Incoming Gov. Gavin Newsom has a plate full of very large problems.
He needs to effectively manage California’s huge economy — the fifth-largest in the world — while dealing with the impact of an unprecedented series of devastating wildfires, learning to build and negotiate a relationship with Democrats in the Legislature and working on intractable policy issues like health care coverage, inequality and education.
But the heaviest item on that plate must be California’s affordable housing crisis. Ordinary people are priced out of homes as prices skyrocket. Renters and owners both can’t keep up. This is an enormous problem that could choke California’s thriving economy and force many state residents to leave in search of lower housing costs.
The problem is multifaceted. Construction of new housing units isn’t happening fast enough. According to a policy paper by the California Department of Housing and Community Development, the state needs 180,000 new housing units annually — but only 80,000 are being built.
The destruction of homes by the recent wildfires tragically exacerbates this issue. Sonoma County lost 5,300 homes last year to fire — and reconstruction has been slow, and many residents have had to deal with insurance coverage that has fallen far short of their actual costs.
Across the state, home ownership rates are as low as they’ve been since the 1940s, giving California the second-lowest rate in the nation. A majority of renters pay more than 35 percent of their income to their landlords.
Homelessness is growing, with all the attendant social issues. California now has a fifth of the nation’s homeless population.
Newsom, a true policy wonk, has ambitious plans. He wants to build 3.5 million new housing units by 2025. He supported passage of the $4 billion statewide housing bond that voters approved when they elected him governor. He also wants the state to pour more tax credits into affordable housing — about a five-fold increase in the $85 million currently provided.
He wants to work with localities to help them meet housing goals, though his approach would utilize both carrots and sticks, according to his plan: “It’s also time to hold local jurisdictions accountable for housing production. Today, we ask cities to meet housing goals yet offer few incentives to help meet them and impose few consequences for failing to produce units.”
He also plans to establish an Interagency Council on Homelessness to focus statewide leaders on that issue.
Ambitious plans or not, the new governor is going to have to learn to simultaneously work with legislators who want to enact statewide solutions and local government leaders who are uneasy about mandates being handed down, not to mention residents who worry about the impact of new development — more traffic and overcrowding — on their quality of life.
That concern may have been a factor in the Election Day defeat of Measure N, a $124 million bond measure meant to address Santa Rosa’s housing issues. It fell far short of the two-thirds vote needed for passage.
Newsom needs to face this crisis head on. Housing costs are straining all but the wealthiest of California families — and, left unchecked, the issue could slam the brake on the state’s thriving economy.
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