In the 2018 gubernatorial race, Democratic California Governor Gavin Newsom promised to address the state's urgent need for affordable housing.
However, as his term nears its end, California's housing crisis persists, despite his assurances.
Newsom's ambitious pledge to create 3.5 million new housing units by 2025 has fallen significantly short, according to Conservative Daily News. Despite lowering their target, his administration has failed to accelerate production. The housing predicament in California remains dire, with low housing permit rates, soaring costs, and one of the lowest homeownership rates in the country.
Newsom's aspiration for 3.5 million units was short-lived. In 2022, he announced a revised target of 2.5 million new housing units by 2030, calling the original goal "a stretch." However, during the timeline for the initial 3.5 million-unit goal, California only saw 737,295 new privately owned housing units, as per the U.S. Census Bureau. This figure represents roughly a fifth of his initial target. The production in the first eight months of 2025 alone was nearly 16,000 fewer units than the same period in 2022.
Newsom's tenure saw the highest number of new housing permits in 2022, with 120,780 units built. To meet the revised target of 2.5 million units, California would need to more than double its current housing production, equating to approximately 310,000 units per year.
A recent retirement study revealed that California is experiencing the "highest negative net migration rate" across all generations. This trend is indicative of the state's ongoing housing crisis and the inability of many Californians to afford a home.
Republican California State Sen. Tony Strickland, who represents much of Orange County, identified the permitting process as a significant obstacle for builders. He revealed that it took developers in Huntington Beach a decade to navigate through the California Coastal Commission (CCC) and the permitting process for a residential and commercial development project. "When it takes you ten years to build a development, that's going to be passed on to the consumer," Strickland said.
The affordability crisis in California is escalating, with homes in the state now twice as expensive as the average U.S. home. A recent report from the state's Legislative Analyst's Office attributes this to rising mortgage rates and home prices since 2020. A survey by the Public Policy Institute revealed that over four in ten Californians are worried about their ability to pay their rent or mortgage.
Newsom has signed two housing bills into law this year. AB 130 aims to cut red tape and exempt housing projects from strict California Environmental Quality Act (CEQA) oversight to expedite unit production. SB 79 focuses on building high-density housing near public transit systems. However, Strickland argues that these measures only address part of the housing problem while exacerbating others.
AB 130 includes a vehicle miles traveled (VMT) tax, which imposes a fee on developers building in areas with fewer transit options. Strickland warns that this tax could be passed from developers to homebuyers and renters, resulting in higher mortgages and increased rent. "The [VMT] hidden tax will go into your mortgage, will go into your home buying," Strickland cautioned.
The Los Angeles Business Federation echoed Strickland's concerns, stating that the VMT tax could add $197,000 to the cost of a new home and increase monthly rents by $1350. They warned that this tax could disproportionately harm low-income families and households of color, further exacerbating California's housing crisis.
Strickland also criticized Newsom's policies promoting high-density housing near transportation systems, like SB 79, as favoring urbanization at the expense of suburban areas. "A lot of Californians want to live in rural areas or they want to live in suburban areas," he said. "If [Newsom] really wants to solve this housing crisis, he needs to do all he can in terms of lowering the price on construction cost, he needs to do whatever he can in terms of labor and he also needs to fast track a lot of the overregulation."
As Newsom's term draws to a close, Californians may have to brace for new fees passed on by developers. Strickland urged Californians to look beyond Newsom's rhetoric and examine his record. "Don't look at his rhetoric, look at his record," he advised.
A spokesperson from Newsom's office defended the governor's efforts, stating that he has created a generational and foundational model to meet California's housing needs. "The Governor has adopted new accountability strategies, streamlined building and permitting, and made historic investments to help communities build more housing and make homes more affordable. We've made progress, but more work needs to be done," the spokesperson said.
In 2021, Newsom established the Housing and Homelessness Accountability Unit. According to a September 2024 press release, the unit had "unlocked" over 7,500 housing units in the state over the past two years. However, this figure is a mere drop in the ocean compared to the millions of units initially promised, leaving Californians to grapple with the ongoing housing crisis.
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