'Abundance' for whom?

Ezra Klein and Derek Thompson's bestselling book "Abundance" has offered a seductive diagnosis for what ails America: we have forgotten how to build. Housing is too expensive, they argue, because environmental laws like the California Environmental Quality Act make it too costly and too slow to construct new units. Strip away the red tape, build more, and prices will fall. It is a simple story, bipartisan in its appeal, and wrong.

A growing body of academic research now demonstrates that the housing affordability crisis is not primarily a supply problem caused by environmental regulation. It is a demand problem driven by income inequality. And deregulation will not cure it.

The supply story doesn't hold up

Start with the historical record. U.S. housing starts peaked in 2006 and collapsed with the financial crisis, not because regulators suddenly tightened the screws. California built more housing than Texas in some mid-2000s years, under the same CEQA rules Klein and Thompson blame.

More recently, the California Legislature has adopted dozens of CEQA streamlining measures and exemptions specifically targeting housing production. Today, most infill housing projects in California proceed through streamlined or exempt pathways rather than full CEQA review, the result of years of legislative housing reform. Yet affordable housing remains scarce. If CEQA were really the lock, we would expect these exemptions to have turned the key. They haven't.

The real barriers to construction are economic, not procedural. As my colleague Andrew Schwartz has documented, California's years-long experience with SB 35, the state's signature CEQA-streamlining housing law, shows that high land costs, high construction costs and a shortage of skilled labor render most projects economically infeasible without large subsidies. Market-rate developers are not blocked by environmental review. They are waiting for prices to rise further.

The research has moved on

Klein and Thompson's thesis rests on an Econ 101 syllogism: constrained supply means higher prices, so loosen the constraints. But two major academic papers have now challenged that thesis.

A 2025 National Bureau of Economic Research working paper by economists Louie, Mondragon, and Wieland found that supply constraints, including land-use and environmental regulations, are quantitatively "unimportant in explaining differences in rising house prices among U.S. cities." If regulation were really choking off supply and inflating prices, you would expect to see housing costs rise faster in more regulated cities. They haven't. Housing prices have instead tracked income growth, and they've done so at the same rate whether a city has had strict land-use regulations or permissive ones. YIMBY proponents attacked the paper, but independent analysts concluded the criticisms were largely unwarranted, and the authors' own response demonstrated that any perceived bias in their findings was small.

A 2026 paper by Buchholz, Kemeny, Randolph, and Storper, scholars at UC Berkeley, the University of Toronto, Georgia Tech, and UCLA, goes further. They directly simulated Klein and Thompson's "just build more" strategy and found that even assuming a rate of housing construction more than double San Francisco's recent growth rate, sustained year after year, it would take roughly 20 years under the most optimistic assumptions to make the city affordable to a non-college-educated worker. Under more realistic assumptions, the timeline stretches past 100 years. Their conclusion is blunt: "[I]t is unrealistic to think that we can deregulate and build our way out of the affordability crisis with market-rate housing ... in any reasonable time frame."

Inequality is the culprit

The Buchholz paper offers the most comprehensive demand-side analysis of the housing crisis to date. Its central finding: uneven demand growth--driven by rising income inequality between individuals and between regions--is the primary driver of declining affordability. Across the country, mean rent has tracked mean income almost perfectly since 1980. There is no market failure here. The crisis arises because wages at the bottom have not kept pace.

Consider San Francisco. Between 1980 and 2019, mean rent rose roughly 600%. But so did mean income. The crisis is not that housing costs outpaced income on average. It is that wage growth was wildly unequal: college-educated wages grew 475% while non-college wages grew only 255%. The same pattern holds in Houston, a low-regulation city that YIMBY advocates hold up as a model, and even in Cleveland, a shrinking Rust Belt city. Wherever income inequality is severe, working people face a housing affordability crisis, regardless of how lax the regulatory environment.

Klein and Thompson assert that wages began to stagnate and inequality began to soar starting in the 1970s, and they blame the environmental and zoning laws enacted in that era. The timeline does not support them. Income inequality fell steadily from the late 1940s through the late 1960s, a period economists call the Great Compression, and remained near those historic lows through the 1970s. The sharp divergence that defines today's crisis accelerated in the 1980s, well after the environmental and zoning laws Klein and Thompson blame were enacted.

Follow the money

The Buchholz paper also identifies a perverse irony in the Abundance prescription: deregulation and upzoning tend to bid up the price of land, widening the wealth gap between property owners and renters. In high-cost markets, the "downward filtering" that supply-side advocates promise--build luxury housing, and older units become cheaper--does not materialize. Instead, housing "filters up." Demand from high earners is so intense that existing homes get more expensive over time, not less.

It is worth asking who benefits from this agenda. As Waleed Shahid reported in "The Nation," the Abundance movement's flagship event was funded in large part by private equity executives and billionaire donors--the very class driving the inequality that fuels the crisis. Elon Musk enthusiastically signal-boosted Klein's pitch. When the world's richest man is your most eager supporter, the agenda is not about helping working families. It is about removing the regulations that constrain concentrated wealth.

The real cost of deregulation

Even if gutting environmental laws could somehow bring down housing prices (and the research says it will not), the cost would fall hardest on communities that can least afford it. The nation's landmark environmental laws were not conjured to frustrate developers. They emerged after oil spills, burning rivers, and highways bulldozed through Black neighborhoods, giving communities legal standing to resist destructive projects for the first time. That standing is not a luxury. For California's most environmentally overburdened communities, whose residents must live beside refineries, rail yards and toxic waste facilities, CEQA often provides the only leverage they have.

In the past year, California has received a preview of what the Abundance Agenda looks like in practice. In June 2025, Governor Newsom signed SB 131 into law, explicitly framing it as "advancing an abundance agenda." Buried within what was marketed as a housing bill was a sweeping CEQA exemption for "advanced manufacturing," a term defined so broadly it could encompass battery production, semiconductor fabrication, rare earth mining and defense manufacturing. These types of industrial facilities have released dangerous levels of hazardous chemicals and solvents into the air and water in the past.

The consequences of SB 131 are stark. Major industrial facilities involving hazardous chemicals can now be sited near homes, schools, and hospitals without environmental review, public notice or mitigation. The bill's supposed safeguard--that only projects on industrially zoned land qualify--ignores the reality that environmental justice communities are precisely the places where homes border industrial zones. This is what deregulation looks like on the ground: not affordable housing, but unaccountable industry.

What actually works

If we are serious about affordable housing, the research points in a clear direction: confront inequality directly. That means raising wages, strengthening unions, and reforming tax policy to narrow the gap between what high earners and working people can afford. It means massively expanding programs like the Low-Income Housing Tax Credit, Section 8 vouchers and community land trusts--programs that have been essentially flat-funded since the 1990s. These solutions require resources and political will. Deregulation's appeal, as Buchholz and his co-authors note, is precisely that it promises affordability without public investment or redistribution. That is not a feature. It is a warning sign.

The Abundance Agenda offers the wrong diagnosis and the wrong cure. It lets wealthy elites off the hook for the inequality they have profited from and asks working people to sacrifice their environmental protections instead. CEQA did not cause the housing crisis. Inequality did. And no amount of market-rate construction will change that without addressing the problem at its source.