“If elected, I pledge to lead the effort to develop 3.5 million new housing units by 2025 to address the state’s affordability crisis.” That was candidate for governor Gavin Newsom’s promise to the California electorate in 2018 when he was running for the state’s office of chief executive.
As we know, Newsom was elected – by a landslide, in fact. But, after a year in office, California’s housing starts have actually decreased. Indeed, the best the Governor has done for housing is to watch from the sidelines as a majority of Democrat lawmakers passed utterly nonsensical legislation which, actually, made housing production less likely in a state starved for a dramatic increase in supply.
According to a recent report of the Construction Industry Research Board (CIRB), while national housing starts were up mightily last year they declined in California by 11 percent. During that time, multifamily starts in the state dropped by 34 percent despite surging nationally – by over 71 percent.
“I think that Governor Newsom made an error – an error that all politicians make when they come to office – in promising so much,” said Sherry Bebich Jeffe, a retired USC professor and oft-quoted political pundit.
Some might argue with Jeffe’s assertion that this was just an unkept campaign promise, however. Newsom admittedly needs some help with his math (to meet his pledge, for example, California would have to produce 500,000 units per year – nearly twice the state’s high-water mark), but he had made boosting the supply of affordable housing a centerpiece of his gubernatorial bid. At 110,000 units – last year’s total – he is well below the normal level of annual housing production and far from the numbers he needs to achieve his mid-decade pledge.
Predictably, the Legislature is being of little help. As previously mentioned, the housing initiatives coming from the Capitol have been worthless in terms of production. In fact, while killing the bills that had some promise, lawmakers passed legislation that systematically hurt and did not help housing production.
Take last year’s AB 1482, by San Francisco Democrat David Chiu – the liberal Chairman of the Assembly Committee on Housing and Community Development. He successfully contended that without the existence of some form of cap on rents a standard increase was classified as gouging. So, he got his bill and Gavin signed it into law. Now California has production-stifling statewide rent control.
From the Senate came a wolf dressed like a sheep. The bill was SB 330 by Oakland Democrat Nancy Skinner and was advertised as local land-use reform. But, the cleverly drafted legislation didn’t reform local land use at all. Instead, it protected things like previous, voter-approved growth-control laws – good news for the sponsors of Alameda County’s earlier SOAR growth-limiting initiatives – and preserved hurtful provisions of laws like CEQA and the Coastal Act.
Although locals are still essentially responsible for all aspects of housing project approvals, what’s done in Sacramento means something. Whether it’s killing redevelopment, requiring solar panels on all new homes, upholding punitive laws like CEQA, imposing caps on rents, penalizing projects for carbon emissions, mandating affordable housing, requiring pristine stormwater, enacting laws that protect certain critters and much more, the actions taken – or not – by the Governor and his minions occupying dozens of agencies, boards and commissions and state lawmakers have consequences for housing affordability and production.
For those of you who believe that things will get better with time – that it takes awhile for the Sacramento-based reforms to take effect – consider the observation of the California Building Industry Association (CBIA), the final arbiter of what’s good and bad for housing in California.
“This year is starting out poorly for more production of all types of housing,” said CBIA’s Dan Dunmoyer, the homebuilder association CEO.
That should be a warning to Governor Newsom and the Legislature: 2020 looks like another bad year for housing, and 2025 isn’t far off.