Chuck Marohn  00:00

Hey, everybody. This is Chuck Marohn with Strong Towns. Earlier this month, I participated in a summit—the REACH Ideas and Action Summit at UC Santa Barbara. It was a great experience. I was on a panel with Jim Wunderman from California Forever. Some of you may recognize California Forever as the proposed new city north of Silicon Valley.

I spoke, and then we had a moderated dialogue. I’m going to share my remarks and that conversation with you today. I think you’ll find it interesting. I really liked Santa Barbara—it’s a great city with a strong local conversation doing meaningful work. I’m not against California Forever; I actually find parts of it very interesting. I do think they have their work cut out for them, and it’s not how I would approach California’s housing crisis. But as you’ll hear, if the only option is doing big things, what else do you do in California?

Enjoy this. I hope you get some value out of it.

Chuck Marohn  01:41

Hey, friends. I come from Minnesota. I arrived yesterday—we got four inches of snow before leaving—so it’s delightful to be here.

At Strong Towns, we are serious about abundant housing. Housing is broadly not affordable, and we need to fix that by creating millions of new housing units.

We don’t treat that as a slogan—we deeply believe it. That leads to a key question: how do we actually deliver broad affordability? One of the biggest barriers is the financial system housing operates within.

I co-authored *Escaping the Housing Trap* with Daniel Herriges. The central idea is that housing cannot be both a broadly appreciating financial asset and broadly affordable. In our current system, the financial side always wins.

Before the Great Depression, housing was abundant and affordable, though low quality. Financing was local, short-term, and required large down payments.

During the Great Depression, we created programs to stabilize housing—longer loans, lower interest rates, and federal backing. After World War II, we used those tools to push housing prices upward, fueling growth and the expansion of the middle class.

But we built in patterns that weren’t financially sustainable. We simplified complex cities into systems optimized for efficiency, cutting off the feedback loops needed for adaptation.

Over time, this led to instability—bank crises, securitization, and eventually housing bubbles. Today, the real product in housing markets is the mortgage, not the home itself.

We now operate within overlapping markets: housing supply and demand, and capital supply and demand. As long as capital dominates, affordability will remain out of reach.

When prices slow or fall, capital retreats, and investment dries up.

Chuck Marohn  10:32

At Strong Towns, we have a three-step approach to creating broadly affordable housing.

First, reform local regulations to make entry-level housing legal—backyard cottages, duplexes, and small-scale conversions.

Second, build an ecosystem of incremental developers—small-scale builders and trades that can deliver housing at the neighborhood level.

Third, create financial tools that support these projects through partnerships between cities, local banks, and philanthropy.

I’ll close with an analogy from Dunkirk. Large ships couldn’t evacuate troops effectively. The breakthrough came when small, adaptable boats were deployed.

To solve the housing crisis, we need those small, incremental solutions. It’s time for a bottom-up revolution in housing.

Jocelyn Brennan  14:02

These are two very different approaches: building a city from the ground up versus expanding a city incrementally through zoning and small-scale change.

How did each of you get motivated to work in this space?

Chuck Marohn  14:34

My entry point wasn’t a single moment. As an engineer and planner, I noticed we could always fund projects upfront, but we couldn’t afford to maintain them.

Our development pattern was generating far less revenue than needed—we were growing ourselves into insolvency.

The question became: how do we better use what we’ve already built? Cities have made promises they can’t keep. We need to increase productivity—more housing, more tax base, and more activity per block.

Jim Wunderman  16:34

I was introduced to Strong Towns through Chuck’s book, and I brought our plan for California Forever.

Our founder, Jan Sramek, grew up in a small village in the Czech Republic. After working in finance, he came to California expecting vibrant communities, but instead found disconnected suburban sprawl.

He envisioned building a city where jobs and housing coexist, where quality of life is high, and where families feel safe.

We’ve spent years assembling land and planning this project. It’s different from traditional sprawl—focused on walkability, mid-rise development, and efficient infrastructure.

We’ve also worked on housing policy, including accessory dwelling units, which have been one of the most effective tools for increasing housing supply.

But incremental solutions alone won’t close the gap—we need millions of units. To achieve that, we need new approaches, including building new communities like this one.

Jocelyn Brennan  21:55

Community engagement is where housing often breaks down. People support housing in theory but resist it locally.

What does effective community engagement look like?

Chuck Marohn  22:28

California has one of the most dysfunctional local dialogue environments. Public engagement often feels like theater rather than meaningful conversation.

At Strong Towns, we focus on neighborhood-level engagement. We have over 300 local groups working to help people understand incremental housing solutions.

When people see that a duplex or backyard cottage is just normal, everyday development, it reduces fear and resistance.

Jim Wunderman  24:58

California’s housing shortage stems from decades of underbuilding and a strong anti-growth culture.

We’ve made progress through legislation and policy changes, but it’s been slow and iterative.

We need multiple solutions: smarter use of existing cities and new communities where appropriate. Housing is essential for economic health, and we must address it comprehensively.

Jocelyn Brennan  28:36

If you could change one thing about housing production and permitting, what would it be?

Chuck Marohn  29:04

In Minnesota, we have a 60-day rule. If a project complies with the code, the city must approve or deny it within a set timeframe.

Local governments should set clear rules and process applications efficiently, rather than micromanaging development.

Jim Wunderman  30:51

We need to reduce barriers like excessive fees and exactions that make housing financially unviable.

Even entitled projects often don’t get built because costs are too high. Reforming these financial constraints is critical.

Jocelyn Brennan  33:33

What opportunities do you see for regions like Santa Barbara?

Jim Wunderman  33:53

Communities need to identify where growth makes sense and build thoughtfully and incrementally.

We need balance—preserving what makes places special while still producing housing.

Chuck Marohn  34:39

This region is already beautiful. The next step is to mature and strengthen existing cities by making them more productive and adaptable.

You also have more flexibility than larger metros, which gives you an opportunity to lead.

Norm Van Eeden Petersman  35:57

This episode was produced by Strong Towns, a nonprofit movement for building financially resilient communities.If this matters to you, consider becoming a member at strongtowns.org/membership.