Matt Mahan

We are in blue cities and states.

You'll have a situation where you've gone through a planning process, you've zoned a given parcel for, say, multifamily housing, and then the process to actually do the entitlement and the permitting and allow someone to develop it.

as multifamily housing can take two years.

I think our CEQA, which is our Environmental Quality Act in California, is legendary for allowing anyone anywhere to sue for almost any reason.

And so things can get, investments can get caught up in the courts for years and ultimately die just under the cost.

So part of it is bureaucracy and litigation risk.

Part of it is, I think you sort of alluded to this, almost a resource trap.

It's the weirdest thing, but it's sort of like the countries where you have this abundant natural resource, and so you sort of over-rely on that, and then therefore don't have to innovate or solve harder problems.

I think in California, we've become very used to the notion that high-income earners, and particularly the tech sector, are going to generate this outsized returns, and revenue's just gonna always go up

5% to 8% every year up into the right.

And so you'll end up in these situations where we have huge surpluses, and then they just kind of get absorbed into the bureaucracy.

And we don't have enough accountability around, are we spending the dollars efficiently?

And then I think there's outright fraud.

I mean, look, we just had the example of

fraudulent hospice claims that are being investigated, potentially billions of dollars.

We know during the pandemic, California had over $30 billion worth of fraudulent unemployment claims.

So I do think there's outright fraud, but my sense is by an order of magnitude, it's waste, it's process, it's litigation.

It's just a system that can't execute anymore.

And that's the challenge is all of those legal protections and bureaucratic processes, they were well-intended.

I mean, we layered on all of these steps because we wanted to protect the environment and have strong labor standards and make sure we did a lot of community engagement and tons of checks and balances.