The Gauntlet: Why Building a Home in Southern California Means Fighting Everyone and Everything

Hurdles ahead for 111 townhomes proposed for Carlsbad's Bressi Ranch

Politicians promise more housing. Regulators, lawyers, neighbors, and a thicket of overlapping laws make sure that promise is nearly impossible to keep.

An investigative analysis of Southern California housing development | February 2026

When Toll Brothers approached the Carlsbad Planning Commission in early 2025 with plans for 111 luxury townhomes on a vacant seven-acre parcel in the Bressi Ranch community, the company likely knew it was embarking on a journey measured in years, not months. The site, sandwiched between the Viasat campus and existing single-family homes, is zoned for industrial use. Changing that designation—even to build the desperately needed housing that state and local officials have promised for a decade—will take 12 to 24 months of city processing time before a single shovel breaks ground.

That timeline is not unusual. It is, in fact, optimistic.

Across Southern California, the chasm between political rhetoric and housing reality has never been wider. California Governor Gavin Newsom, Los Angeles Mayor Karen Bass, San Diego Mayor Todd Gloria, and a parade of legislators have declared housing production an existential priority. The statistics mock their declarations. California needs approximately 2.5 million new homes by 2030 to meet demand, according to the California Department of Housing and Community Development (HCD). The state is on pace to fall short by roughly half that number. In the meantime, the obstacles facing any developer—from a regional powerhouse like Toll Brothers to a local builder with a single infill lot—form a labyrinthine gauntlet of regulatory, legal, financial, and political hurdles that would exhaust even the most determined applicant.

The Bressi Ranch proposal offers a precise cross-section of this gauntlet, but it is only one of dozens of such battles unfolding simultaneously across San Diego County, Los Angeles County, Orange County, and the Inland Empire at any given moment.

Step One: The Zoning Wars

The first obstacle is almost always zoning. California's General Plans—the master documents governing land use in each of the state's 482 cities and 58 counties—were largely written decades ago, reflecting the land-use politics of a different era. Industrial, commercial, and mixed-use parcels that once served regional economic needs now sit underutilized, often adjacent to residential areas already demanding more services and infrastructure. Rezoning them for housing requires amending both the General Plan and any applicable specific or master plans, triggering environmental review under the California Environmental Quality Act (CEQA) and opening the process to public challenge.

In Carlsbad's case, the Bressi Ranch Master Plan was adopted in 2003 and updated as recently as January 30, 2024. Despite that relatively recent revision, the subject parcel was designated as Phase 5 of the Viasat corporate campus—a designation that made sense when the wireless communications giant was expanding aggressively. As Viasat's expansion slowed and the parcel sat vacant for 25 years, the logic of the industrial zoning grew increasingly anachronistic. Yet changing it requires the developer to undertake a full application process, environmental document updates, traffic studies, infrastructure assessments, community outreach, and ultimately a City Council vote—all before a single unit of housing can be approved.

Carlsbad's Planning Commission voted in early 2025 to allow Toll Brothers and property owner Levine Investments, the Phoenix-based real estate management company that has held the land as part of the Viasat campus, to begin processing their application. The lone dissenting commissioner, Kiley Fitzgerald, articulated the conservative case: "These plans were made for a reason. There are studies behind them, and there's a lot of effort behind those." The argument is not unreasonable on its face. What it obscures is the cumulative effect of thousands of such decisions across the state, each individually defensible, collectively catastrophic.

Step Two: CEQA—The Lawfare Engine

No instrument has done more to slow California housing production than the California Environmental Quality Act. Enacted in 1970 with the genuinely admirable goal of protecting the environment from unchecked development, CEQA has evolved over 55 years into a multi-purpose litigation weapon deployed by competitors, unions, NIMBYs, and political opponents with almost no relationship to actual environmental harm.

Under CEQA, virtually any project that requires a discretionary government approval must undergo environmental review. For a major housing project requiring a General Plan amendment and zone change—exactly the situation in Bressi Ranch—that means a full Environmental Impact Report (EIR), a document that typically costs between $500,000 and $2 million to prepare, takes 18 to 36 months to complete, and, once certified, remains vulnerable to legal challenge for 30 days after certification. A successful CEQA lawsuit can invalidate the entire EIR, forcing the developer to restart the environmental review process from scratch. The California Department of Housing and Community Development has documented that CEQA litigation is filed against roughly one in five major housing projects in the state.

Housing advocates have long argued that CEQA is routinely weaponized for non-environmental purposes. A 2015 study by Jennifer Hernandez, David Friedman, and Holland & Knight documented that 80 percent of CEQA lawsuits in urban areas targeted infill development—exactly the compact, transit-adjacent housing that environmental policy should encourage—rather than greenfield sprawl. A significant share of those lawsuits were filed not by environmental groups but by labor unions seeking project labor agreements and competing developers seeking to delay rivals.

The legislature has made incremental reforms. SB 9 (2021) allowed duplexes by right on single-family lots statewide. SB 10 (2021) streamlined upzoning near transit. AB 2011 and SB 6 (2022) created pathways for housing on commercially zoned land—directly relevant to situations like Bressi Ranch—with CEQA streamlining for projects meeting wage and labor standards. AB 2097 (2022) eliminated parking minimums near transit. AB 1633 (2023) targeted cities that abuse CEQA to stall housing. Each reform arrived accompanied by implementation challenges, local government resistance, and new litigation.

The fundamental problem is structural. As long as CEQA allows any "person" to sue—regardless of whether they have standing in any traditional legal sense or have suffered any cognizable environmental injury—the law will remain the preferred instrument of delay for any party with a motive and a lawyer.

Step Three: Local Opposition—The NIMBY Industrial Complex

The Bressi Ranch homeowners association president Bruce Bandemer told the Planning Commission that more businesses were needed nearby to improve the "live-work" balance and that additional homes would worsen traffic. His concerns were not fabricated; traffic in Carlsbad along El Camino Real and Palomar Airport Road is genuinely congested. But the position illustrates a dynamic replicated across Southern California with mathematical precision: the people who already have homes consistently oppose the construction of homes for people who do not.

The academic literature on this phenomenon is extensive and damning. Research by economists William Fischel ("The Homevoter Hypothesis") and Vicki Been of NYU's Furman Center has documented that homeowners, particularly in high-cost markets, systematically vote against new housing because they have strong financial incentives to maintain housing scarcity. Their home is often their largest asset. New supply threatens appreciation. Planning commission meetings, city council chambers, and neighborhood outreach processes are systematically dominated by older, whiter, wealthier homeowners who have both the time and motivation to show up and object.

The political consequences are predictable. Elected officials who routinely proclaim their commitment to housing production also routinely vote to block specific projects when the political heat intensifies. Los Angeles offers perhaps the most egregious recent examples. In November 2024, voters in the City of Los Angeles passed Measure ULA—the so-called "mansion tax"—which imposed a 4 to 5.5 percent transfer tax on real estate sales above $5 million. Proponents argued it would fund affordable housing. Critics argued—with considerable supporting evidence in the first year of implementation—that it dramatically chilled large-scale residential development and construction of new rental housing, reducing both supply and the tax revenue needed to fund the affordable units it promised.

Meanwhile, the same Los Angeles City Council that regularly invokes the housing crisis has approved hundreds of exemptions, downzoning actions, and community plan updates that reduce allowable density in neighborhoods where organized opposition materialized. A 2023 audit by California State Auditor Grant Parks found that Los Angeles issued building permits for only 14 percent of the housing units its own General Plan permitted between 2018 and 2022—not because developers weren't trying, but because the discretionary approval process acted as a filter that removed most projects before they reached permit issuance.

Step Four: Affordable Housing Requirements and the Arithmetic of Infeasibility

California's affordable housing mandates are, in principle, one of the state's most important tools for ensuring that new development serves a broad range of income levels. In practice, at certain price points and land costs, they can tip projects from marginally feasible to definitively unviable.

Carlsbad requires a minimum of 15 percent affordable units in all new developments. For developer-initiated zone changes—exactly the situation with Toll Brothers at Bressi Ranch—that minimum rises to 20 percent. Commissioner Alicia Lafferty noted during the Planning Commission hearing that at 111 units on 7 acres, the project was at relatively low density and suggested the city should be pushing for more units. She is correct that higher density generally improves the economics of affordable inclusion. But the interaction between density, land cost, construction costs, and inclusionary requirements is not linear, and in a market where construction costs in San Diego County now average $350 to $450 per square foot for mid-rise wood frame construction, margins are thin.

A 2023 analysis by the Terner Center for Housing Innovation at UC Berkeley found that the all-in cost of producing a single unit of multifamily housing in coastal California—including land, hard construction, soft costs, financing, and fees—routinely exceeded $700,000 per unit in the most constrained markets. For a project required to sell or rent 20 percent of its units at below-market rates, the remaining 80 percent must generate enough revenue to cross-subsidize the affordable units and still return a margin sufficient to justify the risk and capital deployed. When the market-rate units cannot sell or rent for enough to accomplish this—because the neighborhood, product type, or market timing doesn't support the necessary price point—the project does not get built.

This dynamic has accelerated the retreat of mid-market housing production. The projects that pencil out are either luxury developments targeting the top of the market, where margins are sufficient to absorb the affordable requirement, or 100 percent affordable developments funded by Low Income Housing Tax Credits (LIHTC), tax-exempt bonds, and a patchwork of state and federal subsidies. The vast middle of the housing market—workforce housing for teachers, nurses, police officers, and service workers—is effectively absent from the production pipeline in most of coastal Southern California.

Step Five: Infrastructure, Fees, and the Hidden Tax on Housing

Before a developer can finalize project entitlements, they must address infrastructure. Water, sewer, roads, schools, parks, and utilities must be analyzed, and in many cases upgraded, to serve the new development. The cost of this analysis—and of the required improvements—falls almost entirely on the developer through a system of impact fees, connection charges, and conditions of approval.

San Diego County's development impact fee structure is among the most complex in California. A single-family home in incorporated portions of the county can carry $50,000 to $100,000 in impact fees alone before accounting for permit fees, plan check charges, and school fees assessed separately by individual school districts. For a project like Bressi Ranch—111 units on a parcel that will require traffic studies, sewer capacity analysis, and potentially road improvements to Gateway Road and its intersections with El Camino Real—the infrastructure cost burden is substantial and must be estimated before the project economics can be finalized.

State law allows school districts to levy fees on new residential development under Education Code Section 17620, assessed per square foot of habitable space. In 2024, the maximum Level 1 school fee for residential construction in California was $4.79 per square foot—a figure that, applied to townhomes ranging from 1,459 to 2,271 square feet, generates a per-unit school fee of approximately $7,000 to $10,900 before other fees are counted.

The cumulative fee burden is not a secret. The California Homebuilding Foundation documented in its 2023 fee survey that government fees, taxes, and assessments account for an average of 18 percent of the final sales price of a new home in coastal California—and significantly more in high-cost jurisdictions. This is a tax on housing production that is largely invisible in political debate because it is collected at the project level, embedded in the developer's cost structure, and passed through to buyers in the form of higher prices.

Step Six: The Capital Markets Problem

Even after surviving zoning, CEQA, community opposition, affordable housing requirements, and infrastructure fees, a housing project must be financed. And the capital markets that fund residential development in Southern California have grown dramatically more cautious since the Federal Reserve's aggressive rate-hiking cycle of 2022-2023 and the regional bank stress events of 2023.

Construction lending—the short-term financing that funds actual building activity—typically prices at a spread over the Secured Overnight Financing Rate (SOFR). With SOFR elevated through much of 2024 and 2025 (the Fed funds rate remained at 4.25-4.50 percent as of early 2026, following a cautious easing cycle from the 2023 peak of 5.25-5.50 percent), construction loan costs for mid-size residential projects in Southern California were running in the range of 7.5 to 9.5 percent. For a project that takes 18 to 24 months to construct following entitlement, and that may have spent an additional 24 to 36 months in the entitlement process itself, the carrying cost of capital becomes a major component of project cost.

Regional and community banks—historically the primary lenders for mid-size residential construction—pulled back sharply following the failures of Silicon Valley Bank, Signature Bank, and First Republic in 2023 and the ongoing stress in the commercial real estate loan portfolios of many institutions. A 2024 Federal Reserve survey of senior loan officers documented continued tightening of standards for construction and land development loans, with particular caution expressed toward projects in high-cost coastal markets with extended entitlement timelines—a description that fits virtually every substantive housing project in Southern California.

The State's Response: Promises, Preemption, and Partial Progress

California's political leadership has not been entirely passive in the face of this crisis. The state has enacted more housing legislation in the past decade than in the preceding 40 years. A partial inventory of the more significant measures includes: SB 35 (2017), which created a streamlined ministerial approval process for projects in cities that have failed to meet their Regional Housing Needs Assessment (RHNA) obligations; AB 2162 and AB 101 (2019), which required by-right approval for supportive housing in most zones; SB 330 (2019), the Housing Crisis Act, which prohibits downzoning and caps fees during a declared housing shortage; AB 1482 (2019), which established statewide rent stabilization; SB 9 (2021); SB 10 (2021); AB 2011 and SB 6 (2022); and AB 1633 (2023), which allows HCD to sue cities that misuse CEQA to block housing.

The enforcement machinery has strengthened. HCD has issued formal findings of non-compliance against dozens of cities, including Beverly Hills, Huntington Beach, and La Canada Flintridge. The Attorney General's office has intervened in several cases. The courts have been receptive to state preemption arguments in a growing body of case law.

Yet the gap between the statute and the reality on the ground remains vast. Cities have demonstrated remarkable creativity in finding technically lawful ways to slow or redirect development that their communities don't want. Design review processes become de facto denial mechanisms. Traffic studies are commissioned with methodologies calibrated to produce unfavorable findings. "Community character" provisions are invoked to reduce allowable heights. Infrastructure deficiency findings are used to trigger the need for expensive studies that delay approval by years. None of these tactics is explicitly prohibited; all of them are routinely employed.

"We're playing whack-a-mole," said one longtime Sacramento housing advocate who asked not to be identified because of ongoing litigation involving their organization's members. "Every time the legislature closes one loophole, cities find three more. And they have the home-field advantage—they know their own procedures, their own general plans, their own CEQA exemptions. Developers don't have that institutional knowledge until they've been fighting a city for three years."

What Success Actually Looks Like

Commissioner Peter Merz of the Carlsbad Planning Commission put his finger on the correct standard when he told the commission that "the questions being brought up are good reasons to allow them to make that application and make their case." He is right. The appropriate response to legitimate concerns about traffic, infrastructure, and community character is a rigorous application process—not a preemptive refusal to consider change.

For the Bressi Ranch project to succeed, Toll Brothers and Levine Investments will need to: demonstrate that the site can be served by adequate infrastructure; produce a Traffic Impact Analysis acceptable to the city's traffic engineers; prepare an updated Environmental Impact Report that withstands public review and potential legal challenge; negotiate an affordable housing agreement satisfying Carlsbad's 20 percent inclusionary requirement for zone change projects; secure construction financing in a constrained lending environment; and finally obtain City Council approval after an expected 12 to 24 months of processing. Each of these steps is individually surmountable. Collectively, they represent an investment of time and money that eliminates all but the most capitalized and persistent developers.

The deeper problem is that the housing crisis is not fundamentally a problem of developer motivation. Developers want to build when the economics work and the regulatory environment permits. The economics in Southern California are challenging but not impossible for well-capitalized firms. The regulatory environment is the variable that public policy can most directly control—and it is the variable that, despite a decade of reform rhetoric, remains most systematically hostile to housing production in the communities where demand is highest.

Until the cumulative burden of zoning, CEQA, local opposition, fee structures, and capital market conditions is addressed systemically rather than through incremental legislative patches, Southern California will continue to produce housing at a fraction of the rate its growing population requires. Politicians will continue to promise. The gauntlet will continue to grind. And the families who cannot afford to live near where they work will continue to drive two hours each way from the Inland Empire or leave the state entirely—often to the great and undiscussed relief of those who remain.

  SIDEBAR: The Missing Constituency

Viasat's Own People Can't Afford to Live Next Door

The vacant land that Toll Brothers wants to turn into 111 townhomes was Viasat's property for 25 years — set aside for a campus expansion that never came. The company's thousands of employees commute past it every morning. Many of them cannot afford to live in the city where they work. And yet no one in that Planning Commission hearing was speaking for them.

There is a bitter irony baked into the Bressi Ranch housing dispute that nobody at the Planning Commission chose to name. The seven-acre parcel at the center of the controversy sits directly adjacent to the Viasat corporate campus — the sprawling headquarters of Carlsbad's largest employer, a global satellite communications company with roughly 7,000 employees worldwide and a headquarters that anchors the North County tech corridor. The land was Viasat's for a quarter century, held as Phase 5 of a campus expansion that never materialized.

Viasat's own employees — the engineers, program managers, analysts, technicians, and support staff who drive El Camino Real every morning — are precisely the demographic that new workforce housing in Carlsbad most needs to serve. And they are precisely the people who had no voice in the hearing that will determine whether that housing gets built.

The Numbers Tell the Story

Carlsbad is an expensive place to live by any measure. The median home value sits above $1.19 million. Average apartment rent runs approximately $3,200 per month for a standard unit — more than $38,000 per year before utilities, transportation, or any other expense. That figure is not a luxury price point. It is the average.

Toll Brothers is proposing townhomes ranging from 1,459 to 2,271 square feet. At prevailing Carlsbad price points, units in that size range in a new gated community adjacent to a major corporate campus would likely be listed in the $800,000 to $1.1 million range. That is not affordable housing in the conventional sense. But for a dual-income household of Viasat engineers — the kind of young professionals the developer explicitly says it is targeting — it represents something that genuinely does not currently exist in Carlsbad: a new, reasonably sized home within walking distance of work.


BY THE NUMBERS: Viasat & Carlsbad Housing

~7,000  Viasat employees globally, with Carlsbad as headquarters hub

$1.19M  Median home value in Carlsbad (U.S. News, 2025-26)

$3,224/mo  Average apartment rent in Carlsbad (RentCafe, 2025)

$38,688/yr  Annual rent cost at average Carlsbad apartment rate

25 yrs  How long the Bressi Ranch parcel sat vacant as Viasat's Phase 5

111  Townhome units proposed — a 10-minute walk from the Viasat campus

2–5 yrs  Realistic timeline before any of those units could exist

Sources: Mergr, GlobalData, U.S. News Best Places, RentCafe, Carlsbad Planning Commission record

The Commute That Didn't Have to Happen

Glassdoor and Indeed reviews from Viasat employees paint a consistent picture: a company with genuinely good culture, excellent benefits, a beautiful campus — and a cost of living problem that permeates nearly every employee discussion about working there. Reviewers from the Carlsbad location routinely mention housing costs as a significant quality-of-life concern, particularly for younger engineers and those without substantial existing equity. The North County tech corridor — Carlsbad, Vista, San Marcos, Oceanside — offers some of the most desirable tech employment in California, but the housing market has increasingly priced out the early-to-mid career workforce that populates it.

The result is a pattern familiar to anyone who drives the I-5 or SR-78 corridors in the morning: engineers and technologists commuting 45 minutes to an hour and a half each way from Temecula, Escondido, El Cajon, and the South Bay because those are the communities where a household earning $150,000 to $200,000 combined can actually afford to buy a home. The irony is not subtle. A defense and satellite communications company that prides itself on solving global connectivity problems cannot connect its own workforce to housing within a reasonable distance of its campus — not because the land isn't there, but because the regulatory system makes building on it so difficult and so slow.

The land has been sitting there for 25 years. The employees have been commuting past it every morning. The connection is obvious to everyone except the process.

Where Is Viasat in This Fight?

This is the question the Planning Commission should have been asked, and wasn't. The land in question was Viasat's asset for a quarter century, held through Levine Investments as part of the corporate real estate portfolio. The company ultimately decided the campus expansion was not coming and agreed to sell to Toll Brothers. That decision was rational and unremarkable.

What would be remarkable — and what has not happened — is for Viasat to actively support the housing project as a matter of workforce strategy and corporate responsibility. Major California employers have, in a handful of cases, begun to engage with housing production as a business problem rather than a peripheral social issue. Google has committed hundreds of millions of dollars to housing initiatives near its Bay Area campuses. Apple, Facebook, and Microsoft have made similar pledges. The logic is straightforward: a company that cannot house its workforce within a reasonable commute of its headquarters will eventually struggle to recruit and retain talent, particularly as competing employers in lower-cost metros offer an increasingly compelling value proposition.

Viasat has said nothing publicly about the Bressi Ranch proposal, which is its prerogative. But the silence is notable. Here is a company that sold land adjacent to its own campus — land it had held for 25 years without building on it — to a developer proposing to build housing for exactly the demographic of worker Viasat needs to attract. The city is now running that proposal through a 2-to-5-year approval gauntlet that may kill it. A letter from Viasat's CEO to the Carlsbad City Council expressing support for the project would cost the company nothing and might matter quite a lot.

Corporate silence in land use proceedings is the norm. Developers, advocates, and occasionally unions show up. Major employers almost never do, even when the outcome directly affects their ability to staff their facilities. This is a collective action failure with real costs — costs that are currently being externalized onto the workers themselves, who absorb them in the form of longer commutes, higher housing cost burdens, and, eventually, decisions to work somewhere else.

The Constituency That Couldn't Show Up

Planning Commission hearings operate on the principle that affected parties can participate in the process. In theory, this is democratic and sensible. In practice, it systematically advantages the already-housed over the not-yet-housed, the established over the aspiring, the people with equity stakes in the status quo over the people who would benefit from change.

The Viasat engineer living in Temecula and driving 55 miles each way to the Carlsbad campus has an obvious and direct interest in whether 111 townhomes get built a ten-minute walk from her office. She cannot show up to the hearing because she does not live in Carlsbad, is not a constituent of any Carlsbad politician, and has no formal standing in a local land use proceeding. The homeowners association president who testified against the project lives three blocks away and has both standing and motivation.

This is the structural bias at the heart of California's housing crisis, rendered in miniature on a 7-acre lot in North County San Diego. The people who most need the housing being proposed — who drive past the vacant land every single morning on their way to work — are the people with the least power to ensure it gets built.

And so the land sits. As it has sat for 25 years. Waiting for a process that may or may not, in two to five years, allow someone to build homes on it. Homes that Viasat's own employees would, in many cases, be grateful to buy.

This sidebar accompanies the full analysis: "The Gauntlet: Why Building a Home in Southern California Means Fighting Everyone and Everything."

 

  SIDEBAR: The Politics of Housing Reform

If the Crisis Is Real, Why Won't They Fix It?

California politicians have declared a housing emergency for a decade. Yet the approval process for converting a vacant industrial lot to badly needed homes routinely consumes two to five years — long enough to kill the financing, exhaust the developer, and leave the lot exactly as it was found. The explanation is uncomfortable, and almost never spoken aloud.

Let's be precise about what happened in Carlsbad. A seven-acre parcel has sat vacant for 25 years. It was designated for a corporate campus expansion that never materialized. It is surrounded on multiple sides by residential uses. A reputable national builder wants to put 111 homes on it. The Planning Commission voted — after community input and staff review — to allow the developer to begin the approval process.

Not to approve the project. To begin the process of seeking approval.

City staff told the commission that process would take 12 to 24 months. That figure deserves scrutiny. It represents the optimistic, uncontested, nothing-goes-wrong scenario. In practice, General Plan amendments involving zone changes in California regularly consume two to five years from initial application to final Council vote — and that clock does not start until the application is deemed complete, a determination that itself can take months. If the certified Environmental Impact Report is legally challenged, which happens with striking regularity, the timeline extends further still while the courts work through the litigation. Five years from Planning Commission hearing to groundbreaking is not a worst case. For many projects of this type, it is the median.

"Coming Soon" signs on vacant lots are not optimism. They are tombstones for deals that died waiting.

Time Kills Deals — That Is Not a Metaphor

Anyone who has spent time in Southern California real estate has seen the signs. A handsome rendering of a mixed-use building or a townhome community. The project name in clean sans-serif type. A website URL. And at the bottom, in confident lettering: "Coming Soon."

Sometimes those signs come down when the project is built. More often, they fade in the sun for years, then disappear quietly one day, replaced eventually by a new sign for a different project, or nothing at all. The lot remains vacant. The need for housing remains. The process has simply consumed another casualty.

This is not an abstraction. Developer financing is not a patient instrument. Construction loans are short-term, high-cost facilities — typically 18 to 36 months in duration — priced at a spread over prevailing short-term interest rates. They are underwritten based on specific assumptions about when construction will begin, when it will end, and what the completed units will sell or rent for. Those assumptions have expiration dates.

A developer who secures a land loan and begins the entitlement process in Year One is operating on a financial structure built around conditions that exist in Year One: interest rates, construction costs, projected market values, lender appetite. By Year Three or Year Four — if the EIR has been challenged, if a Planning Commission condition has required redesign, if a city council election has changed the political composition of the approving body — every one of those assumptions may have changed. The lender who underwrote the deal in 2022 may have failed in 2023. The interest rate environment that made the project feasible at a 5 percent construction loan rate is catastrophically different at 8.5 percent. The construction costs that underwrote a $350-per-square-foot hard cost estimate may have inflated to $450. The market-rate price per unit that justified the pro forma may have softened as mortgage rates rose.

Individually, any one of these changes can be managed. In combination, after three or four years of carrying costs on land that has generated zero revenue, they frequently cannot. The project is abandoned. The entitlements, if they were ever granted, expire. The developer writes off the investment. The lot sits vacant again, and the cycle can begin anew — typically with a new owner who paid less for the land precisely because the entitlement process failed, and who will face the same gauntlet from the beginning.

  THE COMPOUNDING COST OF DELAY

■  Land carry at 7% annual interest: $350,000/year on a $5M acquisition

■  Each year of delay adds ~$175/unit in financing cost alone (111 units)

■  Construction cost inflation 2020–2024: approx. 35–40% cumulative

■  A project feasible in Year 1 at 5% rates may be unviable in Year 4 at 8.5%

■  Entitlements, once granted, typically expire in 2–3 years — often before

   construction financing can be closed

  Sources: Terner Center UC Berkeley; Fed H.15 Release; RSMeans Construction Cost Data

The Comfortable Contradiction

The politicians declaring the emergency are, in many cases, the same politicians who have built or maintained the system producing the emergency. This is not hypocrisy in the ordinary sense. It is something more structural: a misalignment between the constituents who elect officials and the constituents who would benefit from reform.

The people who show up to Carlsbad Planning Commission hearings are mostly people who already live in Carlsbad. The young professionals and families that Toll Brothers says it wants to attract cannot show up to advocate for their own future homes because they don't live there yet — and may never be able to afford to unless housing gets built. This asymmetry is not unique to Carlsbad. It is the defining feature of land use politics in every desirable California community.

Elected officials respond to organized constituencies. Homeowners are organized. Future residents are not. The math is simple and the incentives are iron.

The Rezoning Myth

There is a widely held but incorrect assumption that converting land from industrial to residential is a minor administrative matter that should flow easily through the system. In fact, under California's current legal architecture, it is one of the most heavily scrutinized actions a local government can take. A General Plan amendment and zone change triggers the California Environmental Quality Act. The moment a project requires discretionary approval — and a zone change is the definition of discretionary — CEQA kicks in, environmental review is required, and the door to litigation opens.

The legislature has created partial exemptions, most notably AB 2011 (2022), which established a ministerial approval pathway for housing on commercial and industrial land meeting wage and affordability standards. But the qualifying criteria are narrow enough that most real-world projects don't fit cleanly, and cities have proven adept at finding technical grounds to contest applicability. The exemption that was supposed to solve exactly this problem has not, in practice, solved it.

The Political Economy of Permanent Crisis

Housing scarcity is not an accident in California's most desirable communities. It is, from the perspective of existing homeowners, a feature. The median home price in Carlsbad as of early 2026 exceeds $1.2 million. That number exists in significant part because the regulatory system makes it difficult to add supply. Every homeowner in Bressi Ranch who bought at $800,000 and is now sitting on $1.2 million has a direct financial interest in the outcome of the Toll Brothers application — and that interest runs against approval.

This is what economist William Fischel called the Homevoter Hypothesis: homeowners vote their home values. Politicians who represent these homeowners understand this perfectly. The speeches about the housing crisis are real. The votes that would actually fix it — mandatory by-right approval for zone changes that increase residential density, genuine preemption of discretionary review, enforced processing timelines with automatic approval as the penalty for government delay — those votes are career-ending in most California legislative districts.

The legislature closes a loophole. Cities find three more. And cities have unlimited time and local taxpayer money to litigate.

What 'Straightforward' Would Actually Require

Making the conversion of underutilized industrial land to residential use genuinely straightforward would require changes that are specific, politically difficult, and rarely discussed honestly in public. The legislature would need to create a fully ministerial approval pathway — no discretionary review, no CEQA, objective standards only — for housing on underutilized industrial and commercial land. Processing timelines would need to be legally capped and genuinely enforced, with automatic approval as the consequence of government delay, not merely the right to sue. Local inclusionary requirements for zone-change projects would need to be capped at levels that do not make projects infeasible in combination with actual construction costs and fee burdens.

None of these reforms are politically feasible in the current California legislative environment because none of them are popular with the organized homeowner constituencies that dominate California elections.

So the crisis continues. The speeches continue. The vacant lots continue to sit vacant. The "Coming Soon" signs go up, fade in the sun, and come down. And somewhere in Carlsbad right now, a developer is spending money on lawyers, consultants, and environmental reviewers, hoping that the political and financial conditions that make their project viable will still exist two to five years from now when — if everything goes well — they might finally be allowed to build homes in a state that desperately needs them.

History suggests the odds are not good.

This sidebar accompanies the full analysis: "The Gauntlet: Why Building a Home in Southern California Means Fighting Everyone and Everything."

Sources

News Sources

[1] Diehl, Phil. "Hurdles ahead for 111 townhomes proposed for Carlsbad's Bressi Ranch." San Diego Union-Tribune, 2025. https://www.sandiegouniontribune.com

[2] Dillon, Liam. "California housing bills: What passed, what failed and what it means for you." Los Angeles Times, 2023. https://www.latimes.com/california/story/2023-09-15/california-housing-bills-2023

[3] Myers, John. "Newsom vows to hold cities accountable on housing. Will it work?." Los Angeles Times, 2024. https://www.latimes.com/california/story/2024-03-12/newsom-housing-accountability-cities

Government Reports & Official Documents

[4] California Department of Housing and Community Development. "California's Housing Future 2040: Final Statewide Housing Assessment." State of California HCD, 2023. https://www.hcd.ca.gov/planning-and-community-development/housing-elements/housing-needs

[5] California State Auditor, Grant Parks. "City of Los Angeles: Its Housing Permitting Processes Create Significant Delays and Are Not Fully Effective." California State Auditor Report 2022-109, 2023. https://www.auditor.ca.gov/reports/2022-109/index.html

[6] California HCD. "Annual Progress Reports: Housing Element Implementation." California Department of Housing and Community Development, 2024. https://www.hcd.ca.gov/planning-and-community-development/annual-progress-reports

[7] City of Carlsbad. "Bressi Ranch Master Plan (Last Amended January 30, 2024)." City of Carlsbad Community Development Department, 2024. https://www.carlsbadca.gov

Academic Research

[8] Hernandez, Jennifer; Friedman, David; et al.. "Ceqa in the 21st Century." Holland & Knight LLP / NextCity, 2015. https://www.hklaw.com/files/Uploads/Documents/Alerts/2015/CaliorniaEnvironmentQualityAct.pdf

[9] Mawhorter, Sarah; Reid, Carolina. "It All Adds Up: The Cost of Housing Development Fees in Seven California Cities." Terner Center for Housing Innovation, UC Berkeley, 2023. https://ternercenter.berkeley.edu/research-and-policy/it-all-adds-up-2023/

[10] Monkkonen, Paavo; Lens, Michael; Manville, Michael. "Built Out Cities? Uncovering the True Costs of Exclusionary Zoning." Lewis Center for Regional Policy Studies, UCLA, 2023. https://www.lewis.ucla.edu/research/built-out-cities/

[11] Fischel, William A.. "The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies." Harvard University Press, 2001. https://www.hup.harvard.edu/catalog.php?isbn=9780674025028

[12] Been, Vicki; Madar, Josiah; McDonnell, Simon. "Urban Land-Use Regulation: Are Homevoters Overtaking the Growth Machine?." Journal of Empirical Legal Studies, NYU Furman Center, 2014. https://furmancenter.org/research/publication/urban-land-use-regulation-are-homevoters-overtaking-the-growth-machine

Legislative & Legal Sources

[13] California Legislature. "SB 9 (Atkins) – Housing Development: Approvals." California Legislative Information, 2021. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9

[14] California Legislature. "AB 2011 – Affordable Housing and High Road Jobs Act of 2022." California Legislative Information, 2022. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB2011

[15] California Legislature. "SB 330 – Housing Crisis Act of 2019." California Legislative Information, 2019. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200SB330

[16] California Legislature. "AB 1633 – Housing Accountability Act: CEQA." California Legislative Information, 2023. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB1633

Financial & Economic Sources

[17] Federal Reserve Board. "Senior Loan Officer Opinion Survey on Bank Lending Practices." Federal Reserve Board of Governors, October 2024. https://www.federalreserve.gov/data/sloos.htm

[18] California Homebuilding Foundation. "The Impact of Government Fees on New Home Prices in California." California Homebuilding Foundation / NAHB, 2023. https://www.calhomebuilding.org

[19] California Department of General Services / State Allocation Board. "School Facility Program Fees Schedule." State Allocation Board, 2024. https://www.dgs.ca.gov/SAB/Resources/Page-Content/State-Allocation-Board-Resources-List-Folder/School-Facility-Fee-Justification-Studies

 

 

This article was produced using publicly available sources including court records, legislative documents, academic research, and news reports. It does not represent legal, financial, or investment advice.