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BERKELEY, Calif. \u2014 California spends heavily on programs intended to help residents withstand some of the nation\u2019s highest housing, child care and health care costs, but a new UC Berkeley white paper <\/a>argues that a fragmented and bureaucratically complex social safety net prevents much of that spending from reaching its full potential.<\/p>\n The July 2026 white paper, \u201cTo Make California More Affordable, Improve the Effectiveness and Efficiency of Social Spending,\u201d by Samuel Trachtman, a senior researcher with the Berkeley Economy & Society Initiative, argues that raising additional revenue alone will not solve California\u2019s affordability crisis.<\/p>\n Instead, Trachtman argues, California must reform the systems through which billions of dollars in housing, child care and health care assistance are delivered, reducing administrative barriers that consume resources and make benefits harder for low- and moderate-income residents to access.<\/p>\n California combines extraordinary economic wealth with severe affordability problems. The report notes the state has one of the highest median incomes in the country, but its high cost of living also leaves it with one of the nation\u2019s highest poverty rates.<\/p>\n According to the Legislative Analyst\u2019s Office, the report states, a household would need income exceeding twice California\u2019s median household income to qualify for a mortgage on a mid-tier home.<\/p>\n California\u2019s social safety net is more generous than those in many other states, supported by a large economy and relatively high income and corporate taxes. But the report concludes that fragmentation and administrative complexity reduce the impact of that spending.<\/p>\n The report describes the broader problem through the concept of \u201ckludgeocracy,\u201d borrowing from political scientist Steve Teles, who wrote that the United States governs through \u201cmore indirect and incoherent policy mechanisms than can be found in any comparable country.\u201d<\/p>\n Trachtman argues that this problem \u2014 programs layered together through disconnected funding streams, agencies, eligibility rules and administrative requirements \u2014 is endemic to California social spending.<\/p>\n The consequences extend beyond wasted resources. The report argues that opaque systems make it difficult for beneficiaries to obtain assistance, providers to deliver services and policymakers to determine whether programs are accomplishing their goals.<\/p>\n The problem is particularly acute in affordable housing.<\/p>\n Housing costs are the largest contributor to California\u2019s affordability crisis, according to the report, and publicly subsidized affordable housing is substantially more expensive to build in California than in other states.<\/p>\n Researchers cited in the report found that the average deed-restricted multifamily unit costs about $640 per net rentable square foot to produce in California, compared with $249 in Colorado. Market-rate housing costs were $415 per square foot in California and $303 in Colorado.<\/p>\n That means publicly subsidized affordable housing in California costs 54% more than market-rate housing, while in Colorado subsidized housing costs 18% less than market-rate construction.<\/p>\n The report estimates that the same amount of public money could produce more than twice as many affordable units if California could achieve Colorado\u2019s per-square-foot construction costs.<\/p>\n One significant source of the problem, Trachtman argues, is the state\u2019s fragmented financing system.<\/p>\n From 2020 through 2023, 92% of California affordable housing projects using the Low-Income Housing Tax Credit also relied on at least one additional public funding source, while 76% used two or more.<\/p>\n Each additional funding source can add approximately four months to a project timeline, according to Terner Center research cited in the report. Multiple funding sources also bring separate application requirements, underwriting standards, compliance obligations and legal and staffing expenses.<\/p>\n The report recommends moving toward a \u201cone-stop shop\u201d in which developers make a single application and the state coordinates funding from available state and federal programs.<\/p>\n California has already begun moving in that direction. The report points to the newly created California Housing and Homelessness Agency and AB 179, signed by Gov. Gavin Newsom in July, which consolidates several affordable housing programs so they can make integrated funding awards.<\/p>\n But Trachtman notes the reforms remain incomplete, with developers potentially still required to apply separately for programs administered through the state treasurer\u2019s office.<\/p>\n The report also examines labor and design requirements attached to affordable housing funding.<\/p>\n Terner Center research cited by Trachtman estimates that affordable housing projects subject to prevailing wage requirements cost between $84,800 and $106,700 more per unit than comparable projects without those requirements, although the report notes the magnitude of those costs remains contested in the academic literature.<\/p>\n Rather than simply eliminating such standards, Trachtman calls for cost-benefit analysis to determine which requirements produce benefits commensurate with their costs and recommends harmonizing standards across state programs.<\/p>\n Administrative fragmentation also affects people seeking housing assistance. In metropolitan areas such as Los Angeles and the Bay Area, residents may have to apply separately to numerous public housing agencies, each maintaining its own waiting list, eligibility rules and procedures.<\/p>\n The report recommends regional public housing agency consortia with standardized applications, eligibility requirements and shared waiting lists, along with a statewide public database of affordable housing listings.<\/p>\n California\u2019s child care system presents many of the same problems.<\/p>\n The state operates 14 child care funding streams divided primarily between the California Department of Social Services and California Department of Education. Different programs can have different eligibility requirements, reimbursement systems and administrative rules despite providing similar services.<\/p>\n The report notes that California has substantially increased spending on child care and early childhood education. By fiscal year 2024-25, spending approached $12 billion, compared with roughly $7.5 billion in inflation-adjusted dollars in 2019-20.<\/p>\n But additional spending has not necessarily translated into corresponding improvements in access.<\/p>\n As of 2023, only 14% of California children eligible for subsidized child care were enrolled, according to California Budget & Policy Center estimates cited in the report.<\/p>\n The report also points to a striking disconnect between spending and capacity: An additional $3.1 billion flowed into child care and state preschool between 2019 and 2023 without increasing licensed capacity.<\/p>\n Trachtman argues the state should take responsibility for combining funding streams rather than forcing individual child care providers to navigate them.<\/p>\n Under the proposed approach, providers could enroll eligible children through simplified criteria and report enrollment to the state, which would then assemble the appropriate combination of funding sources.<\/p>\n The report also recommends reducing administrative requirements such as detailed attendance tracking and complicated enrollment prioritization protocols while maintaining protections against fraud through better state data systems.<\/p>\n For families, Trachtman proposes a comprehensive statewide online marketplace through which parents could determine eligibility, submit a common application, monitor waiting lists and receive vouchers.<\/p>\n The goal is to shift administrative complexity away from families and providers and back onto government.<\/p>\n The report similarly identifies administrative barriers within Medi-Cal, which covers roughly one-third of Californians and has a total state and federal budget approaching $200 billion.<\/p>\n Nearly $45 billion came directly from California\u2019s General Fund in 2025-26, representing about 20% of total General Fund spending.<\/p>\n The report warns that federal policy changes will make efficient administration increasingly important.<\/p>\n It cites new federal requirements scheduled for implementation in 2027 that will require more frequent eligibility renewals and impose work requirements on millions of adults receiving Medi-Cal through the Affordable Care Act expansion.<\/p>\n California\u2019s experience following the COVID-19 pandemic illustrates the consequences of administrative barriers, the report argues. When pandemic-era continuous Medicaid coverage policies ended in 2023, approximately 2 million Californians lost coverage, with roughly two-thirds removed for procedural reasons.<\/p>\n About 15% later had their benefits restored, suggesting that at least some people lost coverage despite remaining eligible.<\/p>\n The report recommends expanding automatic Medi-Cal renewals and using existing state administrative information \u2014 including data from the Employment Development Department, CalFresh and CalWORKs \u2014 to automatically verify eligibility whenever possible.<\/p>\n It also calls for standardizing Medi-Cal managed care plans and reducing fragmentation.<\/p>\n Among its recommendations are moving toward one or two managed care plans per county, exploring a statewide provider network to centralize credentialing, claims processing and prior authorization, and integrating Medi-Cal with Covered California by offering a Medi-Cal product through the state health insurance marketplace.<\/p>\n Trachtman acknowledges that bureaucratic simplification itself faces political obstacles.<\/p>\n Federal, state and local governments often jointly finance programs, inherently creating multiple administrative layers. Legislators can have stronger political incentives to create new programs than to repair existing ones, while agencies may prioritize formal compliance over whether programs actually work.<\/p>\n Nonprofits and businesses operating within existing systems may also have little incentive to support reforms that disrupt established arrangements, according to the report.<\/p>\n The report argues that greater transparency can counter those institutional pressures.<\/p>\n \u201cFixing a problem requires first being able to see and understand it,\u201d Trachtman writes.<\/p>\n Without reliable and accessible information, the report argues, policymakers and the public cannot easily identify failures, while organized interests with specialized knowledge can gain disproportionate influence.<\/p>\n California therefore should invest in transparent public data systems capable of tracking enrollment, participation and outcomes across major social programs.<\/p>\n The report points to CalFresh as evidence that administrative reform can make a substantial difference.<\/p>\n In 2016, only 72% of eligible Californians participated in CalFresh, the state\u2019s Supplemental Nutrition Assistance Program, giving California the fifth-lowest participation rate nationally. By 2022, participation had increased to 81% after the state pursued reforms that included modernized online enrollment and county-level participation tracking.<\/p>\n That experience underlies the report\u2019s broader argument: California does not necessarily have to choose between spending more and helping fewer people.<\/p>\n The state could increase the value of existing spending by simplifying programs, coordinating funding streams, reducing unnecessary administrative burdens and making public systems easier for residents to navigate.<\/p>\n Those reforms are particularly important as California confronts structural budget deficits and federal policies that could shift additional costs onto the state.<\/p>\n California\u2019s affordability crisis ultimately cannot be solved through social programs alone, the report concludes. Sustainable economic growth, regulatory reform, higher wages and potentially additional revenue will also be necessary.<\/p>\n But Trachtman argues that making government work better is itself an affordability policy.<\/p>\n \u201cTaking the steps we have outlined in this report can allow the state to deliver more assistance with the same levels of spending,\u201d the report states.<\/p>\n And improving government efficiency need not foreclose additional investment.<\/p>\n \u201cThis does not preclude additional revenue-raising,\u201d Trachtman writes. \u201cIf anything, demonstrating effective governance will strengthen the political case for more revenues.\u201d<\/p>\n To comment please go to one of these social media platforms:<\/p>\n Facebook: https:\/\/www.facebook.com\/DavisVanguard<\/a><\/p>\n LinkedIn: https:\/\/www.linkedin.com\/company\/peoples-vanguard-of-davis-inc\/<\/a><\/p>\n Instagram: https:\/\/www.instagram.com\/davisvanguard\/<\/a><\/p>\n X: https:\/\/x.com\/davisvanguard<\/a><\/p>\n Bluesky: https:\/\/bsky.app\/profile\/vanguardnewsgroup.bsky.social<\/a><\/p>\n Subscribe <\/a>to the Vanguard News letters.\u00a0 To make a tax-deductible donation, please visit davisvanguard.org\/donate<\/a> or give directly through ActBlue<\/a>.\u00a0 Your support will ensure that the vital work of the Vanguard continues.<\/p>\n Categories: Breaking News<\/a> Housing<\/a> State of California<\/a> Tags: Affordable Housing<\/a> Berkeley Economy & Society Initiative<\/a> California affordability<\/a> Child Care<\/a> Medi-Cal<\/a> social safety net<\/a>