Gov. Newsom Takes a Very Expensive Crack at Fixing California's Housing Shortage


California Gov. Gavin Newsom has made some bold promises about fixing the state's housing shortage. Unfortunately, most of the Democrat's solutions are heavy on government spending and light on the regulatory reform that would bring rents and home prices down.

"No one should live in constant fear of eviction or spend their whole paycheck to keep a roof overhead," Newsom said in his inaugural address. "We will launch a Marshall Plan for affordable housing and lift up the fight against homelessness from a local matter to a state-wide mission."

A budget proposal released by Newsom on January 10 calls for an additional $1.3 billion in state funding geared toward kickstarting new housing production. Of that amount, $250 million will go to local governments as "technical assistance"—allowing them to hire more bureaucrats, process more permits, streamline existing permitting processes, or alter zoning codes to allow for more density. The state also set up housing production milestones, and another $500 million will be on hand to reward municipalities that hit their targets. The plan also calls for a $500 million one-off funding increase for moderate-income housing.

Zoning law reform is sorely needed in California, but Newsom's proposal is an outrageously expensive way of going about it. California's legislature already has the power to force local governments to loosen up zoning. It doesn't need to bribe them. Indeed, the past two years have seen several legislative attempts to wrest some zoning decisions away from municipalities. So far, Newsom has declined to explicitly endorse those efforts.

In addition to dangling carrots, Newsom is perfectly happy to use the stick. In February, his administration invoked powers under a 2017 state law to sue the Orange County community of Huntington Beach over its failure to zone for sufficient housing. Huntington Beach has countersued, arguing that its status as a charter city allows it to set its own housing policies, Sacramento be damned.

Newsom's lawsuit might strike some as overkill, but when local control has resulted in so many restrictions on new housing, direct state intervention can be a positive development.

That case will likely drag on for some time, as will budget battles over affordable-housing funding. Newsom's rhetoric shows a commitment to addressing California's housing shortage, and he's even willing to use new legal tools to get the job done. So far, however, he appears reluctant to embrace the types of regulatory rollbacks that would make a real difference.

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  1. After careful consideration I have reached the following conclusion: this country needs more immigration.

    1. Especially California.

    2. “failure to zone for sufficient housing. ” I didn’t realize that this is a mandate?

      Reason for Investors to accept Mandatory Section 8
      Reason for Dictatorship
      Reason for Totalitarianism
      Reason for states over local rights
      Reason for feds over state rights
      Reason for eminent domain
      Reason for tyranny
      Reason for crony capitalism

      I believe Reason did not write about the eminent domain used in the Keystone Pipeline–gee I wonder why?? Got Koch?

  2. “Newsom’s lawsuit might strike some as overkill, but when local control has resulted in so many restrictions on new housing, direct state intervention can be a positive development.”

    No, direct state intervention is never a positive development.

    1. What about when the SCOTUS strikes down local and state laws that limit gun ownership or speech rights?

      1. The big picture calls that “state disintervention”.

      2. Why pick such a controversial example? What about something non-controversial, such as the federal government striking down Jim Crow laws?

    2. Apparently Reason likes them some government mandates, next come the rations

      1. I like government mandates well enough when they are mandates not to regulate. Government telling government what not to do isn’t so bad. I’m pretty OK with reining in local governments being a major role of more central governments.

        1. Not that that’s what California is necessarily doing here.

  3. Newsom’s rhetoric only shows another example of ctrl-left power grab.

    His actions only limit local power so state power can replace it. If he actually cared about making housing more affordable and more plentiful, he’d use his power to limit both local and state power over zoning and cut the damned expense and trouble of building housing.

    Actions speak louder than words.

    1. This and eliminate building departments so people can build economical homes such that they don’t need a loan or insurance

      1. Perhaps reduce the ‘green’ regs which require expensive glazing, HVAC equipment, etc.

  4. More bad economic news.

    “Star Wars Movies Will Take a Break After Episode IX, Disney Says”

    As if all the store closings in this terrible economy weren’t enough, now Disney realizes people don’t even have the disposable income to go to the movies anymore.


    1. That’s okay, since I took a break from Star Wars movies after Episode VII.

    2. “Disney realizes people don’t even have the disposable income to go to the movies anymore.”

      More like…

      Disney realizes people don’t want to waste their disposable income on crappy SJW indoctrination filled movies anymore.

    3. They’ll never recapture the magic of ‘A New Hope’. Downhill ever since.

      1. The Holiday Special was great!*

        *Not really

      2. They don’t need to recapture anything . They need to quit making bad films that retcon the original story into an incoherent mess.

  5. “250 million will go to local governments as “technical assistance”—allowing them to hire more bureaucrats, process more permits, streamline existing permitting processes, or alter zoning codes to allow for more density.”

    Streamlining existing permitting processes is a farce. Some counties may sometimes experience lags through the permitting process alone (Inland Empire), but California’s CEQA rules means that any new development takes at least 18 -24 months just to do an EIR alone (and that assumes there are no hiccups).

    What difference does it make if they cut three or six months off of a nine month permitting process when the CEQA process still takes at least 18-24 months?

    1. Another way to look at it, even IF IF IF the changes Newsome is offering really did encourage developers to put up more housing than they would otherwise–those changes cannot translate into more housing for at least 18-24 months of permitting plus another six months of construction.

    2. They had to find something to replace the community development scams.

  6. Newsome doesn’t come close to just getting out of the way. More paths through government. Dumb.
    My old home town ran afoul of affordable housing rules. We had plenty of affordable housing, but it did not count since the federal gov’t did not provide the funding. Interference with locals when it is none of their business.

  7. If you’re not in favor of statewide adoption of the Japanese zoning system in California, including by-right development, you’re not really in favor of affordable housing.

  8. The claim is that SF would approve more housing if they had more clerks to process the paperwork?

    Do they actually believe this?

  9. Expensive crack? There’s an idea: That should make people forget their housing problems!

  10. In other states people who need housing hook-up with people who want to provide housing in a voluntary exchange. Only socialist hellholes can screw up something this simple.

  11. OT – Special sauce

    “Boston Globe Unpublishes Column Suggesting That Servers ‘Tamper’ With Trump Officials’ Food

    ““ONE OF THE biggest regrets of my life is not pissing in Bill Kristol’s salmon,” read the original opening. “I was waiting on the disgraced neoconservative pundit and chief Iraq War cheerleader about 10 years ago at a restaurant in Cambridge and to my eternal dismay, some combination of professionalism and pusillanimity prevented me from appropriately seasoning his entree,” he wrote.

    “The ultimate process that led to the article’s final removal appears to have been a painful one…”

  12. Bills requiring that babies born alive after abortion receive the same lifesaving care as other newborns are a threat to the pro-choice cause, says Calla Hales, who “oversee(s) two abortion clinics”.

    “What strikes me is the clear hypocrisy of these bills. These pieces of legislation emphasize that any “live” birth must be subject to lifesaving measures. This entirely disregards the input of both the physician and the parents involved in any birth situation. It would revoke the option for a parent to sign a “Do Not Resuscitate” order to limit their infant’s distress, specifically in cases of possible debilitating fetal defects. The legislation would also conflict with the recommendations from medical professional groups that a preterm infant be at least at 22 weeks’ gestation for physicians to provide active life-saving interventions rather than palliative care.

    ““Born alive” bills jeopardize the ability of physicians to provide adequate care in these instances by threatening felony murder charges if a live birth is not immediately given lifesaving measures. To put it bluntly: These bills are blatant attempts for legislators to control how and when physicians provide care.”

  13. It is seldom an improvement for the state to take control from local government.

    If the state action were to increase individual liberty, protecting citizens against government coercion, that might be such an example. But this isn’t one of those.

    Zoning decisions are best made by neighborhood vote of property owners, rather than by the state or city politicians.

    1. No question. You are 100% correct.

    2. Spot On Correct…Reason logic:
      “Newsom’s lawsuit might strike some as overkill, but when local control has resulted in so many restrictions on new affordable housing, direct state intervention can be a positive development.” Reason neglected to add the word “affordable” in that paragraph, I threw it in there, since this is what Newsom it promoting and mandating.
      Therefore, lets replace the word housing with Berkshire stock:
      There is a shortage of affordable Berkshire stock. Why not let the federal government or SEC override the Directors and shareholders. No buybacks for Berkshire. A one time government mandate for all Directors and C-suite to sell ‘X (50%?)’ portion of their shares to lower the price for 99 percent of the global population that desires affordable Berkshire stock.. however the Government sees fit.

  14. The moron left in California ruined affordable housing production by ending redevelopment that had a built in plan and local funding to produce units. Little Jerry Brown was a disaster and Newsom appears like he is ready to double down on foolishness. If he really cared, he would end the requirement for prevailing wage and forcing union labor on housing projects which jacks the price up.

    With that said, the problem in California of affordable housing, homeless housing and housing production in general is one that will require deep pockets, financial investment and the that is probably going to be government. The cost of the homeless problem is more than likely greater than the cost of significant amounts of temporary and transitional housing.

  15. One point not mentioned in any article re Huntington Beach vs Calif is the matter of geography. H.B has pretty much zero undeveloped open space. As evidenced by it’s flat population growth, HB has been built out for decades. Essentially, the only development has been redevelopment. The redevelopment that has taken place consists of the Pacific City retail/hotel area on the coast and 5 story high density housing along the Beach/Edinger corridor. What this fight boils down to is that the state stole about 75 million in redevelopment funds from the city and the resulting pissing match. The leftist in Sacramento have decided to make examples of the uppity vassals. Some reading for those interested:

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