California’s multifamily housing production costs dramatically exceed those in Texas and Colorado, creating barriers to affordable housing development across the state, a new RAND report revealed.

The study, which analyzed over 140 completed projects, found that building a market-rate apartment in California costs approximately two and a half times more than constructing a similar unit in Texas on a square-foot basis.

“California is the most expensive state for multifamily housing production in every cost category,” the report states, highlighting how extended timelines significantly impact expenses. Projects in California take an average of 22 months longer to complete than those in Texas.

Municipal impact and development fees show stark contrasts: $29,000 per unit in California versus just $1,000 in Texas and $12,000 in Colorado.

Even within California, costs vary substantially. San Francisco construction runs about 50% higher than San Diego on a per-square-foot basis.

The researchers recommend several policy changes, including adopting Texas-style approval timelines requiring local jurisdictions to approve or deny housing proposals within 30 days.

“If California had Colorado’s production costs for publicly subsidized affordable apartments, the roughly $1.25 billion in recent spending by the state’s four largest funding programs would have produced more than four times as many units,” the report concludes.

Read more at RAND.