Gavin Newsom began his governorship this month by promising to confront what he described as California’s most important issue, an ever-increasing shortage of housing.

“This is the issue,” Newsom said as he introduced his first state budget.
California’s chronic housing shortfall, particularly for low- and moderate-income families, and its soaring costs are an existential threat to the state’s economy and its social fabric.
The cost of housing is the primary factor in California’s shameful status as the nation’s most poverty-stricken state, and undercuts efforts to alleviate poverty through such gestures as higher welfare grants, higher minimum wages and the state’s new “earned income tax credit.” Putting a few more dollars in the pockets of the poor will accomplish little if they are immediately soaked up by higher rents.
“We’re not going to play small ball on housing,” Newsom declared. He pledged to establish “more realistic” regional goals for housing and warned cities that failing to meet them would have financial consequences – cutting off transportation aid from the state’s new gas tax increase.
He also supported fast-tracking housing projects through the California Environmental Quality Act process, reducing the heavy “impact fees” that local governments impose on housing construction, making more excess highway right-of-way available for housing and jawboning employers, particularly those in Silicon Valley, into helping build housing for their workers.

Pledging a Half-Billion Dollars for New Housing

“We are doing our part and I will be asking them to do their part,” he said.
Silicon Valley got the message and within days its leaders created a new “partnership” that pledged a half-billion dollars for new housing.
Last week, Newsom underscored his insistence that local governments meet their housing quotas, even if their voters don’t like it. He announced that Attorney General Xavier Becerra was suing Huntington Beach for stubbornly refusing to meet housing goals.
“The state doesn’t take this action lightly,” Newsom said. “The huge housing costs and sky-high rents are eroding quality of life for families across this state. California’s housing crisis is an existential threat to our state’s future and demands an urgent and comprehensive response.”
It would be fair to say that in just a few weeks, Newsom has been more engaged in the housing crisis than predecessor Jerry Brown was during the previous eight years. However, it’s just a beginning. Even though he says his budget would spend $7.7 billion on housing, that’s only a third of the investment needed to increase housing production by 50 percent over current levels, and state and local governments don’t have that kind of money.

200,000 Housing Starts a Year

There’s only one way for California to reach the ambitious goal that Newsom declared – 200,000 housing starts a year – and that’s to make private investment more attractive by cutting red tape and shunning such fallacious notions as rent control.

Suing a strongly Republican city such as Huntington Beach is a no-risk move for a Democratic governor, but is he willing to crack down on anti-housing liberal communities such as Marin County, his home before winning the governorship? Two years ago, Brown signed legislation giving Marin, and only Marin, a decade-long exemption from meeting housing quotas.
Still another tricky factor is the woeful lack of construction workers. Newsom would have to confront numerous impediments to training more carpenters, electricians, plumbers and other building trades, including an education system biased toward college-prep, rather than skilled trades, and construction unions themselves.
Newsom has raised the performance bar on himself over an issue whose outcome is easily measured. He’ll either clear the bar or fall short.
CALmatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary.
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