Housing expert condemns California’s absurd regulatory hurdles blocking affordable homes

California’s push to make housing more affordable is hitting a familiar roadblock: getting new homes built, despite state laws intended to spur development.

California Gov. Gavin Newsom faces scrutiny over housing regulations as experts warn that excessive red tape continues to stall construction and make affordable housing harder to build. (Jason Henry/Bloomberg / Getty Images)

At a FOX Business segment, Macro Trends Advisors founding partner Mitch Roschelle described his firsthand experience investing in an affordable‑housing project in Los Angeles. The development was meant to take advantage of legislation signed by Gov. Newsom that permits additional units on certain properties without rezoning. Yet Roschelle said the effort was “absurdly” hampered by layers of bureaucracy, a situation he likened to “blue tape” rather than anything legitimate.

“The reason why that company had a really, really hard time is the amount of red tape,” Roschelle explained. “The amount of blue tape that takes place in California, especially in Los Angeles, especially post the fires, is absurd.”

Even when developers are granted permission to add units, Roschelle noted, they still confront a maze of regulatory hurdles before construction can begin. This contrasts sharply with Florida, where proposed property‑tax relief measures are already encouraging prospective buyers to act ahead of year‑end deadlines.

Roschelle emphasized that borrowing costs remain a significant barrier for the broader market. “I think the only thing that’s going to be a big help is lower interest rates,” he said, underscoring the need for both regulatory simplification and more affordable financing to truly expand affordable housing options.

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