We asked California gubernatorial candidates Gavin Newsom and Antonio Villaraigosa a series of questions about their unprecedented goals of having 3.5 million homes built in the state by 2025 to address the state’s housing shortage. Below are their written responses in full.
Los Angeles Times: The McKinsey report called for building 3.5 million new homes between 2015 and 2025 — 11 years — and you want to do it in seven. Why is your goal more ambitious than the report you based your goal on?
Lt. Gov. Gavin Newsom: It’s not just what I want to do — it’s what we must do to address California’s housing crisis, which worsens every day. The McKinsey report, published in October 2016, identified the goal of 3.5 million new homes by 2025 to close the housing gap, stabilize the state’s housing market and address our future needs. The next governor, who won’t take office until January 2019, must be prepared to prioritize and accelerate our commitment to affordable housing — and hold state government accountable for achieving it. This is why I have outlined a comprehensive housing reform and production plan that I will make a top priority from day one. As I have said, there is no single silver bullet to solving this crisis. It requires an aggressive, multi-pronged approach that engages every stakeholder and includes additional funding for affordable housing, implements financial and tax incentives for jurisdictions that produce housing — and penalties for those that don’t — and regulatory reform. Most of all, it requires focused leadership and the ability to bring diverse stakeholders together in common cause.
Times: Since 1954, the most amount of housing California has built in a single year is 322,018 in 1963 per Building Industry Assn. statistics. Given that, is it reasonable to expect to build 500,000 new homes annually for seven years in a row?
Newsom: When I embraced the goal of 3.5 million new units by 2025, I knew it was unprecedented and audacious. But it’s what must be done. A crisis of this magnitude requires ambitious goal setting matched with focused leadership and bold, innovative policy initiatives. It requires an affordable housing “moonshot.” We can’t stand by and do nothing as skyrocketing housing costs and the habitual undersupply of [housing] slowly erodes the California Dream and forces more families onto the streets and out of their communities. Achieving the 3.5 million target will require working with local governments to reform planning and zoning for housing production. It will also require streamlining burdensome regulations — with a focus on incentivizing affordable, inclusive and workforce housing projects.
Times: How many new homes do you expect each of your policy ideas to generate?
Newsom: We are failing to produce housing because the State has no mechanism to enforce or compel production. The problem is made worse by existing fiscal incentives for local jurisdictions to approve sales-tax generating uses rather than affordable homes. The state’s system for identifying housing production goals is also flawed and understates the need.
Currently, the California Department of Housing and Community Development calls for only 1.8 million new units by 2025. This goal will not stabilize the housing market, nor address the state’s worsening affordability crisis. Along with failing to address the actual need, these goals lack teeth and are routinely ignored by local jurisdictions through the Regional Housing Need Allocation (RHNA) process. We must completely revamp both the RHNA methodology as well as the State’s ability to leverage tax dollars and utilize fiscal incentives to ensure production targets are actually achieved. This would be a dramatic change to current policy and would give the State and local jurisdictions the necessary tools to address the housing crisis.
Times: Do you support the state’s goal of reducing carbon emissions by 40% below 1990 levels by 2030 as outlined in Senate Bill 32? If yes, state climate regulators and academics have said that to meet that goal the state needs to concentrate development near job centers and transit. So does that mean you would try to limit new sprawl development at the same time you’re pushing for a large increase in overall production? If you don’t support SB 32, would you encourage new sprawl development?
Newsom: I am a strong supporter of SB 32 and believe more must be done to reduce greenhouse gas emissions statewide. As the Trump Administration pretends global warming doesn't exist, it’s more important than ever for California to lead on climate action. A key component of addressing climate change is aligning land use policy with greenhouse gas reduction. Concentrating density near transit nodes is essential to both addressing the housing crisis and reducing vehicle miles traveled and mobile source carbon emissions. The State took a significant step by enacting SB 375, which required regional planning agencies to adopt Sustainable Communities Strategies to encourage land use decisions that reduce GHGs. More can and should be done. As the McKinsey study notes, increasing density within one-half mile from major transit hubs offers the potential to generate between 1.2 [million] and 3 million new housing units by 2025. Boosting infill, transit-oriented housing development is therefore critical to achieving the ambitious goal of 3.5 million new units by 2025.
Times: Do you support state Sen. Scott Wiener’s SB 827, which would significantly upzone residential land near transit? Why or why not? (Note: We asked this question before changes to the bill made on March 1.)
Newsom: I support the intent of SB 827, since California clearly needs more housing near public transportation. I know the bill is a work in progress and that Senator Wiener is working with local stakeholders to protect existing residents and other issues. I hope all sides can work together to craft solutions that move us toward a more affordable and sustainable housing future -- one that creates more housing while protecting existing communities.
Times: I spoke with a UCLA professor and an L.A.-based economist who said that to accomplish your goal you’d need, at the least, to dismantle Proposition 13, the California Environmental Quality Act or local control over zoning and potentially do away with all three. Are you proposing getting rid of any of them?
Newsom: I respectfully disagree. We can address the State’s housing crisis by altering the financial dynamics that underpin land use and planning, giving the state more leverage to compel housing production at the local level and accelerating approval and entitlement timelines and closing loopholes without eroding the core environmental tenets of CEQA. This would represent a bold change in policy and a significant departure from the State’s current approach of setting unambitious goals with no mechanism to compel results.
Times: I spoke with the head of the Associated General Contractors and an official with the Northern California Carpenters Regional Council. Neither said it was possible to build 500,000 units a year, the AGC person said because of a labor shortage and the Carpenters official said because developers’ returns wouldn’t be high enough to justify that amount of building. How do you respond to those concerns?
Newsom: Again, I respectfully disagree. Most of the experts and economists we’ve discussed this issue with believe that, if the overall economy remains strong and we take necessary steps to incentivize and accelerate new construction, continued demand will ensure continued developer returns — and there is no shortage of California companies looking to build. As for workforce, we can always do more to provide training through apprenticeships and other successful programs, but demand for skilled workers is a good problem to have. I would also point out that under SB 35 passed last year, new jobs created by those projects will pay a prevailing wage, attracting and retaining more skilled workers. All of this requires determination and constant diligence. California currently ranks 49 out of 50 states in housing production per capita — ahead of only Utah. From 2009 to 2014, California added 544,000 new households but only 467,000 net new housing units. New York, by comparison, added 80% more housing units during this period relative to population growth. We can and must do better — and I believe we will.