The Competition Paradox: Why Blue States Can't Build
How political monopolies created a constitutional crisis
Let's confront an uncomfortable truth: Blue states can't build.
A million people have fled California, yet housing prices keep climbing. Austin's rents just dropped 9% while San Francisco declares another housing emergency. And in an irony that would make Al Gore weep, Texas now builds more clean energy than California.
The standard narrative? Progressive politics kill development. But that's too simple.
Behind this crisis lies something deeper: a broken constitutional bargain and the forgotten power of political competition. It's not just about blue versus red—it's about who has to compete to survive.
Understanding this crisis begins with the Fifth Amendment—and how we broke it.
The Fifth Amendment's Forgotten Promise
"...nor shall private property be taken for public use, without just compensation."
These 12 words in the Fifth Amendment powered nearly two centuries of American growth. The bargain was simple: Government could restrict property rights for public benefit, but had to pay for what it took.
This elegant system built America:
41,000 miles of Interstate Highway in just 35 years
1.2 million homes built annually in the post-war boom
Massive water projects that turned deserts into cities
World-class universities while housing stayed affordable
How Courts Broke the Machine
Then in the 1970s, courts created a fatal loophole: a distinction between "physical" and "regulatory" takings.
The math became absurd:
Take someone's entire property? Pay full price.
Destroy 99% of its value through regulation? Pay nothing.
This judicial bug broke America's development machine. Why would any government buy land when they could regulate it for free? Why compromise when delay costs nothing?
This bug didn't affect all states equally. The damage varied based on one crucial factor: political competition.
A Tale of Three States
California: The Collapse of Competition, The End of Building
California once epitomized America's building ambition. From 1967 to 2011, political competition thrived—Republicans held the governor's mansion for 31 of 44 years while Democrats controlled the legislature. This balance forced compromise and produced remarkable results: the California Water Project, world-class universities, and over 200,000 housing units annually.
Then competition collapsed. The 2003 recall of Gray Davis marked the last truly competitive statewide race. Demographic shifts and redistricting eliminated competitive districts. By 2012, Democrats secured legislative supermajorities, while Republicans became politically irrelevant.
Without electoral accountability, the consequences were swift and devastating:
Housing permits plummeted below 100,000 annually despite population growth
Renewable energy development lagged behind neighboring states
After 15 years and $10B, the High-Speed Rail project has not finished environmental review
The state nearly abandoned Diablo Canyon, risking 9% of its carbon-free power
This transformation from "build state" to "stalled state" wasn't driven by progressive values—it was driven by the absence of political competition. When politicians face no electoral threat, special interests dominate: public employee unions, environmental litigation groups, and coastal homeowners protecting property values.
The result? A constitutional crisis so severe that even losing 800,000 residents since 2020 hasn't lowered housing costs. As Governor Newsom acknowledged, the cost of living remains the "principal driver" of outmigration, with housing affordability being the state's "original sin."
Texas: When Competition Drives Results
While California demonstrates what happens when competition collapses, Texas reveals how political competition—even within a Republican-dominated state—drives building success.
Despite Republican control of statewide offices, Texas remains politically competitive. Trump won by just 5.6% in 2020. Major metros like Houston, Dallas, and Austin maintain genuine political balance. This competition translates directly to building outcomes:
Austin's housing response tells the story. When the pandemic housing crunch hit, Austin faced the same challenges as California cities. But unlike their West Coast counterparts, Austin responded with action—meaningful zoning reforms that actually increased housing supply. The results were textbook economics: Austin built 957 new apartment units per 100,000 residents between 2021 and 2023, far outpacing any other major metropolitan region. By late 2023, over 10,000 new apartments had entered the market.
The outcome? Austin's average rent has fallen by 9.3% over the past year—the largest decrease among the top 50 U.S. metro areas. As City Council member Chito Vela admitted, "We were working under the premise for a couple of decades here in Austin that if we did not allow new construction, that would help preserve neighborhoods and hold down costs. That has just been objectively shown to be false."
The same pattern emerges in energy. Texas has built more wind and solar capacity than any other state. In 2022 alone, Texas added 7.7 gigawatts of renewable energy—nearly double California's 4.2 gigawatts. Wind and solar now generate 31% of Texas electricity.
This isn't despite Texas politics—it's because of them. Republicans who oppose renewables risk losing climate-conscious suburban voters. Democrats who oppose development appear ineffective. When margins are tight, neither party can afford ideological purity.
Arizona: The Laboratory of Perfect Balance
If California represents one-party Democratic rule and Texas shows Republican governance with competitive pressure, Arizona offers something remarkable: almost perfect political equilibrium.
Arizona isn't just competitive—it's mathematically balanced:
State legislature operates on razor-thin margins (17-13 Senate, 33-27 House)
Biden won the state by just 0.3% in 2020
Voter registration stands at near-perfect thirds: 35.9% Republican, 28.9% Democrat, 33.6% Independent
This balanced environment has made Arizona America's most effective building laboratory. Housing development in Phoenix has surged to 42,000 new units in 2023—twice as many per capita as similarly-sized San Diego. The state maintains stronger environmental protections than Texas while enforcing a 180-day maximum for permit reviews, preventing California-style endless delays.
Arizona's energy approach demonstrates how political balance drives pragmatic solutions. While California wavered on nuclear power, Arizona's Palo Verde Nuclear Generating Station—America's largest nuclear plant—continues powering 4 million homes with a 94% capacity factor. Meanwhile, the state has installed 5.2 gigawatts of solar capacity with another 2.8 gigawatts under construction.
The crown jewel of Arizona's balanced approach is TSMC's $40 billion semiconductor complex. Environmental reviews completed in six months. Bipartisan legislation funded $1.2 billion in infrastructure upgrades. Democrats secured labor protections while Republicans streamlined permitting. The result? America's most advanced chip manufacturing facility remains on schedule for 2025 production.
This success stems directly from political competition: Republicans can't ignore environmental concerns, Democrats can't strangle development with excessive regulation, and neither side can afford ideological purity.
The Competition Index: A New Way to Understand State Success
To test this hypothesis, I’ve created a simple Political Competition Index for all 50 states based on:
Average margin in statewide races (past 3 election cycles)
Legislative competitiveness (% of seats decided by <10% margin)
Primary importance (% of races effectively decided in primaries)
When we plot this index against housing permits per capita and renewable energy development, a clear pattern emerges: states with higher political competition consistently outperform one-party states—regardless of which party dominates.
The top performers in housing development? Texas, Utah, Arizona and Florida—politically diverse states with real competition. The worst? California, New York, and Illinois—all one-party systems with different ideologies but similar outcomes.
In renewable energy deployment (adjusted for resource availability), a similar pattern emerges. The fastest deployers include Texas, Arizona, Florida, and Georgia—states with varying political leadership but real electoral competition.
The Path Forward: Constitutional Rights Can't Wait
Political competition drives building success—the evidence is undeniable. States with real competition like Texas and Arizona still build because voters can punish paralysis. But constitutional rights shouldn't depend on local politics—they must be equally enforced everywhere.
While China builds entire cities for AI development, California can't approve basic housing. This paralysis in our most productive regions threatens America's global leadership. With California and New York representing 25% of American GDP, every state must be able to build for America to remain globally competitive.
The scale of what we need to build is staggering:
3.8 million new homes just to meet current demand
Data centers for AI will require >800 GW of clean energy by 2030
$3.8T of infrastructure investments to replace aging roads, bridges, and pipes
We can't afford to wait for political competition to return to one-party states. And we can't be globally competitive without thriving coastal economies.
The Founders understood that unchecked government power to seize or destroy private property was a form of tyranny. That's why they wrote the Fifth Amendment. But courts created an artificial distinction between "physical" and "regulatory" takings that broke this protection. Why would any government pay fair market value for land when they could regulate it into worthlessness for free? Today's regulatory state exploits this loophole, destroying property values without compensation.
The solution demands federal action:
Restore Judicial Protection: End the artificial distinction between physical and regulatory takings. When regulation destroys property value, the Fifth demands compensation.
Force Timely Decisions: Implement mandatory permitting deadlines with automatic approval. Environmental review should take months, not decades.
Create Compensation Funds: Establish state-level funds to pay for regulatory takings. Public benefits deserve public funding.
Mandate Regular Review: Every building regulation needs a sunset date. Force bureaucrats to justify why rules should continue.
No country has ever regulated its way to prosperity. We can protect our environment while building the housing, energy, and infrastructure we need—but only if we restore the Fifth Amendment.
This isn't just about housing or infrastructure or energy. It's about whether America will remain a nation that builds its future. The Constitution gives us the tools. Now we must use them.