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California’s next governor wants to build 3.5 million new homes by 2025

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Is that even possible?

Construction on a new house
Over the last 10 years, an average of less than 80,000 homes have been built in California per year.
Rachid Jalayanadeja/Shutterstock

In a fiercely partisan election year, much of Governor-elect Gavin Newsom’s campaign centered on his very public feud with President Donald Trump, not his policy proposals for California.

Some voters might be surprised to learn, then, that the governor-elect has a bold plan to solve California’s housing crisis. Newsom’s proposal: Build more housing—a lot more.

In a 2017 post published on Medium, Newsom declared that as governor he would oversee construction of 3.5 million new units of housing in California by 2025, amounting to roughly 500,000 units per year, were the tally to start right away.

That would require some aggressive building strategies. Over the last 10 years, an average of less than 80,000 homes have been built in California annually, according to the state’s housing department.

An underwhelming amount of housing production has exacerbated housing shortages in nearly every major city in the state, contributing to escalating rents and home prices. A 2016 report from McKinsey Global Institute finds that California ranks 49th out of all 50 states in terms of per capita housing construction.

The number of homes Newsom proposes to build would be unprecedented. Since 1954, developers have constructed more than 300,000 units in a year only twice. To reach 3.5 million units by 2025, California would have to build housing at a rate unmatched even in boom years.

“This just seems impossible,” says Paavo Monkkonen, associate professor of urban planning at UCLA’s Luskin School of Public Affairs.

“I think it’s easy for politicians to give bold numbers,” he says. “It’s harder to figure out how to actually make that work.”

Newsom does have a plan, though. To encourage construction of new housing, the governor-elect has pledged to make more tax credits available for affordable housing developments and to support voter-approved bond measures that finance housing construction.

He’s also promised to hold cities accountable when they fail to meet housing goals established by the state—as 526 municipalities did in 2017.

According to Newsom, incentives could be made available to cities that reach housing goals; cities that don’t meet those goals could lose out on state dollars for transportation projects.

(Asked for more detail on the housing plan, Newsom’s campaign spokesperson, Nathan Click, directed Curbed to the 2017 Medium post.)

Monkkonen says these are steps in the right direction, but they don’t address restrictive zoning requirements in California cities that make dense housing extremely difficult to construct.

“The fact that we have such high rents, yet we’re not seeing a lot of new construction really means that there’s a major bottleneck there,” says Monkkonen.

Attempting to wrest control over land use away from local governments could be politically risky for the new governor.

A 2017 proposal in the state legislature to allow more dense housing near transit stops drew outrage from city officials and neighborhood advocacy groups across California. The bill was defeated in its first committee hearing.

Building so many new homes in such a short amount of time could also create new issues for elected officials to deal with. In June, economist Jerry Nickelsburg, director of the UCLA Anderson Forecast, told Curbed that Newsom’s plan would require immense infrastructure investment to ensure that residents living in all that new housing don’t put a strain on local services.

Monkkonen says it’s more important that California leaders find a way to ensure housing construction keeps pace with demand than it is to reach a specific number of total units.

Still, he offers one possible route to Newsom’s 3.5 million-unit goal: building an entirely new city from scratch (one with more permissive zoning rules and plenty of available land).

“I think a new city could get us there,” he says. “I’m not sure it’s a good idea though.”