Opinion: The Libertarian Case for Ending California’s Housing Crisis

California has finally taken a meaningful step toward addressing its housing crisis — and from a libertarian perspective, it’s long overdue. The state’s recent decision to effectively gut the California Environmental Quality Act (CEQA) for most urban residential development is more than just a win for YIMBYs and developers. It’s a rare and critical victory for individual property rights, economic mobility, and constitutional sanity in a state long shackled by regulatory overreach.

As CalMatters put it, “With the passage of a state budget-related housing bill, the California Environmental Quality Act will be a non-issue for a decisive swath of urban residential development.” What that means in practice is that most new apartment buildings will no longer be vulnerable to CEQA-based litigation — lawsuits that often have nothing to do with environmental protection and everything to do with blocking new housing. This is a major blow to the “not in my backyard” (NIMBY) forces who, for years, have used CEQA as a legal cudgel to maintain the status quo.

Assemblymember Buffy Wicks, who introduced the CEQA reform bill, framed it clearly: “Saying ‘no’ to housing in my community will no longer be state sanctioned. This isn’t going to solve all of our housing problems in the state, but it is going to remove the single biggest impediment to building environmentally friendly housing.”

Libertarians have been saying this for decades. CEQA’s abuse illustrates what happens when well-intentioned laws get captured by entrenched interests. The law, originally passed to ensure that development considers environmental impacts, evolved into a tool wielded by privileged groups to delay, distort, and ultimately destroy housing proposals — particularly the dense, urban, and affordable housing California desperately needs.

As George Mason University law professor and libertarian scholar Ilya Somin writes, “California’s regulatory barriers to housing construction are what has put the state at the epicenter of the nation’s housing crisis, and CEQA is a big part of the reason why.” He adds that while exclusionary zoning remains a serious problem, “curtailing CEQA is still a major step in the right direction.”

But CEQA is just one part of a much larger problem — a deeply embedded legal structure that actively prevents people from building, renting, or buying homes, all in the name of preserving “community character” or “local control.” This is where Somin’s work becomes especially important.

In a coauthored article in the Texas Law Review, Somin and University of Wisconsin law professor Joshua Braver argue that exclusionary zoning laws — restrictions that prevent property owners from building anything but single-family homes, or that impose arbitrary lot sizes, parking requirements, and height limits — are not merely bad policy. They are unconstitutional.

“We argue that exclusionary zoning… violates the Takings Clause of the Fifth Amendment,” Somin and Braver write. “These laws have emerged as a major political and legal issue,” they add, “responsible for massive housing shortages… cutting off millions of people — particularly the poor and minorities — from economic and social opportunities.”

The Takings Clause is clear: when the government “takes” private property, it must provide “just compensation.” Traditionally, this has meant physical appropriation of land. But Somin and Braver point out that the founders understood property rights to include not just the right to exclude others, but also the right to use one’s property. As William Blackstone famously wrote, property consists in “the free use, enjoyment, and disposal of all his acquisitions.” And that right, in the late 18th and 19th centuries, included the ability to build a house.

What exclusionary zoning does, they argue, is effectively take that right away — severely limiting what owners can build and how they can use their land — without offering any compensation. In doing so, it violates both the original understanding of the Constitution and modern constitutional principles of fairness and representation.

From a libertarian standpoint, this is foundational. Property rights are not abstract ideals — they are the bedrock of liberty. When the government strips away your ability to decide what to do with your land, it denies you autonomy and economic freedom. Worse still, as Somin and Braver show, exclusionary zoning does this selectively, insulating the privileged while locking the disadvantaged out of opportunity.

This isn’t just a right-wing libertarian crusade. Braver is a progressive living constitutionalist. The two authors write that “we differ on many things, but agree here.” Their argument unites originalist theories with the representation-reinforcement theory of judicial review developed by John Hart Ely. In Democracy and Distrust, Ely argued that courts should act when democratic systems are rigged to entrench incumbent power and exclude outsiders.

That’s precisely what exclusionary zoning does. “The ‘ins’ are a community’s current residents,” Somin and Braver write, “and the ‘outs’ are potential residents.” Those already living in wealthy neighborhoods vote to block new development, thereby preserving their property values and local control. The people who would benefit most from new housing — lower-income families, young workers, immigrants — are politically voiceless. They can’t vote in the places where they can’t afford to live.

This is where the judiciary must step in. As Somin and Braver explain, “Judicial review can give voice to voiceless outsiders by providing them an opportunity to acquire the housing they need to move in.” They propose that courts recognize exclusionary zoning as a per se taking — which would require governments to pay compensation for the economic harm these laws impose. Since local governments couldn’t afford to pay out thousands of property owners, the effect would be a forced rollback of zoning restrictions.

That, in turn, could dramatically increase housing supply. Studies show that eliminating zoning restrictions in just seven U.S. metro areas could increase GDP by nearly 8%. As economists Gilles Duranton and Diego Puga concluded, zoning reform could allow millions of Americans to move to areas where they’d be more productive and better off — unleashing innovation and reducing poverty. Libertarians often champion markets as engines of mobility. The current system blocks those engines with legal concrete.

It also perpetuates racial and economic injustice. As Braver and Somin write, “Exclusionary zoning also has a horrible history of racism and classism.” After Buchanan v. Warley outlawed racial zoning, localities responded by enacting facially neutral laws with the same effects — effectively barring Black, Latino, and poor white residents through pricing and density constraints. This legacy continues, and courts that care about equal protection or representation-reinforcement should not ignore it.

Critics might argue that local governments need zoning to protect neighborhoods from overcrowding, noise, or traffic. But, as the authors note, genuine health and safety concerns fall under the police-power exception — the legal doctrine allowing certain types of regulation that address significant harms. “Few exclusionary-zoning restrictions fit within any plausible view of the police-power exception,” they write. “Their main effect is to exclude low-income people, not protect against environmental or health threats.”

California’s CEQA reform has already triggered complaints from those who want to preserve the old, exclusionary status quo. But CEQA was never designed to be a housing policy — and using it to prevent apartments from being built near jobs and transit was always a distortion of environmental priorities. If you want to reduce car dependency and greenhouse gas emissions, you need to build more infill housing, not less.

This is a rare moment where libertarian and progressive goals converge. Both want to dismantle the regulatory apparatus that has concentrated opportunity in the hands of the few. Both want to see families able to move, build, and grow wealth. And both understand that when the law is used to exclude, delay, and entrench, it becomes a weapon against liberty.

The housing crisis is real, but so is the path forward. Reform CEQA. Repeal exclusionary zoning. Reinforce constitutional protections for property rights and economic opportunity. California’s latest move is a beginning — but the real change will come when courts finally recognize that zoning laws which prevent Americans from building homes on their own land are not just bad policy. They are unconstitutional.

For libertarians, that’s not just a legal argument. It’s a moral one. Because when freedom is fenced off, priced out, and litigated away, it ceases to be freedom at all.

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