Newsom Woos, Threatens Cities in Bid to Build Housing

SACRAMENTO, Calif. (CN) – Giving teeth to his $1.75 billion housing plan, California Governor Gavin Newsom on Monday proposed opening up the state’s coffers and rewarding cities that meet stricter short-term housing goals.         

California Gov. Gavin Newsom. (AP Photo/Jeff Chiu)

The Democratic governor, who during his campaign called for 3.5 million homes to be built in California by 2025, wants to dip into what his administration estimates is a $21 billion surplus and prompt cities and developers to build new affordable housing. The plan includes $250 million to help local governments hire more staff and eliminate red-tape and other housing barriers, with an additional $500 million available to agencies that meet their housing targets.    

Under Newsom’s proposal, regulators would scrap existing short-term housing goals and dole out higher targets for cities and regional housing organizations. In a move certain to be both unpopular and litigious, Newsom also wants to deny cities funding for street repairs if they haven’t updated zoning laws or made progress on housing by July 2023.

“Our state’s affordability crisis is undermining the California Dream and the foundations of our economic well-being,” said Newsom in a statement. “Families should be able to live near where they work. They shouldn’t live in constant fear of eviction or spend their whole paycheck to keep a roof overhead. That’s increasingly the case throughout California.” 

Part of the housing blueprint would require the state to link transportation funding with housing goals beginning in 2023. Cities that ignore the state-mandated long-term housing goals and reforms wouldn’t receive portions of funds generated from the state’s new “gas tax” that are meant for local road repairs.

Newsom’s proposal won’t sit well with mayors or many in the Legislature, including state Sen. Jim Beall, D-San Jose. Beall said earlier this year that withholding SB 1 funding from cities would “go against the will of the voters” that approved SB 1 last November.

“To avoid delays localities need to be able to make plans to move SB 1 projects, like filling potholes and dangerous safety and road repairs, ahead without the threat of losing funds,” Beall tweeted.

Assembly Republican Leader Marie Waldron said Newsom’s plan “won’t get the job done.” 

“The governor is ignoring what’s actually driving the housing crisis – the high cost of building, including the abuse of environmental laws that tie up projects for years and expensive mandates that add thousands to the cost of a home,” Waldron said in a statement. “Local governments understand their communities best. One-size-fits-all state mandates might be the only thing in Democrats’ playbook, but they’re not going to solve the housing crisis.”

While introducing his first budget proposal in January, the former mayor of San Francisco said his administration would not be “playing small ball on housing.” Since then California sued a city for refusing to build new affordable housing units and he warned during his State of the State address that there’s “got to be accountability” for the other dozens of noncompliant cities.

Last month Newsom held a housing roundtable with a collection of California mayors to solve the state’s housing and homeless emergencies and didn’t rule out the possibility of more lawsuits.

On Monday, Newsom outlined his playbook for boosting a housing boom.

In what would be executed through the state budget and a series of budget trailer bills, the proposal not only scraps existing housing targets and rewards cities that build new housing; it includes $1 billion to expand existing state housing tax credit programs that encourage developers to build new affordable housing projects. Critics say the programs are underutilized and need a jumpstart.

%d bloggers like this: