Democratic Governor Gavin Newsom of California began his term in 2018 with a commitment to tackle the state’s growing affordable housing crisis. However, even after nearly seven years in office, California still grapples with housing shortages.
Newsom set an ambitious target of constructing 3.5 million new homes by 2025, though progress has been sluggish, prompting his administration to scale back this goal. Despite his intentions, Californians continue to deal with low housing permit issuance and soaring costs, alongside one of the nation’s lowest home ownership rates.
The initial goal of 3.5 million units quickly became labeled as aspirational. In 2022, he revised the aim to 2.5 million new homes by 2030, yet under the original timeline, California would have needed nearly 740,000 new private housing units to meet the target. Instead, production has dropped even lower than previous years.
Data from the Census Bureau reveals that 2022 saw the greatest number of new housing permits under Newsom’s leadership, with over 120,000 units constructed. But, still, the state faces a pressing need for an increase in production, as current targets are insufficient to meet demands.
Recent studies highlight that California has recorded the “highest negative net migration rate” among all age groups. Republican state Senator Tony Strickland pointed to the cumbersome permitting process as a key obstacle for builders. He shared an example of how one development took a decade to navigate through the California Coastal Commission.
As the state’s housing issues continue to worsen, Californians find themselves increasingly unable to afford homeownership. Since 2020, rising mortgage rates and home prices have significantly elevated monthly payments, making properties in California costlier than the national average.
Concerns about financial stability are prevalent, with over 40% of Californians anxious about meeting their rent or mortgage obligations, according to a recent statewide survey.
This year, Newsom enacted two housing bills aimed at reducing bureaucracy and facilitating development. One of these measures, AB130, exempts certain housing projects from stringent environmental regulations, while another bill, SB79, promotes constructing high-density housing near public transit.
While Strickland acknowledges the potential benefits of AB130, he argues it addresses only part of the solution and could exacerbate other issues. For instance, a vehicle mileage tax included in the bill could impose extra costs on builders in areas lacking transportation options, leading to higher expenses for homebuyers and renters.
Strickland insists that the ongoing challenges reflect an affordability crisis rather than simply a housing crisis. He noted that hidden taxes such as the proposed VMT tax would disproportionately impact low-income families and add significant costs to new homes.
There’s a growing sentiment among many Californians desiring to maintain their suburban lifestyle, and Strickland suggests that if Newsom genuinely wants to resolve the crisis, a comprehensive approach to reduce construction costs and eliminate overregulation is necessary.
With just a year remaining in Newsom’s term, residents may anticipate new fees rather than a surge in housing production. Strickland advises looking beyond Newsom’s rhetoric to gauge his record on housing.
A spokesperson from Newsom’s office pointed to various initiatives aimed at bolstering housing supply and making it more affordable. They claimed that strides have been made, although much work still lies ahead. In 2021, Newsom established the Office of Housing and Homelessness Responsibility, which has reportedly facilitated the creation of over 7,500 homes across California in the past two years.
