Does Prop 13 explain California's relatively lower birth rates?

In my last post I argued that Proposition 13 is the policy that ties California’s dysfunction together: it entrenches homeowner advantage, suppresses supply, and shifts the tax burden onto everyone who arrived after the good seats were taken.

A natural follow-up: if Prop 13 explains California’s housing crisis, does it also explain why California has fewer babies than almost any other state?

The chart below plots median home price against total fertility rate for all 50 states in 2023. The pattern is unambiguous: the more a state costs, the fewer children its residents have.

California sits at the far right end of that trend line. It’s the 2nd-most-expensive state, TFR of 1.48, down from 17th-highest to 43rd-highest since 2008, but the chart reveals that California isn’t an outlier from the trend. If you know a state’s median home price then you can predict its birth rate with uncomfortable accuracy.

This matters for how we assign cause: rising rents correlate with lower fertility for all age groups, hitting hardest among women in their 20s who are also the most likely to be renters. In California, 44% of households rent, which is the 2nd-lowest homeownership rate in the country (after New York), so high prices fall on exactly the people most likely to be making family-formation decisions.

Prop 13’s role in this story is real but indirect. The policy suppresses property turnover and gives long-tenured homeowners clear-eyed incentive to block new supply near where they reside. Constrained supply drives prices up. High prices suppress birth rates. Prop 13 is 3 steps upstream of the fertility data.

The telling counter-cases are Massachusetts, Washington, and Colorado. They’re expensive states with no Prop 13 equivalent and equally low fertility rates. Their housing costs rose through different mechanisms, and their birth rates fell to the same place.

The one clear outlier is Utah: $547K median home, TFR of 1.80 — well above trend. The LDS community’s emphasis on large families has long outweighed the housing cost headwind, though even that gap is narrowing.

So does Prop 13 entirely explain California’s low birth rates? No. Housing cost is the proximate cause, and Prop 13 is one of several upstream policies that are driving it. California’s fertility rate isn’t unusually low given its prices — it’s exactly as low as you’d predict.

Housing cost is the proximate cause. But California’s housing costs aren’t expensive the way Boston or Denver are expensive. They’re expensive because Prop 13 turned homeowners into a permanent political class with a direct financial stake in keeping supply restricted. The suppression runs through the ballot box, not just the market.