywood-produced films. In the late 1930s 75% of U.S. films, and 65% of films worldwide, were made in Hollywood. California also had major industries in things like fishing, car manufacturing, and tourism, and the U.S. Navy and Marines were also major employers. By 1940, California had become the 5th most populous state.

Shooting locations in California for simulating various parts of the world.

Accommodating this growth required building enormous amounts of infrastructure. In 1913 after six years of construction, the Los Angeles Aqueduct — 235 miles of “canals, conduits, tunnels, flumes, penstocks, tailraces, and siphons” — opened, bringing water from the Owens River into the city (a crowd of 40,000 people cheered its dedication). To supply water to San Francisco from the Tuolumne River, a system of four dams, five reservoirs, 60-plus miles of tunnel, and 100 miles of piping were built between 1919 and 1934. To relieve ever-rising ferry traffic (in the 1920s the San Francisco Ferry terminal was the second-busiest in the world, after London), a series of bridges were built in the Bay Area: one across the Carquinez Strait in 1927, another between San Mateo and Hayward in 1929, the Bay Bridge in 1936, and the Golden Gate Bridge in 1937. The Caldecott Tunnel was bored through the Contra Costa mountains in 1937, and the Arroyo Seco parkway — one of the first freeways in the U.S. — was completed in 1940. A plan for an international exposition, to be eventually turned into an airport, resulted in the creation of Treasure Island in 1939, built by dumping 260,000 tons of rock onto the shallow and hazardous Yerba Buena shoals. In 1936, the enormous Boulder Dam was completed (later renamed the Hoover Dam), and canals and power lines carried its water and electricity away to southern California.

World War II further spurred California’s growth. California’s aircraft industry expanded enormously to help produce the 300,000 planes the U.S. built during the war, and aircraft manufacturers staffed huge new plants with tens of thousands of new workers. Los Angeles and San Diego produced twice as many aircraft as any other region in the country. California shipbuilding similarly expanded, with Henry Kaiser’s shipyards at Richmond building unprecedented numbers of Liberty and Victory Ships. Kaiser’s Richmond shipyards, along with shipyards in Oregon and Washington, built 30% of U.S. ships during the war. To finance this construction, the federal government spent more than $35 billion on defense plants and other military expenditures in California, putting California third in federal wartime expenditures behind New York and Michigan. California’s wartime manufacturing output increased by a factor of 2.5. This increase required massive numbers of new workers, and during the war 1.3 million people moved to California. San Diego doubled in size from 200,000 to 400,000, Richmond grew from 24,000 to 100,000, and San Francisco grew by nearly 40%.

After the war, California’s growth continued. An estimated seven million soldiers had spent time in California for training, defense plant work, or as a staging point for transport to the Pacific. Many of them, drawn to California’s beaches, natural beauty, and mild climate, decided to return and stay following the war. The Cold War ensured a steady flow of federal dollars to California’s aerospace industry: LA alone had 40% of the country’s aerospace contracts in the 1950s. Defense funding also stoked California’s burgeoning electronics industry, which had already been nascent before the war, giving rise to Silicon Valley. Prior to WWII, California had been the 6th largest state by manufacturing output: by 1958, it was second behind New York. And the growth wasn’t limited to industry: people flocked to the state by the millions in search of jobs, or to escape harsh winter climates, or to live in its beautiful surroundings, or simply because they heard that “everybody with ambition was coming West.” Even the baseball teams were coming to California: in the 1950s, the Dodgers and the Giants left New York for LA and San Francisco respectively. Between 1940 and 1970 California’s population nearly tripled, and in 1962 it surpassed New York to be the most populous state in the U.S.

Accommodating the 13 million people California added between 1940 and 1970 required an unprecedented amount of home construction. Prior to the war, most home builders had been small-scale, building a few homes a year on individual lots. During the war, homebuilders like William Levitt, David Bohanon, and Henry Doelger were forced to develop methods to build large numbers of homes extremely rapidly to house defense workers. When the war was over, they applied their hard-won experience to building vast numbers of private homes in huge housing developments. 3,000 homes were built at San Lorenzo. 6,500 homes and 3,000 apartments were built at Westlake. 3,000 homes in Panorama City, 3,000 homes in North Highlands, and another 3,000 in Linda Vista. 2,000 homes at Hillsdale. At Lakewood, 17,000 homes were built in just 3 years between 1950 and 1953. Ross Cortese built 3,800 homes in three years in Los Alamitos, and followed it up with more than 20,000 units of retirement housing in three California “Leisure Worlds” in the 1960s. At Brewer Island, 22 million cubic yards of sand were dredged from the Bay to raise the level of the island and create the 3,000 acre Foster City, which today houses more than 30,000 people. 

Lakewood homes under construction.

In Los Angeles, post-war demand was so huge that virtually the entire city became one large housing factory. In his history of merchant building, Ned Eichler notes that “Many of the manufactured items used in a tract house…were made right in Los Angeles. The market was so large and so consistent that subcontractors, suppliers, and manufacturers, could achieve economies of scale selling only in this metropolitan area”:

“It was as if the country had been tilted to slope west and slightly south with a strainer around metropolitan Los Angeles. Through that strainer came not only a great many customers, but the hardest driving, most competitive, and most imaginative men in the nation to build houses for them. The result was a system of merchant building, including subcontractors, manufacturers, and suppliers, unequaled anywhere else.” – The Merchant Builders

In the 1950s and 60s, California’s growth continued to demand the construction of huge amounts of infrastructure, along with homes. In the 1950s and 60s, $10.5 billion was allocated towards new freeways and expressways, designed to, in the words of pro-growth governor Pat Brown, “connect every county seat and every city of 5000 or more people, serve every major industrial, agricultural, and recreational region, and return an estimated two dollars in benefits to highway users for every dollar invested.” For the Central Valley Project, a huge water management project begun in 1935, four huge reservoirs were constructed to provide water for agricultural and municipal use. They were followed by the even larger Central Water Project, a system of “sixteen dams, eighteen pumping stations, nine power generating plants, and hundreds of miles of aqueducts, canals, and levees.”

Construction of canal in California in the 1940s.

Education infrastructure was also expanded. California built new classrooms at the rate of 20 a day to accommodate the 200,000 new elementary and high school students arriving yearly. Between 1957 and 1966, nine new state colleges were opened; the University of California system expanded from two major campuses and two medical schools to eight campuses and five medical schools. The University of California had by the 1960s become one of the best university systems in the world, described by journalist Peter Schrag as “an enterprise so vast, ambitious, and all-encompassing that it awed even those who created it.” By 1963 California was home to more than a third of the country’s Nobel Prize winners in science.

Up through the 1950s, this immense growth was mostly cheered and championed by California’s residents and local governments (though then, as now, there was often local opposition). A 1939 Works Progress Administration guide to California noted, “The Californian of today feels a personal pride in the State’s gargantuan public works: highways, bridges, dams and aqueducts. And most of all, of course, he exalts in the region’s happy future.” Californians eagerly anticipated when their state would surpass New York in population (a large, constantly updating electric sign displaying the relative numbers was erected on the Bay Bridge.) There was often a “cheerful willingness” to raise taxes and pass bond issues to fund the new infrastructure, and local business interests supported a high rate of population increase. Ned Eichler, of California builder Eichler Homes (owned by his father), noted that there was a great deal of negotiation involved in requirements for things like street widths, house frontage, and sidewalk requirements, and that “belief in progress and enterprise, reinforced by a powerful appeal from a determined man, was usually just enough to bring the scale down on the merchant builder’s side”:

“Underlying the myriad of contests for zoning favorable to builders was an historical American attitude. Private enterprise…was deemed virtuous [and] it was difficult to resist the claim of men like Bill Levitt, Dave Fox, or Joe Eichler that they were acting in the best American tradition.” – The Merchant Builders

Eichler goes on to note that it was “rare” that his father lost a zoning fight, and city councilmen often felt embarrassment when they sided with opposition to vote “no.” As late as the mid-1960s, local governments were making plans for more growth. Pat Brown, governor of California from 1959 to 1967, believed “in the absolute destiny of California to grow.”

The costs of growth

But unfettered growth hadn’t come without consequence. Since the days of the gold rush, growth in California came at the expense of the landscape and the environment. Six years after the discovery of gold, the landscape surrounding the motherlode was “scarred and devastated” from mining operations. Following the development of hydraulic mining, which uses high-pressure water to break up rocks, entire mountains were torn apart, and the resulting silt and debris clogged the rivers. The large-scale water projects that brought water to cities and farms flooded ravines, drained lakes, and destroyed ecosystems. Diverting water from the Owens River to Los Angeles dried up the formerly-fertile Owens Valley, and large-scale water diversion caused Buena Vista Lake and Tulare Lake to dry up. Damming of the Tuolumne River to provide water for San Francisco flooded the Hetch Hetchy Valley. Conservationist John Muir, who had fought against the dam, lamented that “These temple destroyers, devotees of ravaging commercialism, seem to have a perfect contempt for Nature." In 1905, a canal dug from the Colorado River to the Imperial Valley overflowed, causing an enormous flood which only stopped when the Southern Pacific Railroad filled the breach with 2,500 carloads of rock and gravel. The result of the flood, the Salton Sea, has today become an “environmental disaster” due to steadily increasing salinity. In 1928, the St. Francis Dam collapsed, causing a flood that killed 400 people and destroyed everything in its path as the water rushed out to sea. In 1940 the Los Angeles River, one of the city’s major amenities, was turned into a concrete channel to protect the surrounding areas from flooding.

Los Angeles River.

Wildlife was also affected by growth. Due to the rise of the fishing industry (which grew by a factor of five between 1919 and 1933), and from damming rivers and streams, fish suffered most. Between 1910 and 1930, the number of salmon in the Sacramento River fell by 80%. In the mid-1930s, 750,000 tons of sardines were being caught annually off the California coast, but the industry was completely wiped out by the end of the 1960s, in part due to overfishing. (Sardine levels later recovered, only to suffer another collapse in the early 2000s.)

The costs of growth became especially visible following WWII, as millions of people poured into the state. Harvests of California’s majestic redwoods rose to “unprecedented levels” to provide lumber for new housing, and by the end of the 1950s, 90% of California’s redwood belt had been chopped down. Air pollution from industry and millions of cars created a lingering “smog” in cities like Los Angeles and San Francisco that poisoned the air and blocked off views: smog attacks were so common by the 1960s that they were reported by the news along with other weather announcements. Sewage was regularly dumped into lakes and rivers: in 1961 an estimated 250 million gallons of sewage was dumped annually in the San Francisco Bay. Developers regularly made plans to fill in thousands of acres of the Bay to make more land, to the point where many worried it would be turned into a narrow shipping channel just wide enough for ships to pass. In 1969, a blowout from an offshore platform created an oil spill off the coast of Santa Barbara, killing thousands of animals and polluting more than 30 miles of beaches. Excessive pumping of groundwater for agriculture had caused the land to subside by tens of feet in some locations, and excessive irrigation had deposited minerals and other pollutants in the soil.

Smog in Los Angeles, 1960s.

By the late 1960s, concern about the ongoing ruination of California was garnering more and more attention. Books like How to Kill a Golden State, The Destruction of California, and The Future of San Francisco Bay appeared decrying the ongoing destruction. “California Tomorrow," an organization that advocated conservation and land use reform, formed in 1961 and published polemical anti-growth books like California: Going, Going…, The Phantom Cities of California,” and The Federal Threats to the California Landscape.

Much of this concern was about the aesthetic effects of ongoing growth. Many people had moved to California to be surrounded by natural beauty, not billboards, neon signs, traffic congestion, and thousands of identical “ticky tacky” houses. How to Kill a Golden State devotes as much space to issues like ugly overhead wires, concrete overpasses, ubiquitous advertising and mass-produced suburban housing as it does to environmental issues like smog and sewage. Likewise, much of California Tomorrow’s ire was focused on “slurbs” (a portmanteau of slums and suburbs) the group felt were increasingly dominating the landscape.

There were also less sympathetic reasons that Californians began to oppose growth and the arrival of new residents. While California had traditionally been a bastion of single family homes, by the late 1960s construction had shifted to building large numbers of apartments, which would inevitably be occupied by low-income residents. This was “perceived as a categorical threat to the detached culture of low-density residential life.” One California housing expert noted that “one of the most cherished property rights in our ‘free enterprise system’ is not the right to do what one pleases with one’s property, but the right to live in a neighborhood in which no more multi-family housing may be constructed."

Opposition to growth also stemmed from the fact that while California had historically been mostly white, new residents were increasingly foreigners and minorities. In 1965 the U.S. removed quotas on immigration based on national origin, and subsequent immigration reforms created a path for previously illegal immigrants to become legal residents. In 1960 only 1.3 million of California’s ~16 million residents were foreign born, and only 8% of residents weren’t white. By 1970, the non-white fraction had risen to 12%, and by 1996 it had reached 51%. Between 1950 and 1970, San Francisco fell from 89% white to 71% white. And during the 1960s, minorities began to be bused from urban schools to suburbs as part of an effort to fight segregation. Opposition to school busing had become one of the most important political issues for California residents by the 1970s, fought by citizen advocacy organizations like FORCE and BUSTOP. Increasingly, Californians were desiring control over their neighborhoods and cities, to preserve the landscape and to keep unwanted elements (including the wrong sort of people) out.

Concern about apartments, busing, and the changing urban fabric was likely partly stoked by rising crime rates and civil unrest. California’s violent crime rate doubled between 1960 and 1970, and by 1980 had doubled again. In the 1960s urban riots rocked cities around the country, and California wasn’t immune: in 1965 the Watts riots in Los Angeles resulted in 34 deaths and 1000 injuries, and entire city blocks were burnt to the ground.

Residents’ desires to stop the changes that were happening to their homes and communities made them natural allies for the rising environmental movement, which had deep roots in California. John Muir became known as the “father of the national park system” after advocating that Yosemite in California be protected as a national park, and was one of the founders of California conservation group the Sierra Club in 1892. Protests against flooding the Hetch Hetchy Valley in the early 20th century have been characterized as the founding moment of the modern environmental movement. Similarly, the origins of the U.S. anti-nuclear movement can be traced to protests against California’s Bodega Bay nuclear power plant. But while California was a bastion of environmental activism, the movement quickly became popular nationwide. By 1970, 25% of the country saw pollution/ecology as an important problem, up from 1% in 1960. That same year there were over 8000 environmental bills introduced in congress.

The environmental movement had (and continues to have) strong anti-growth elements. Growth inevitably meant more landscape demolished to put up homes and factories, more pollution in the air and water, more oil spills and nuclear power plants. The 1968 anti-growth book The Population Bomb was written at the request of Sierra Club executive director David Brower, and the co-founder of Greenpeace Rex Wyler later became a major advocate of the “degrowth” movement. By the late 1960s, these tendencies within the environmental movement intertwined with grassroots opposition to growth, and began to clamp down on development in California.

The pivot to anti-growth

As the environmental movement gained strength, it started to rack up successes in preserving California’s landscape and stopping what were seen as harmful developments. In 1961 a group of San Francisco residents formed “Save San Francisco Bay," whose advocacy resulted in the city forming the San Francisco Bay Conservation and Development Commission in 1965, dedicated to “the protection, enhancement and responsible use of the San Francisco Bay." In 1968, advocacy from groups like Save the Redwoods resulted in the creation of Redwood National Park. In 1972, to protect the coastline, California formed the Coastal Zone Conservation Commission, which had the power to stop or regulate development within 1,000 yards of the shore. In 1970, the California Environmental Quality Act (CEQA) was passed, a far stronger statewide version of the federal National Environmental Policy Act (NEPA) passed in 1969. While NEPA only forced the environmental impacts of a project to be considered (not necessarily addressed), CEQA required “all feasible measures to mitigate those impacts." And while NEPA only applied to federal government projects, CEQA ultimately applied to both public and private projects within California. By 1976, 4,000 CEQA-mandated environmental impact reports were being produced each year, four times the number of impact reports produced by the federal government.

These environmental efforts quickly became powerful weapons for slowing down or stopping development. A typical example is the case of Mountain Village, a proposed housing development of 2,200 homes near Oakland in the early 1970s. A local citizens group, “Citizens against Mountain Village,” formed to oppose the project. Joined by the local Sierra Club chapter, the groups tried to stop the project on the grounds that it would destroy a large, open space and wildlife habitat. When the local government approved the project anyway, advocates responded by filing a CEQA lawsuit arguing that an environmental impact report hadn’t been completed (until a 1972 court case, it was believed that CEQA only applied to government projects). Ultimately, navigating citizen opposition to the project required the developer to cut its 2,200 planned homes down to just 300, and redesign them as higher-end (and higher-priced) units to recoup the fixed costs of development.

This case was far from unusual. Between 1971 and 1975, 244 CEQA lawsuits were filed alleging that projects failed to properly complete an environmental impact report, and a state study found that CEQA litigation had been “excessive and frivolous, resulting in unnecessary legal costs and costs of project delay.” An environmental organization handbook at the time noted that “the mere threat of a suit can also be an impressive political tactic… suits can be an effective delaying tactic in order to force compromises.” Between 1971 and 1975, CEQA lawsuits were used to challenge more than 28,000 units of housing construction in the San Francisco area alone.

Other environmental laws and oversight groups were similarly successful in slowing down development. The San Francisco Bay Conservation and Development Commission was able to stop large swathes of development around the bay. The California Coastal Zone Commission’s coastal plan stated that “new development…shall not be permitted to sprawl, project by project, into open areas.” When establishing requirements for power plants within its jurisdiction, the Coastal Commission required that builders show that “energy conservation efforts, including concerted efforts by the applicant within its service area, cannot reasonably… eliminate the need for the proposed facility.”

Beyond environmental protection, broader concern about the effects of growth inspired many jurisdictions to create growth restrictions of varying severity. Concern about developers turning vineyards into housing tracts in Napa Valley resulted in the county rezoning as an agricultural preserve, with a minimum lot size of 20 acres (raised to 40 acres in 1978.) Orange County reduced the capacity of a planned sewage treatment system by 20% to restrict future growth. In 1970 the city of Livermore passed a ballot measure preventing additional residential construction until the issues of classroom overcrowding, sewage treatment, and water capacity could be solved, and in 1971 the city of Petaluma created strict quotas on how many residential units it would allow in each part of town. Residents of the town of Bolinas went so far as to tear down highway signs showing the road to their town; this happened so frequently that the highway department eventually gave up replacing them.

Citizens were also quick to vote for “anti-growth” elected officials if existing ones seemed to be too sympathetic to development. Livermore’s homebuilding moratorium was accompanied by the election of two new city council members in favor of it. In San Jose, three city councilors who ran on a platform of reduced growth won in 1973, and the next year the city elected a new mayor who supported “managed, controlled growth.” Similar opposition challenged or unseated pro-growth incumbents in cities like Tustin, Brea, Yorba Linda, Orange, Fullerton, Newport Beach, and San Juan Capistrano. 

Whereas in the 1950s city governments were inclined to work with developers to help get housing built, by the mid-1970s they had become highly adversarial. California had always been a “leader” in land use regulation: Los Angeles had the first zoning law in the country in 1908, and California set the precedent for single-family home zoning in the 1920s. But historically, restrictions had been part of a broader plan to encourage growth by making cities appealing; now they were being used to shut it down. By the mid-1970s, most cities and counties in California had some form of growth restriction in place.

Embodying the shift to growth opposition was Jerry Brown, son of former governor Pat Brown, elected as governor in 1975. Whereas his father had been a fervent champion of California growth, and of using the tools of government to make it happen, Jerry Brown cautioned that the U.S. had entered “an era of limits," noting that government “didn’t have to do things. Maybe by avoiding doing things you accomplish quite a lot.”

But growth-stifling measures didn’t eliminate people’s desire to live in California. Unsurprisingly, increased barriers to development drove up California real estate prices. In 1973, southern California homes were on average $1,000 cheaper than homes nationally. By 1979, they were, on average, $42,400 more expensive (reaching $143,000 more expensive by 1988). Between 1970 and 1977, San Francisco had the largest home price increase of any of the 16 biggest metros in the U.S., with average home prices nearly doubling. By 1977 San Francisco had the highest home prices of any large metro in the country, up from 6th highest in 1970. Los Angeles followed behind as a close second.

Increased home prices, coupled with a property tax reform that raised residential tax rates and assessment frequency, caused property taxes to skyrocket. A home purchased in Los Angeles for $45,000 in 1973 with a $1,160 property tax bill would have a $2,070 tax bill just three years later. As home prices rose throughout the state (going from an average of $34,000 in 1974 to $85,000 in 1978), average property taxes doubled, and in some cases even quadrupled. And while rising property taxes were ostensibly coupled to rising wealth (since the home itself had become more valuable), often these were merely “paper profits.” A homeowner couldn’t take advantage of his new, valuable house without selling it (and often not even then, if he only moved to another expensive California house), but still had to pay the new, higher taxes on it. For middle class families across the state, being able to afford property taxes became a major concern. Dissatisfaction with the taxes also came from the fact that taxes were increasingly being spent on things like welfare, healthcare, and schools in poor urban areas (a 1976 state supreme court case mandated that spending per-pupil be roughly equal across the state). In other words, in many jurisdictions taxes were being funneled to the poor and minorities rather than improving local services like police or road construction.

In response to increasing dissatisfaction with property taxes, California passed Proposition 13 in 1978. The ballot measure, which won by a 2-1 margin, rolled back assessed home values to their 1975 levels, limited assessed value to a 2% increase each year unless the house was sold, and capped property tax rates at 1% of the value of the house. Later amendments allowed a homeowner to pass on his home to his children (or even grandchildren) without triggering a reassessment, letting the low property taxes be passed from generation to generation.

Proposition 13 did exactly what it said on the tin. Homeowner property taxes immediately fell by nearly 60%, reducing government tax revenues by roughly $7 billion annually (with “losses” even higher later as property values continued to climb). City tax revenue declined by 27% on average, and county tax revenue declined by 40% on average. While government spending had risen by 4.1% per year between 1957 and 1971 in inflation-adjusted terms, after Prop 13 it began to fall. One estimate suggested that by 1988, Prop 13 had saved taxpayers $228 billion. California fell from 7th in the nation in tax revenue per $100 of personal income to 35th.

Cuts in government services quickly followed:

“The first year all summer school programs were cancelled, sports and other extracurricular programs reduced, public library hours curtailed, and some branch libraries closed down altogether; maintenance of parks, playgrounds, and other recreation facilities was sharply curtailed, and fees increased… The summer school programs were restored in subsequent years, but the service reductions, the cuts in school programs, the reduced staffing in everything from park and recreation programs to school counsellors and mental health clinics, the perpetually deferred maintenance…became the pattern of the future… California’s public schools, which had been among the most generously funded in the nation, began a path of decline from which they have never recovered.” – Paradise Lost

And even before tax revenues were cut, California was spending less and less of the money it did have on infrastructure and capital spending. In part this was due to rising interest rates making bonds for large capital expenditures more expensive. There was also a falling willingness to pay the price for infrastructure spending. Between 1958 and 1964, San Francisco passed 83% of bond measures placed on the ballot. Between 1965 and 1971, that fell to 39%. And once Proposition 13 was in place, capital spending became even more difficult. Up through the late 1960s, capital spending represented 15-20% of the state’s budget, but by the 1980s that had fallen to less than five percent.

Via The California Economy: When Vigor and Frailty Collide | Newgeography.com

Perversely, Prop 13 in some ways acted directly against homeowners’ desire for more local control. The measure eliminated local control over property tax, redirecting it to the state legislature and governor. Local governments and school districts were forced to hire lobbyists to represent their interests in the state capitol in the hopes of getting a portion of reduced tax revenue.

Prop 13, along with the enormous number of growth controls passed by various jurisdictions, forced California into a vicious cycle. With reduced tax revenues (and inability to control the revenues that remained), residency became far more zero sum. Services allocated to new residents might easily come at the expense of existing residents, incentivizing jurisdictions to create further growth controls. Rising property values forced people to live farther and farther away from their jobs, exacerbating the problems of growth: longer commuting distances meant more air pollution, more traffic congestion, and more freeway. In “Tax Revolt," authors Sears and Citron note that Prop 13 completely transformed the culture of California politics:

“Austerity and self-reliance replaced planning and social reform as symbols of legitimacy. Politicians increasingly came to speak the language of trade-offs and constraints rather than growth and progress. In the pre-Proposition 13 era, policy-makers could think first of what programs they wanted to expand and feel confident that revenues would be available. After 1978, the dominant mood forced officials to revise spending priorities to fit fixed revenues. New programs had to be ‘marketed,’ not merely announced, since they took money away from ongoing activities or necessitated raising fees or taxes.” – Tax Revolt

The anti-growth backlash of the late 60s and early 70s thus wasn’t a temporary trend, but the new normal, and anti-growth efforts continued into the 1980s and 90s. In 1979 and 1980, 19 out of 32 growth control measures on California ballots were successful, despite pro-growth advocacy groups outspending anti-growth by an average of four to one. In 1986, Los Angeles passed “Proposition U," which greatly reduced the allowable size of buildings in industrial and commercial spaces, and the next year introduced a monthly cap to new construction based on sewer system capacity after it was revealed that the sewer system was “on the verge of collapse.” Opposition to the large Ritter Ranch development project in the late 1980s (which developers are still trying to build today) reached such a pitch that at one point a mob of angry citizens ambushed the project representative, threatening to kill him. A proposed light rail through San Fernando Valley was shut down by angry citizens groups who railed against builders that only wanted to “develop, develop, develop…at the sacrifice of the American dream.”

Of course, the new culture couldn’t shut down the growth machine completely. California’s population doubled between 1970 and 2020 (though previously it had been doubling every 20 years, not 50). Post-1970 California saw the rise of a now-enormous software industry, and the first major buildout of utility-scale wind turbines. But the new culture greatly restricted growth, inflicting huge costs in the process. Since 1980, California has had the 5th highest level of home price increase in the country (behind Massachusetts, New York, Maine, and Washington). Economist Ed Glaeser estimated that as early as 2002 land use restrictions in San Francisco add nearly half a million dollars to the cost of a typical home, and in 2009 Hseih and Moretti estimated that relaxing land use restrictions in San Francisco and New York alone could boost national GDP by 8.9%.

Conclusion

California is often a forerunner, and an extreme example, of trends in the U.S. as a whole. So it was with the turn towards anti-growth. Rising environmental concern and growth restrictions both became nationwide trends. Following California’s CEQA, 17 other states passed NEPA-like laws (though none were as strict as CEQA), and growth restrictions began to pop up across the country, with “places like Fairfax County (Virginia), Montgomery County (Maryland), Ramapo (New York), Dade County (Florida), and Boulder (Colorado)” either adopting growth restrictions or placing moratoriums on residential construction. Likewise, the passage of Prop 13 was followed by similar “tax revolts” in states across the country. While today some states (such as Texas) are notable for making it easy to build things, the California culture of environmentalism-tinged growth opposition has become common throughout the U.S.

Unfortunately, the trajectory of California doesn’t give many obvious ideas on finding our way back to the pro-growth, pro-building path. In some cases, burdensome restrictions on building more homes and infrastructure weren’t actually chosen, but were more of a historical accident. NEPA, for instance, is today a major impediment to building things at a federal level, but this was an ancillary outcome of a last-minute provision that was added without much notice, not the original purpose of the law. Nobody “chose” the current situation we face with NEPA. But California’s anti-growth, anti-tax turn was a grassroots, bottom up effort, the result of hundreds or thousands of deliberate choices by citizens to limit growth and prevent unwanted changes to local areas, and to vote in politicians that would support this. For better or for worse, California’s turn against growth reflected the will of the people.

Or at least, partly the will of the people. One of the major issues in dealing with opposition to building in all its flavors is the incentives at work: with any major building project, the harms will be concentrated and obvious to local residents (construction noise and dust, blocked views, increased traffic), while the benefits will be diffuse, abstract, and often accrue to people who don’t yet live there. There’s thus a fundamental asymmetry where opposition has a louder voice than support.

We see this at work in California’s anti-growth turn. The harms of growth — pollution, traffic congestion, “uglification,” landscape destruction — are obvious and concentrated, while the benefits are much more abstract. The improved lives of residents who would be able to live there, or the GDP growth unlocked by removing land use restrictions are much less visceral (And with Prop 13, one potential benefit of growth — preventing high real estate prices and thus high property taxes — was achieved in other ways). And even when the benefits to growth and building were more readily apparent, people proved far more willing to oppose a new development than support it. With the proposed light rail system mentioned earlier, polling suggested that support for the project was overwhelming, and the system would have helped address what was becoming a catastrophic traffic problem. Nevertheless, grassroots advocacy was almost entirely opposed to the project. One leader of the opposition noted that “people don’t organize to fight for something, but they organize to fight against something.”

The problems of pro-growth vs anti-growth are also difficult from a temporal perspective. Anti-growth efforts were aimed at solving real, serious problems of environmental harm and infrastructure capacity, but at best these problems get resolved over years or decades. California’s air quality was dreadful for decades following the measures in the 1970s to try and ameliorate it. It can be hard to know whether you’ve “done enough” and just need to wait for your measure to work, or if more restrictive ones are required. And the delayed nature of any solution means that it's very easy to “overshoot,” creating restrictions that will ultimately cause large problems down the line. The nature of politics also means that overshooting can be hard to correct: new policies create new constituencies and centers of power that will fight against changes to the new status quo. NEPA’s restrictiveness was a historical accident, but it’s now staunchly defended by various environmental groups.

Historically, many of these problems were avoided by the fact that many citizens and politicians fundamentally believed that growth was virtuous, and that any problems it might bring could be overcome; bringing back a culture of growth might require re-instilling believing in those virtues.

---

If you’re interested in reading more about the evolution of California, a recommended reading list of the best books and other sources I found on the subject is available here for paid subscribers.