Khanna Blames Regulation for California Housing Crisis, Ignores Supply Shortage and Investor Speculation

Rep. Ro Khanna's soundbite that California has 'too much regulation' causing its housing crisis is a shallow diagnosis that lets developers and financial speculators off the hook. While data from the Public Policy Institute of California shows 677,000 new housing units permitted from 2018–2023 as population growth slowed, the deeper crisis is a shortage of affordable units for lower-income renters—a gap the National Low Income Housing Coalition's 2026 profile places at over 1 million homes. Deregulation typically fuels luxury construction, not affordable units, and can accelerate gentrification. Khanna himself acknowledges the investor angle: in January 2026 he refloated a bill to ban investors from buying up homes, a measure aimed at curbing Wall Street speculation that drives up prices. That bill operates on the premise that our housing shortage is not merely a land-use problem but a financialization problem—investors treating homes as assets rather than shelter. By instead blaming 'regulation,' Khanna gives cover to the very actors his own bill targets. The result is a muddled message: call for deregulation while also trying to rein in speculators. That confusion serves no one but the real estate industry that profits from both.