California’s Housing Struggles Predate the Newsom Administration

Governor Newsom

Homelessness has become a hot-button issue in California Gov. Gavin Newsom’s administration. However, as a recall election looms, the Governor faces blame for a problem that predates his administration.

During his campaign, Gov. Newsom promised to dramatically expand the state’s housing supply, boost its affordable housing credit, and expand its homeless services. He also wanted to streamline housing regulations to help achieve his goal of building more than 3.5 million new homes.

“Housing cannot just be available – it must also be within reach,” Newsom’s campaign website says.

However, since taking office in 2019, homelessness and housing insecurity have been rising across California.

According to the Homeless Policy Research Institute, the number of people experiencing homelessness in California has grown by nearly 20 percent over the past three years. There are now more than 160,000 people experiencing homelessness in California, more than one-fifth of the nation’s total.

Meanwhile, flat wage growth and skyrocketing home values threaten to put more Californians on the street. The Department of Industrial Relations reports that the state minimum wage has increased just $2 up to $14 per hour over two years while consumer prices have risen four-fold.

The pandemic only made these issues worse. The state’s unemployment rate peaked at 16 percent in April 2020 as California’s economy shed more than 2.4 million jobs.

To combat these issues, Gov. Newsom signed the largest economic stimulus package in state history. It includes more than $5.8 billion to build 42,000 new homes and another $500 million to help tenants purchase their homes if their landlord decides to sell. Newsom also supported expanding the state’s Earned Income Tax Credit program to reduce poverty.

Yet with homelessness set to explode across the state, it doesn’t seem like any single administration can solve California’s backlog of housing issues.

Where California Went Wrong on Housing

According to the Public Policy Institute of California, new residential construction declined by over one million units between 1980 and 1990. This caused home values to skyrocket by 95 percent over the decade as the state’s population grew by over six million people.

Over the same period, California’s median household income grew by just 17 percent, up to $35,978. However, the number of households making more than double the median income shot up by 800 percent as well, according to a report by the Los Angeles Times.

While the ’80s and ’90s feel like lifetimes ago, many of the same trends in California’s housing market are alive and well today.

The latest data from the Census Bureau shows that single-unit homes comprised 55 percent of new residential construction in California last year. Multi-unit homes with five or more units comprised 40 percent of new home builds.

Meanwhile, single-unit residential home starts in California topped 1.1 million in June, representing month-over-month growth of more than six percent. Home starts for buildings with five or more units were just 474,000.

According to the Employment Development Department, California’s statewide median wage is now just over $63,000 per year, up 43 percent from 1990. However, home prices in the state have more than quadrupled over three decades. They currently stand at more than $800,000, according to the latest market report from the California Association of Realtors.

Homelessness Placed by the Wayside

While housing starts reflect the private market’s appetite to build market-rate homes, California lawmakers have done little to incentivize new construction that benefits low-to-no income residents.

The Bay Area provides a perfect case study. A recent analysis by the nonprofit group Enterprise Community Partners found that over $4 billion in funding is needed to complete affordable housing projects currently stuck in the state’s vicious review process.

A study by found California is the second-most expensive state to build housing in because of taxes, fees, and labor costs. State regulators added fuel to that fire by passing a law requiring new multi-unit housing buildings to include solar panels beginning in 2023.

At the same time, several measures that would strengthen California’s homelessness response system are collecting dust in the State Assembly.

During Newsom’s first legislative session as Governor, lawmakers failed to pass several bills relating to housing stability and addressing homelessness. Some examples include:

  • Assembly Bill 67, which would have required local homeless response agencies to create an inter-agency data warehouse, and
  • Assembly Bill 1534, which would have required the Department of Housing to put forth a regional homelessness resolution plan by January 1, 2022

How You Can Help

Now is not the time to be silent about homelessness in California or anywhere else. While it is easy to blame a single politician for today’s housing struggles, the truth runs much deeper. Poverty and homelessness are both policy choices, not personal failures. That’s why we need you to contact your officials and tell them you support legislation that:

  • Streamlines the development of affordable housing
  • Reduces barriers for people experiencing homelessness to enter permanent housing
  • Bolsters government response to homelessness

Together, we can end homelessness.

Robert Davis

Robert Davis

Robert is a freelance journalist based in Colorado who covers housing, police, and local government.

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