Richard Hanania delivers a jarring reality check to the housing reform movement: the states most celebrated for progressive ideals are actively pricing out their own citizens, while the political right is quietly engineering the abundance its critics claim is impossible. This piece cuts through the noise of corporate consolidation theories to expose a stark, data-driven truth—policy choices, not market forces, are the primary architects of the housing crisis. For a busy professional trying to understand why the American dream is becoming a luxury good, Hanania's comparison of Texas and California offers a rare clarity on what actually works.
The Policy Divergence
Hanania begins by dismantling the assumption that demographics or geography explain the housing gap. He notes that California and Texas share similar weather and demographic profiles, yet the median home price in California sits at $809,000, "over 2.5 times higher than Texas, where it is $308,000." This isn't a matter of square footage; even on a price-per-square-foot basis, California remains twice as expensive. The author argues that the disparity is purely legislative, pointing out that "the cause of the disparity in housing prices is obvious. Land use restrictions are supposed to have some kind of positive payoff, but I've heard nothing to indicate that Texas suffers more than California in terms of extra traffic, strained infrastructure, noisy neighbors, or anything else that strict zoning laws are meant to prevent."
The core of Hanania's argument is that the "anti-monopoly" narrative favored by many on the left is a distraction. He highlights an interview where progressive thinker Zephyr Teachout struggles to explain why Democratic states are so much more expensive than Republican ones, eventually conceding that the issue may be "left-wing resistance." Hanania writes, "Some on the left have simply decided that corporate power is the problem, and then work backwards." This framing is powerful because it shifts the blame from abstract market forces to concrete local governance. Critics might argue that corporate consolidation in construction does play a role, but Hanania's data on permit volume—"In 2024, more new housing permits were granted in Dallas and Houston than all of California"—suggests supply constraints are the dominant factor.
The cause of the disparity in housing prices is obvious. Land use restrictions are supposed to have some kind of positive payoff, but I've heard nothing to indicate that Texas suffers more than California in terms of extra traffic, strained infrastructure, noisy neighbors, or anything else that strict zoning laws are meant to prevent.
The Mechanics of Reform
The article then pivots to a detailed comparison of recent legislative actions, revealing a surprising reversal of roles. While California has passed bills like the California Environmental Quality Act exemptions and Senate Bill 79 to override local zoning near transit, Hanania argues these are insufficient. He contrasts this with Texas's Senate Bill 840, which adopts "by-right zoning rules" in major cities, effectively stripping local governments of the discretion to block multifamily housing in commercial zones. Hanania observes, "California hopes to nudge localities into better behavior; Texas is now simply telling them that they can no longer restrict the rights of their residents and stomp on the American dream to placate selfish and short-sighted interests."
This section is particularly compelling because it moves beyond ideology to the nitty-gritty of statutory language. Hanania notes that Texas limits municipalities from imposing height or density requirements more restrictive than 36 units per acre, a level of specificity that California's more tentative reforms lack. He points out a historical parallel to the 1978 Proposition 13 in California, which froze property taxes but inadvertently incentivized restrictive zoning to protect existing homeowners' equity, a dynamic that continues to stifle supply. In contrast, Texas is aggressively dismantling those barriers. As Hanania puts it, "Texas is unique in the breadth and scope of its zoning reform, which has been one of the most undercovered stories in politics."
The Coalition Paradox
Perhaps the most provocative element of Hanania's commentary is his analysis of why these policy outcomes exist. He challenges the "Elite Human Capital theory," which suggests that smarter, more intellectually inclined movements will produce better policy. Instead, he argues that the Republican coalition in Texas, driven by business interests, aligns more closely with the common good on housing than the Democratic coalition, which he claims is "beholden to a professional activist class." He writes, "Republicans protect the interests of business, while Democrats are beholden to a professional activist class. Each side has its own parochial concerns, but the interests of business are more likely to be aligned with the common good than are the interests of environmentalists, labor union leaders, or civil rights activists."
Hanania does not shy away from the political irony here. He notes that while the "Abundance" movement on the left has gained traction, their influence is limited by their own coalition's demands. "Labor unions are among the most formidable opponents of abundance-style reforms in California," he writes, noting that higher wages for a few workers come at the cost of making housing unaffordable for the working class. This is a sharp, if controversial, critique of how well-intentioned groups can inadvertently harm the broader population. A counterargument worth considering is that business interests in Texas may also prioritize short-term developer profits over long-term community stability, a nuance Hanania glosses over in his enthusiasm for deregulation.
The phrase "homes are for people, not corporations" is so stupid it hurts. According to Warren, then, it's fine to rent from a large corporate owner if…you share walls with someone else? Otherwise you either buy a home yourself, or rent it from a small company or individual? This is apparently a matter of great principle!
The National Disconnect
The commentary concludes by highlighting a bizarre divergence between state-level pragmatism and national-level rhetoric. Hanania points out that while Texas is expanding housing freedom, the federal administration and the national Republican party are drifting toward "Warren-style anti-corporate demagoguery." He criticizes recent federal proposals to limit institutional ownership of single-family homes, calling the logic "completely irrational." He argues that this shift reflects a national political culture dominated by "culture war grievance, conspiracy theories, and the kinds of ideas that sound good to the simple-minded," rather than the pragmatic business interests driving state-level success.
Hanania's final observation is a sobering reminder that ideas matter less than coalitional interests. He suggests that the "ghost of Reagan and the self-interest of developers" dominate the Texas legislature, while the national conversation is hijacked by influencers. "Maybe ideas move things on the margins," he concedes, but ultimately, the political reality is that "the former arrived at this point even as the right-wing discourse continues to be dominated by uninformed trash."
Bottom Line
Richard Hanania's strongest contribution is his empirical dismantling of the idea that progressive governance automatically yields better housing outcomes, proving instead that deregulation in Texas is outpacing reform in California. However, his dismissal of the potential downsides of unfettered developer power and his broad brushstrokes on activist groups leave the argument vulnerable to charges of oversimplification. The reader should watch to see if Texas's aggressive zoning reforms can sustain their momentum without triggering the infrastructure and community backlash that California has long feared."