The Iced Coffee Hour

Episode: Why I Left California - Billionaire Rick Caruso Responds To Criticism, Homeless & CRAZY Home Prices

Hosts: Graham Stephan & Jack Selby
Guest: Rick Caruso (Philanthropist, Billionaire Real Estate Developer)
Date: December 14, 2025

Episode Overview

This episode features Rick Caruso, the L.A. real estate developer and former L.A. mayoral candidate, in a wide-ranging conversation with Graham Stephan and Jack Selby. The discussion digs into why Caruso ran for mayor, the problems facing California and Los Angeles—especially housing, regulation, and homelessness—his business philosophy, personal values, and his views on wealth and public service. The tone is candid, detailed, pragmatic, and sometimes personal, with Caruso reflecting on career highs and lows, misconceptions about billionaire entrepreneurs, and the urgent need for change in California’s political and regulatory climate.

Key Discussion Points & Insights

1. Why Caruso Ran for Mayor & Responding to Criticism

• Motivation for Running (02:00–03:48):
  • Caruso rebuffs claims he tried to “buy political power,” emphasizing his low profile versus career politicians and a genuine belief in fixing L.A.'s mismanagement.
  • "I ran for office because I saw massive negligence on part of the leadership in the city... I did believe that I could change the city. I still do today." — Rick Caruso (02:00)
• Leadership Lessons:
  • Stresses that he’s always believed in building the right team, creating a clear vision, and serving residents.

2. California & L.A. Housing Crisis

• Market Perspective (03:54–05:00):
  • Still bullish on L.A.’s long-term prospects despite the turmoil—attributes tough times to bad policy, not lack of fundamentals.
  • "I would not bet against L.A.... I think LA is the greatest city in the country." — Rick Caruso (03:54)
• Regulatory Challenges:
  • Overregulation, rent control policies, and regulatory bottlenecks are chasing away investors; LA is “redlined” for many banks and investors.
  • “It’s very difficult to run...I live it every day and I watch all of our retailers and restaurateurs struggling with it. So it is tough. There’s no doubt about that.” — Caruso (05:00)

3. Policies & Politics: What Needs to Change?

• CEQA as an Obstacle (09:52–13:00):
  • The California Environmental Quality Act (CEQA) once protected communities but now is weaponized to halt projects, particularly by special interests.
  • Caruso advocates for major reform, citing 30% of housing cost is regulation.
  • Explanation: “If you could knock 20% off the cost of housing… you’d have a housing boom.” — Caruso (13:00)
• Broader Political Gridlock:
  • Current city council dynamic is deeply anti-investor, and practical reforms are routinely blocked.
  • “It’s going to take a change of leadership.” — Caruso (07:00)

4. The Reality of Building in L.A. (Host’s Personal Experience)

• Permit Hell Story (14:11–15:52):
  • Graham details his ordeal with LA’s permitting bureaucracy—delays, inspectors giving conflicting demands, expensive “hidden” fixes—which cost $40k and five months.
  • "It's so frustrating that at this point I just want to say: I'm out." — Graham Stephan (15:52)
• Caruso’s Solution:
  • Thorough internal audits, better management, and top-down reforms by leadership focused on identifying and fixing bureaucratic bottlenecks. (15:53–17:00)

5. The Caruso Business Philosophy

• Disneyland Comparison (17:12–19:33):
  • “Run it like Disneyland”—perfectionism, cleanliness, safety, carefully crafted customer experiences, and relentless management walkthroughs.
  • “Our business mission isn’t building retail centers…it’s enriching lives. Depending on how you describe your business mission, either limits or expands your opportunity of what you do.” — Caruso (17:12)
• ROI of Hospitality (20:48–22:35):
  • Sometimes giving—blankets given at the Grove, open park space, free trolleys—directly leads to intangible returns like brand equity and hard-to-monetize but “massively significant” outside-building revenue.

6. Dead Shopping Malls & the Future of Retail (22:35–23:46)

• Most malls, like Santa Monica Place, are unsalvageable in their current form—Caruso says, “Knock it down…A third-story mall doesn’t work.”

7. Investments – Highs, Lows, and Lessons

• Best Investment:
  • “The best investment you always make in business is your team. For sure.”
  • The Grove & Rosewood Miramar hotel—examples of going against the industry’s “rules” and trusting his gut and team. (25:35–30:29)
• Worst Investment:
  • A failed Carlsbad project: lost $10 million due to losing touch with the local community and not following his playbook. (30:47–32:51)

8. Can California Turn Around?

• Time Frame for Change (33:05–34:13):
  • Caruso believes positive change could happen quickly with effective leadership and “changing the narrative.”
  • “Nobody headed west to fail...we’re going to go be that state again where your dreams come true.” — Caruso (33:05)
• Contrast with Las Vegas (34:13–35:17):
  • Co-hosts share their experiences of being welcomed by the Las Vegas business community vs. being penalized by L.A.

9. Entrepreneurs in Politics (38:03–44:20)

• Entrepreneurial Background in Government:
  • Proper management, accountability, and measurement of outcomes desperately needed; business leadership can fix government bloat and failure, especially homelessness spending.
  • “The advantage that I have is I’m not looking for a career in it...I really wanted to give back. I believe in higher purposes.” — Caruso (40:44)
• Dirty Nature of Politics:
  • Caruso recounts personal attacks and professional risks, especially during police reforms post-Rodney King riots, to illustrate the toughness needed to do “the right thing.”

10. Criticism, Misconceptions, and Wealth

• Biggest Campaign Misconception:
  • That he was seeking power or personal gain, refuting rumors about using “mayor power” to push projects (45:20–46:28).
• Being a Billionaire:
  • Rejects the notion that it's unethical. Sees his business not just as personal gain but as thousands of jobs and economic growth.
  • “I don’t think one thing has to do with the other…I’m very proud of my success and have given back to the community in a huge way.” (49:09)

11. Policy, Regulation, and Litigation

• Workers Suing Employers & Tort Reform (54:31–56:06):
  • California’s legal system is prone to abuse, with torts and regulations pushing business owners out, inflating costs, and draining public coffers.
• Mansion Tax Critique (56:49–57:26):
  • Mansion tax underperformed and chilled investment—another example of well-intentioned law backfiring.

12. Homelessness: Scale of the Problem & Solutions (73:31–78:44)

• The Problem:
  • L.A. leads the nation in homelessness, but Caruso believes it’s “completely solvable,” if the city scaled successful nonprofits, built supportive housing, and aligned policy.
  • “The city is caught...almost a million dollars a person to house them. It's ridiculous."
• Mental Health & Drug Addiction:
  • Any solution must include comprehensive services — not just housing.

13. Personal Approach to Wealth, Success & Philanthropy

• Money Myths (79:59–84:43):
  • Urges focusing on building great businesses rather than chasing a net worth number. His formula: “Work hard, sacrifice, and have integrity.”
  • “Don’t do business with bad people. You’ll never make a good deal.” (82:12)
• On Personal Upbringing:
  • His family were “rich in spirit” immigrants, working-class, and grateful for opportunity—not fixated on material poverty.

14. Advice to Young People & Future Plans

• Advice (87:34–90:22):
  • “Work really hard and follow your dream—as long as you’re really good at it. Figure out what you’re really good at, and then just work your ass off.”
  • His wife’s advice propelled him to leave law and start his company after being laid off; gut instinct, focus, and willingness to learn were key.
• Political Ambitions (57:40–58:23):
  • Still considering whether to run for mayor or governor, with decision “within the next 30 days,” focused on where he can do “the most good the quickest.”

Notable Quotes & Memorable Moments

On Billionaires & Misconceptions:

• “People have notions of what billionaires are like. They’re selfish or they’re disconnected… I couldn’t be any more different than that.” — Rick Caruso (28:00, 45:30, 46:00)
• “I don’t feel bad about my success at all. I’m very proud of my success and have given back to the community in a huge way in terms of our philanthropy.” (49:09)

On Struggling with L.A. Bureaucracy:

• “It’s so frustrating that at this point I just want to say, I'm out.” — Graham Stephan (15:52)

On the Future of L.A.:

• “I would not bet against LA... this city can turn around.” — Caruso (03:54)

On Policy Solutions:

• “If you could knock 20% off the cost of housing… you’d have a housing boom. It would be fantastic.” — Caruso (13:00)

On Running a Business:

• “Our business mission isn’t building retail centers… it’s enriching lives. Depending on how you describe your business mission, either limits or expands your opportunity.” — Caruso (17:12)

On the American Dream:

• “Nobody headed west to fail. We’re going to go be that state again, where your dreams are going to come true.” — Caruso (33:05)

On Homelessness:

• “California has the most homeless of any state in the country and LA has the most homeless of any city. Those aren’t awards that we want to have. I think it’s completely solvable.” — Caruso (73:37)

On Philanthropy and Personal Fulfillment:

• “The greatest income you make? It’s the psychic income. Tonight, come to the Grove and watch the snowfall. That is my income.” — Caruso (86:10)

Key Timestamps

• 02:00 — Why Caruso ran for office, debunking “buying power” accusation
• 03:54 — Rick’s outlook on L.A. real estate market
• 05:00 — On regulatory challenges killing investment
• 09:52 — The problem of CEQA and regulation
• 14:11 — Graham’s frustrating permitting story
• 17:12 — Operating properties like Disneyland: “enriching lives”
• 25:35 — Best/worst investment stories; team importance
• 33:05 — How quickly CA could turn around with right leadership
• 38:03 — Businesspeople in politics, and “higher purposes”
• 45:30 — Perceptions of billionaire candidates
• 49:09 — Responding to claims it’s unethical to be a billionaire
• 54:31 — Lawsuits, tort reform, and business climate anecdotes
• 56:49 — Mansion tax critique
• 73:31 — Homelessness: scalable models, real solutions
• 79:59 — Myths about money, wealth, and advice for young people
• 87:34 — Advice to young entrepreneurs: what to pursue and how

Tone and Final Takeaways

The conversation is direct, earnest, and sometimes philosophical. Rick Caruso defends business success and wealth creation as forces for good—if paired with integrity and public purpose—while being sharply critical of LA/California’s current political leadership, regulatory overkill, and lack of innovation. He insists most of California’s problems are solvable, highlights systemic failures, and offers a blend of business acumen, hands-on management, and civic optimism as the required prescription—even hinting at another run for public office.

For listeners wanting a broad, in-depth, and unusually candid account of the intersection between business, politics, and society in L.A./California—this episode is must-hear.