Hear from our Deputy Director Michael Lane about the Governor’s influence on tech industry investment throughout Silicon Valley.
Gov. Gavin Newsom talked big on housing. How has he stacked up so far?
He’s secured big sums for housing, but Legislature has yet to approve key policy changes
When Gov. Gavin Newsom took office in January, armed with big promises and bold ideas to fix the state’s drastic shortage of homes, housing advocates were so hopeful they were almost giddy.
Six months later, the governor has made it clear that housing remains a top priority. He landed a budget that includes a record $1 billion to fight homelessness and $1.75 billion to build more homes, launched a homelessness task force and put forward a plan that for the first time would fine cities that defy production rules.
But reversing a housing crisis years in the making is a daunting task. And without new legislation to dramatically boost production, Newsom will have a hard time meeting his ambitious campaign pledge — to build 3.5 million homes by 2025.
“From a dollars and cents perspective, the governor has been quite aggressive and largely successful in getting his budget to reflect his priority for housing,” said David Garcia, policy director for UC Berkeley’s Terner Center for Housing Innovation. “Now on the policy side, it’s been more of a mixed bag. Obviously, the most high-profile bills — the tenant protection bills, the zoning reform bills — those have largely not materialized in ways that the governor had indicated he would have preferred.”
Passing a budget with a serious housing focus has been Newsom’s top priority since taking office, Nathan Click, spokesman and director of public affairs for the governor’s office, said in a statement to this news organization.
“This is by no means the end of the road — California lags far behind the rest of the country in housing affordability and new home construction,” Click wrote. “The Governor believes the state can and must do more to address the housing shortage and the high cost of housing and rent, and he will continue working with the Legislature to do just that.”
Still, some housing experts say Newsom’s goal of building 3.5 million homes by 2025 is commendable but likely impossible.
“I think it’s good to have goals, but that amount of production I think would require production rates that we’ve literally never seen even at the most robust in California,” said Anya Lawler, a policy advocate specializing in land use for the Western Center on Law & Poverty. “So I don’t think it’s doable in that amount of time.”
Newsom is working to boost production by cracking down on cities that refuse to contribute to California’s housing stock. Early this year, he announced that the state was suing Huntington Beach, accusing it of blocking new housing required by state law. And on Thursday he unveiled a plan to fine cities up to $600,000 a month — and potentially allow a judge to take over their planning and zoning decisions — if they don’t produce plans to build adequate housing. Under the proposal, which still needs a legislative vote and the governor’s signature to become final, cities wouldn’t be required to actually build that housing. But they would be penalized for imposing restrictive zoning and other regulations that would make it impossible to meet their housing goals.
But Newsom’s housing-production efforts hit a major stumbling block in May when Senate Bill 50 — a controversial measure that would have re-zoned California to allow for more high-density buildings — was unceremoniously put on hold by legislators until 2020. Many experts say without significant zoning reform, Newsom will struggle to put a dent in the state’s housing crisis, much less build 3.5 million units. The majority of land in California is zoned for single-family homes, not apartments, which limits the state’s capacity to hold housing, according to the UC Berkeley Terner Center for Housing Innovation.
After the Senate Appropriations Committee killed the bill for the year, Newsom released a statement saying he was “disappointed by the committee’s decision.” But he had declined to endorse the bill while it was alive and demurred when asked about its merits in public, leading some activists to question why he didn’t do more for the measure.
It’s rare for a governor to advocate for a bill in the early stages of its legislative journey, but not unheard of, Garcia said.
Newsom also signaled support for tenant protection bills during his February State of the State address, issuing a challenge to the Legislature: “Get me a good package on rent stability this year and I will sign it.” But as rent stabilization bills began to march through the Legislature, and some died along the way, Newsom didn’t formally endorse them either. AB 36, which would have allowed cities to expand rent control, was shelved. Another bill that would have restricted a landlord’s right to evict a tenant (AB 1481) died before its floor vote, and one that would impose a state-wide rent cap (AB 1482) was watered down before it advanced. On Monday, legislators gave the failed eviction protection measures another chance by adding them to the rent cap bill. That joint bill is set for a hearing in the Senate Judiciary Committee later this month.
Some housing advocates were disappointed by Newsom’s tight-lipped approach. It would have made a “huge difference” to the bills’ chances if Newsom had blessed them with an official endorsement, said Laura Foote, executive director of pro-housing group YIMBY Action.
“I wish that if housing was going to be his number-one issue, he had wrangled a package together in a more effective manner,” Foote said.
But former Palo Alto Mayor Pat Burt, who opposes SB 50 for what he says is its simplistic approach and disproportionate focus on market-rate housing, commended Newsom for keeping the bill at arm’s length.
“I think he was right to not get sucked into allowing that specific proposal to define the solution to the problem, which, it’s really a multifaceted solution,” Burt said.
SB 50’s author, Sen. Scott Wiener, D-San Francisco, said Newsom has been “nothing but supportive and helpful” of the senator’s zoning reform efforts.
“I think overall people are being a little bit too hard on the governor,” Wiener said. “Yes, you come into the office with big plans, and that doesn’t mean you accomplish all your big plans in the first six months.”
Foote wants Newsom to call a special legislative session to give lawmakers another chance to pass housing bills this year — an idea state Sen. Jim Beall, D-San Jose, supports. A governor can convene such a session at his or her discretion, as Gov. Jerry Brown did for health care and transportation funding in 2015. So far, Newsom hasn’t indicated any such plans.
“The silence is deafening,” Foote said.
But many housing experts say Newsom’s budget speaks loudly — and, as the governor promised, it says housing is a top priority. The budget includes $500 million to help build affordable housing for low and moderate-income families and $500 million to fund infrastructure improvements needed for new housing projects. It boosts spending on low-income tax credits — one of the key components that funds affordable housing construction — by $500 million. And it sets aside $650 million to help local governments shelter their homeless residents.
Affordable housing production already has picked up since state housing bond measures Propositions 1 and 2 were passed in November, and the governor’s new funding likely will help continue that trend, said Kevin Zwick, CEO of Housing Trust Silicon Valley, which provides early-stage loans to affordable housing developers.
“There’s more activity happening,” he said. “Now that the state passed through the new funding sources…that’s just going to help move those projects through the system and you’ll see developments open up sooner.”
Michael Lane, deputy director of SV@Home, also credits Newsom with helping squeeze more housing dollars out of Silicon Valley’s tech industry. In January, Newsom called on Silicon Valley companies to put up $500 million to build workforce housing. Two weeks later, the Chan Zuckerberg Initiative, Facebook and others unveiled a $500 million affordable housing investment fund. And last month, Google revealed a $1 billion housing plan — the most ambitious housing effort a tech company has launched to date.
But many experts agree throwing money at the problem won’t be enough to reverse the housing crisis.
“I think there’s a question of, without zoning reform,” Garcia said, “is there enough capacity to build the number of homes that we need to alleviate the housing shortage in the long-term?”