Richard Ellis, co-chair of the Board of Directors Committee of the Professional Risk Managers’ International Association (PRMIA), said that California’s housing crisis stems from political actions and stringent regulations rather than insufficient spending. He made this assertion in a post on X.
“The housing shortage and homelessness in California were caused by politicians,” said Ricahrd Ellis, Co-Chair Board of Directors Committee. “the ever fear of frivolous lawsuits have made homebuilding impossible in the state. Onerous and duplicative permits, unreasonable and subjective regulations. To try to cure that failure by spending taxpayer money indiscriminately is just crazy.”
Ellis’ comments arise amid increasing concerns regarding California’s persistent housing challenges. The California Environmental Quality Act (CEQA) requires environmental reviews for new housing projects, often resulting in considerable delays. According to a study by Holland & Knight, these developments frequently face CEQA lawsuits, which intensify the state’s housing crisis by deterring developers due to the associated time and costs.
California’s legal environment, particularly under the Private Attorneys General Act (PAGA), has led to a surge in litigation, with many lawsuits deemed frivolous by employers. This increase in legal actions has resulted in significant financial burdens for businesses, prompting many insurers to withdraw from the wage-and-hour insurance market in the state. The heightened risk and associated costs have directly contributed to rising insurance premiums for employers. According to Lockton, a global insurance brokerage, the proliferation of PAGA claims has made it challenging for insurers to offer coverage, leading to increased premiums and limited availability of wage-and-hour insurance in California.
The shortage is further exacerbated by rising land and construction costs. A report from the RAND Corporation indicates that municipal impact and development fees in California average $29,000 per housing unit, markedly higher than in states like Texas where such fees are under $1,000. Additionally, the time required to complete a housing project in California surpasses that in Texas by over 22 months, contributing to increased overall costs.
According to his LinkedIn profile, Ellis possesses extensive experience in risk management and financial services. Based in Bronxville, NY, he is affiliated with PRMIA and is involved in industry standards and professional development. His background spans multiple sectors, providing him with a broad understanding of the financial landscape.
