Just replacing a lot of old urban single-family homes with triplexes would be enough to get significantly ahead of housing issues in many major US cities, including in California.
Unfortunately, the sheer regulatory expense of new housing is such that it's not worth it for anyone to try any project short of big apartment/condo buildings.
The demand for new housing in California is high enough to absorb pretty significant costs and I'd be willing to bet regulatory expense is not even in the top 3 factors driving building costs (and definitely not the top 2), so saying it's "not worth it" seems like it ignores the top of the market (which tends to be the market migrating in to CA) that's willing to pay a premium for what they want where they want.
With some of the recent changes to building policies I think we're going to find out that NIMBY local policy and regulation aren't the fundamental problem, but we're up against the limits of how capital naturally engages with building projects: chasing demand towards the high end of the market and staying well back from diminishing marginal returns.
When I look at the link, it seems to contain a spreadsheet with no information, but let's say $150k is true.
Market prices of homes in places like Freemont tend to run from the high 6 figures through the low 7. Knock off $150k and we have maybe a 20% price reduction (probably closer to 15%). Nice to have but hard to figure out how that represents the largest portion of anything.
Land homes sit on costs more than $150k, maybe north of twice as much in Freemont-like areas (unless the lot is weird, inaccessible, or otherwise has issues that make it difficult to build on).
I'm not sure how one is going to get total materials and labor to come in less than $150k for most single family homes in CA. Maybe with small square footage and a good deal of luck with labor and materials? You tell me how to build for less than $120/sqft and I'm sure I'm not the only one who's all ears.
Seems to me to get regulatory expense to be the single largest item for building a home, we'd have ignore land, then play the game of lumping together all such expenses while splitting out building and labor, and even then I'm still not sure how it actually adds up.
I don't think anyone is proposing to installed another 8 million people in Mendocino. Places like San Francisco and the East Bay have tons of water rights because they were originally outfitted for tens of millions of residents before being suddenly down-zoned around 1970. The East Bay Municipal Utilities District currently serves less demand for water than it did in 1980 because of systemic efficiency improvements, despite the fact that the served population increased 50% since then.
Also, there is the small fact that apartment dwellers use a tiny fraction of the water of people who live in detached houses.
In short, there is plenty of water in various major metropolitan areas.
