California households know it too well. State lawmakers – at least when asked – say it is. Academicians and pundits write about it all the time. Now, both Republican John Cox and Democrat Gavin Newsom – finalists in the race for the state’s top job, which voters will decide in November – agreed in a recent forum that the pervasive lack of affordable housing is California’s number-one issue.
In a wide-ranging hour-long debate, each of the two gubernatorial candidates said California’s housing problems stemmed from the state’s chronic lack of supply and both pledged to dramatically increase the amount of development. Both candidates agreed that tackling issues such as housing affordability, homelessness and California’s cost of living should be the public-policy priorities of the next governor and his administration. But, as the debate wore on, it was clear that the candidates see the problems – and the solutions – differently.
On the housing front, while Newsom pointed to the need for tax reform to spur local governments to approve more housing, Cox said he’d roll back environmental regulations to make housing construction cheaper and faster.
Indeed, Cox’s view is that government excess is the primary reason for the state’s annual shortfall. He said the state doesn’t build enough housing each year because it costs too much. He said the solution is for government to get out of the way and in Sacramento work at the Capitol to ease certain environmental laws to allow for cheaper housing construction.
“Government – with its red tape, taxes and lawsuits – has driven up the cost of housing,” he said. “The status quo is no longer working for average Californians and things have to change.” He said Newsom, who has been in political office for two decades, is too entrenched to make such changes.
Furthermore, he said special interests in Sacramento are at the root of the cost problem and cited the lawsuit-filled legacy of the California Environmental Quality Act (CEQA) as evidence. Because of the real or perceived threat of CEQA litigation, he said, it takes four to five times as long in California to get housing approved compared to other states. Behind the litigation, he said, are environmental and other groups who, thanks to generous campaign contributions, have so overtaken the policy considerations of lawmakers that they are afraid to lead from the state Capitol. Cox has called for the repeal and replacement of CEQA, saying its time has come and gone.
Conversely, Newsom feels like state government needs to become more involved than it is today. “There is a certain point where the state of California needs to intervene – to incentivize good behavior or dis-incentivize bad behavior,” he said. He noted that, as an example, currently the Bay Area’s regional transit authority is exploring withholding transit dollars from locals that aren’t meeting as yet undefined housing production goals. Newsom is considering adopting the policy.
While the Democrat also confessed that local opposition to development is a real problem, state government is AWOL when it comes to setting housing goals and he blamed the current tax structure – that favors retail development over housing – for California’s production woes.
To a follow-on question by the debate moderator – asking if solving the sales-tax condition locally meant the candidate was putting Proposition 13 on the table – Newsom was dismissive. “Everything is on the table,” he said. Real estate groups have been fighting relentless efforts to “split the roll” on Proposition 13 – the long-standing constitutional provision that limits property taxes on real estate sales – establishing a different rate for non-housing transactions.
Newsom admitted that CEQA can be trouble locally but criticized Cox calling for its repeal and said the law should be preserved. For socially desirable projects – presumably defined as football stadiums and sports arenas backed by well-heeled donors – there should be CEQA exemptions, he said.
Newsom touted his 15 policy solutions “for addressing the housing shortage and specific plans for reducing the state’s growing homeless population.” One of them, he boasted, is establishing a replacement for the housing-generating redevelopment agencies – a necessary reform. Another was inexplicably quadrupling the size of California’s low-income tax credit.
But, to those proposals Cox argued that the state budget – which he complained had needlessly grown this year to $200 million – shouldn’t be subsidizing people to live in apartments with high rents. “I’d just as soon see more (unfettered) building, producing lower rents,” he said.
In the end, neither Cox nor Newsom won the approximately 60-minute debate which covered issues in addition to housing – including climate change, law enforcement and gun control. It was a draw. But, the forum is unfortunately the only time California voters will have chance to hear, not see, what the candidates have to say to each other. That’s because this now-past event was only a radio broadcast and is all the two have scheduled together.