For decades, people have been moving to California to pursue their “California dream”: the idea of ​​owning a home in the most beautiful state in the USA, with beaches, mountains, deserts and forests, blessed with endless opportunities and the freedom to live the life you want to live.

Most Californians today would probably say they still hold on to that dream—but the high cost of housing makes it seem out of reach. Ironically, there’s one aspect of that dream that may be partly to blame: our outdated ideas about how much housing can be built in our cities.

In the early stages of California’s growth as a state (and the U.S. as a nation), it was possible to have everyone live on their own property, with a large house and a sprawling lawn surrounded by a fence. But as our state urbanized, this view of housing quickly became problematic: It’s not possible to have productive, diverse, affordable cities made up of thousands of mini-ranches.

And indeed, we are now facing the consequences of this outdated way of building housing: the average price of a home in California is now almost a million dollars.

Much of that insane housing cost is actually not for the house itself, but for the land beneath it. The value of a property doesn’t depend on a piece of land; it grows from all the valuable things happening around that land – in the case of cities like San Diego, Los Angeles, Long Beach and others, that value is the sum of the good-paying jobs, great schools, cultural institutions, theater, art, restaurants, beaches, mountains – all the things people would pay good money to have in their community.

But our current system of land-use regulations excludes most people. Strict zoning that prohibits the construction of more homes on existing lots has forced more and more of our neighbors to move away. And the restrictions can create a vicious cycle, as municipalities miss out on the increased property tax revenue that would result from allowing more homes on large residential lots.

These regulations prevent the construction of entry-level homes that average working-class families can afford. They have their roots in racial segregation and exclusion – and must be reformed.

To provide working Californians with more opportunities to own their own home, State Senator Anna Caballero has proposed SB 1123 – a fundamental land use reform bill that has the potential to revive the “California Dream.”

California has the second-lowest homeownership rate in the country, largely due to a lack of “starter homes.” Although many middle-income families could afford a smaller home or townhome, supply is stagnant—building these types of homes is mostly illegal in our cities. As a result, middle-income Californians, especially our Black and brown populations, are forced to rent rather than gain a path to affordable homeownership.

Today, Latino families make up 40 percent of California’s population. And there is a striking difference in the wealth of families who own a home versus those who do not: Latino homeowners have a median net worth of $233,000, compared to just $8,000 for non-homeowners.

And yet the home ownership rate among Latinos is 19 percent lower than among white Californians. It is even worse for black Californians: their home ownership rate is 26 percent lower.

Over 77 percent of residential zoning in the greater Los Angeles area is zoned for single-family homes with an average lot size of 6,500 square feet. The average single-family home in Los Angeles, currently priced at just under $900,000, generates just over $10,000 in property taxes annually. If we allowed that 6,500-square-foot lot to be subdivided or redeveloped to instead accommodate four smaller, for-sale homes priced at $600,000 each—a bargain in Los Angeles—property tax revenues would nearly triple. In Los Angeles, where property taxes account for over 20 percent of the city budget and are by far the largest source of revenue, a simple zoning change could significantly expand the city’s capacity to improve public safety and infrastructure, as well as support K-12 education.

SB 1123 will speed up and simplify this process by legalizing and streamlining the construction of up to 10 homes on vacant lots in single-family home areas near jobs, schools, public transportation and other amenities.

In other major U.S. cities, builders have already shifted their focus to smaller residential lots to meet pent-up demand for affordable, entry-level homes like bungalows or townhouses. Seattle did this in the 1990s—and as a result, thousands of single-family homes were converted to townhouses.