California paper says growth alone won't fix affordability, and utility bills hit the poor hardest

A new California policy paper is putting the state's cost burden at the center of the debate, arguing that stronger economic growth by itself will not restore affordability.

Its broader claim is that well-intentioned regulations have also made daily necessities more expensive, with lower-income Californians bearing the heaviest impact.

What happened?

Senior researcher Samuel Trachtman's Berkeley Economy & Society Initiative white paper, To Make California More Affordable, Reform Regressive Regulations, is sparking debate over how California should respond to high costs in areas including housing, electricity, gasoline, and child care. 

As The Davis Vanguard reported, the paper says the state has relied too heavily on "regressively funded progressivism." It argues that California has an affordability problem, that growth alone cannot solve it, and that rules meant to promote safety, sustainability, and quality can drive up the price of essentials. 

Electricity is a key case in the paper's analysis: it says rooftop solar subsidies and wildfire mitigation spending have helped push utility bills higher because those costs are collected through rates instead of broader tax revenue. 

"For a state struggling with affordability, however, the problem with both is the funding structure," the paper said, "Ratepayer-funded subsidies and infrastructure investments are regressive by nature. They hit middle- and lower-income Californians the hardest."

Why does it matter?

If lawmakers were to shift some climate and infrastructure costs away from utility bills and into the state's General Fund, that could ease pressure on household budgets, the report argues, especially for residents already stretched by rent, groceries, and transportation.

The paper also asserts that California could reduce costs without abandoning its environmental or public-safety goals.

On housing, it points to building code reforms, such as allowing some single-stair apartment buildings, which it says could lower costs by 10%. On child care, it argues that easing certain credentialing barriers could increase the number of providers and help bring prices down for parents.

What are people saying?

The paper does not reject regulation outright.

"Using state regulation to promote safety, sustainability, and quality is important," the report states. "But funding these policies on the backs of the poor is wrongheaded."

It also argues that some widely supported rules remain in place because their benefits are easy to see while their costs are less visible: "These regulations often have rationales that carry emotional appeal and signal alignment with California's generally progressive politics."

The report says reform does not have to mean retreat. "California should undertake a broad shift away from regressive regulations that increase the cost of living," the report concludes, while still pursuing "a progressive agenda that promotes sustainability, safety, and quality," without putting the heavy burden on low-income residents.

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