We are in the midst of an immense housing shortage in California, and our new Governor is on a mission to begin repairing it. Governor Gavin Newsom’s housing plan is part of his $1.75 billion 2019 housing crisis package. He spoke throughout his campaign about building 3.5 million new housing units in California by 2025. The plan consists of $250 million allocated to help cities and counties with planning, $500 million in housing production incentive grants for local governments, and $500 million for expanding the State Housing Tax Credit Program to spur middle-class housing production and modernizing long-term Regional Housing Need Allocation (RHNA) goals by 2022.
Governor Newsom had originally proposed that a possible way to hold cities and counties in California accountable to meet housing goals would be to withhold gas tax revenues, allocated for road repairs in most cases, if said cities or counties fall short in meeting their required numbers. In the past, California has failed to hold local governments accountable in meeting these mandatory goals, which has in turn led to years of stunted development in most cities in the state and exacerbated the housing crisis we are currently in. He was originally envisioning this accountability policy be implemented as soon as possible, but it is now being discussed as a future approach with a potential beginning in 2023 after a considerable amount of backlash came out against the idea.
Despite one idea being tabled, another route has been taken to combat a lack of housing development. Newsom sued Huntington Beach back in January, arguing that Orange County wasn’t allowing enough low-income housing. He’s threatened to sue other cities that fail to meet their housing targets. However, he has said that instead of withholding funds for cities and counties who fail to meet their required housing goals, he will instead reward those who do reach their goals.
Increasing middle-income housing is also part of Newsom’s plan; attempting to roll back certain restrictions that make building middle-income homes more challenging to encourage further development and increase housing supply. Governor Newsom has been looking into more ideas to develop housing supply. In April he announced that he had formed a partnership with the cities of Chico, Fresno, Oakland, Sacramento, San Diego and San Francisco to develop affordable housing on land owned by the state.
C.A.R. expressed strong support of Governor Newsom’s efforts; he has the support of REALTORS® in the undertaking of this extremely difficult, yet hugely important endeavor to begin solving the housing crisis in California. We need to continue to push the development of housing in California in order to help improve the current housing situation. Being progressive and innovative when it comes to housing is the first step in creating a better California, and with that we are behind Governor Newsom’s efforts.
The hope is that we will begin to see an upward trend of housing units throughout the state, slowly but surely solving this housing crisis and providing more housing opportunities for all levels of income throughout California. SAR will continue to keep a close eye on the progression of Newsom’s Housing Plan, and will be updating on this as it comes.