In January, not even a week into his new job, Gov. Gavin Newsom made a big, bold threat to cities that have stalled or shirked their responsibility to build enough housing to meet their community’s needs.
Don’t build housing? You won’t get state transportation dollars, the governor warned.
Six months later, Newsom is settling for a more incremental, but still necessary, change. The Legislature is expected to sign off this week on a bill that would allow a judge to impose steep fines — up to $600,000 a month — on cities that willfully flout the state’s “fair share” housing law, which requires that jurisdictions plan and zone for enough market-rate and affordable housing to meet population growth.
Note one big difference: Newsom originally wanted to hold cities responsible for actually producing enough housing to meet state goals. The compromise with the Legislature merely requires them to plan for enough housing.
This isn’t exactly the dramatic action on the state’s debilitating housing shortage that Newsom pitched. His original idea to withhold gas-tax-funded transportation dollars proved to be a nonstarter with legislators, who feared a public backlash, particularly after Californians voted to uphold the gas tax hike to pay for local road repairs and transit investments. Cities, too, raised concerns about whether they could meet new homebuilding goals.
There are currently few consequences for local governments that fail to comply with the basic requirements of the state’s ‘fair share’ housing law.
The revised proposal offers what Newsom and legislative leaders describe as a carrot and-stick approach. The carrot is the promise of more money for jurisdictions that adopt “pro-housing” policies. Those cities would have an advantage when applying for state grants, including for cap-and-trade dollars for transit-adjacent affordable housing and for funding for sidewalks, sewer lines and other infrastructure projects to support housing development.
The stick is the threat of steep fines for cities that repeatedly refuse to zone enough land to accommodate sufficient affordable and market-rate housing. Yet those penalties could only be imposed after a lengthy process. The attorney general would have to file a lawsuit — as Newsom and Attorney General Xavier Becerra did earlier this year against the city of Huntington Beach.
Under the bill, if a judge agreed with the state, the city would have another year to come into compliance. If the city still refused, it would face rising penalties that could reach $600,000 a month relatively quickly. Eventually, the judge could appoint someone to take over the zoning and land-use for the city.
The stick would fall only on cities that are the most obstinate. It is a necessary step because there are currently few consequences for local governments that fail to comply with the basic requirements of the “fair share” law.
This change, even if it won’t result in a flood of new homes getting built in the next few years, is an important step in a process of overhauling the state’s laws to require local governments to make room for more housing at all income levels. But it’s only one step. There’s a lot more work needed to further tighten laws and to make sure they are enforced, so that it’s harder for elected officials to bend to NIMBY impulses to block reasonable housing projects.
The lack of housing, especially affordable housing, is driving an epidemic of homelessness. Even people who don’t become homeless often cannot afford to live in coastal urban areas, and have to move to far-flung suburbs and commute hours to where the jobs are, worsening traffic and air pollution and greenhouse gas emissions.
Employers say high housing costs also hurt the state’s economy by making it hard to attract and retain skilled workers — a problem that has led some companies to relocate to states where their middle-class workers can afford to buy homes.
Newsom was right to think big on California’s housing crisis, which he called “an existential threat to our state’s future.” The compromise bill before the Legislature is a worthwhile reform, but the governor needs to keep pushing for much more change if California going to finally end the housing shortage.