For one, California is split up into many smaller towns/cities in large metro areas, so each having their own policies leads to locally-optimal but regionally-suboptimal policies of trying to get as much commercial development as possible with as little residential development as possible. This is a direct contributor to gentrification (if you are “lucky” and able to soak up the commercial demand without increasing residential supply, you’ve created a mismatch between jobs and people in your area), ghettoisation (the people priced out of where they were before have to go somewhere), traffic (people have to commute into their jobs), and affordability (even the bad communities can’t increase housing much because they have the weakest tax base, plus all the restricted supply where jobs and taxes actually are).
The right solution to this problem is to recognize the whole local-optimization problem and make it so every municipality has to solve the problem at once, to prevent the adverse selection of solving the problem in only one municipality. Which is what the state of CA is doing.
This could also be addressed from the other side, which is a complete political non-starter, of trying to limit job growth. Obviously nobody wants to do that. But the problem by and large is not just that CA has a lot of low density communities that want to remain that way, but also that those low density communities are creating more jobs than they can house.