Politicians risk the wrath of voters if they can’t make headway on an issue that has huge financial ramifications for most households. Governors are responsible for guiding a broad strategy for building more houses, and they must navigate cumbersome laws and regulations that hike up construction costs and delay ribbon cuttings for new developments.
Population changes spurred by the pandemic, Byzantine zoning laws that make construction agonizingly slow and expensive, and stagnant wages amid stubborn inflation rates have all contributed to years of skyrocketing housing prices. Leaders in Washington, including President Biden, have shown little ability to get a handle on the issue. That’s putting even more pressure on governors to come up with solutions to the affordable housing crisis.
But those state leaders are facing steep obstacles — and potential electoral consequences in November if they fail to make inroads. The issue is increasingly critical for Americans across demographic and partisan lines, with a recent poll showing three-quarters of voters citing housing affordability as a significant problem.
Since his first month in office, Governor Gavin Newsom has touted lawsuits filed against cities that flout state-assigned targets for building new homes. He’s also signed dozens of bills that mandate local governments streamline their planning processes.
Governor Newsom argues that cities, especially his hometown of San Francisco, have blocked new housing by subjecting developers to endless planning reviews and complaints from neighbors, including objections over architectural character and obstructed views.
The governor has been equally sharp in his criticism of deep-blue and red locales that object to housing mandates — from the liberal Bay Area to GOP-led beach towns in Orange County.
“You’re either part of the problem or you’re not,” Newsom said last month at a press conference where he criticized Millbrae, a small city south of San Francisco that is fighting a project to convert a La Quinta Inn into homeless housing.
State officials estimate that California must plan for 2.5 million new housing units by 2030 to begin to meet the needs of its 39 million residents and address soaring prices. That would require cities to plan for about 180,000 new units annually; last year, construction started on fewer than 112,000 units.
We believe this will lead to a great opportunity for investors and developers in the coming years. As the demand for housing continues to rise, those who invest in new developments now will be well-positioned to reap significant rewards. Contact us for more information on these exciting opportunities and how you can be a part of the solution to the housing crisis.