Can This Plan Solve The Housing Crisis In California?

California Gov. Gavin Newsom dedicated almost all of his State of the State address last week to urge stakeholders to start solving a homelessness crisis he called a disgrace.

In his second State of the State address since taking office in January of 2019, Newsom pushed for several legislative initiatives, including resurrected efforts to stimulate multifamily development near transit. One of those, SB 50, a sweeping bill authored by Sen. Scott Wiener (D-11th District), would have wrested some control over zoning away from municipalities in order to stimulate such development, but it died last month. Still, Newsom made clear a commitment to work with the legislature on a replacement.

“I respect local control, but not at the cost of creating a two-class California,” he said.

While homelessness decreased in most states last year, it jumped by 16% in California, according to a report by the Department of Housing and Urban Development. Some bigger cities, like San Jose and Oakland, have seen increases of over 40% since 2017, according to point-in-time counts released by their respective counties.

“Let’s call it what it is," Newsom said from the Assembly Chambers of California's State Capitol. "It’s a disgrace that the richest state in the richest nation, succeeding across so many sectors, is falling so far behind to properly house, heal and humanely treat so many of its own people."

The governor also made available 286 state-owned properties, including vacant lots, fairgrounds, armories and other state buildings for local governments to use free of charge in homelessness relief efforts. 

That's an effective measure given how California’s land prices often stymie development, Bay Area Council Vice President of Public Policy Adrian Covert told Bisnow. But any effort similar to the defeated SB 50 would need more support from a faction of Southern California legislators that has yet to budge, Covert said.

"Southern California is about five to 10 years behind the Bay Area in terms of lack of housing availability," Covert said. "The heat is really felt in the Bay Area. It's hot down there, but it's not as hot yet."

The issue has also drawn criticism from President Donald Trump, who brought the Environmental Protection Agency in to censure San Francisco for its street conditions last year. 

Newsom outlined other immediate efforts aimed at homelessness relief. An executive order he issued last month deployed emergency mobile housing trailers to Oakland and Los Angeles County, with more coming to Santa Clara, Riverside, Contra Costa and Sonoma counties.

Newsom called on the state legislature to fund his newly proposed California Access to Housing Fund with $750M, which would provide gap financing for innovative housing production efforts like hotel and motel conversions, and he called for $695M to go toward mental illness treatment.

Still, a plan that doesn’t include statewide housing reform isn’t enough to fix the crisis, which is also exacerbated by the state’s restrictive zoning, lack of available housing funding and construction labor shortage, many experts say. Many of Newsom’s plans have a long way to go before becoming a reality, Covert points out.  

"There is no silver bullet to solving this problem,” he said. “You're going to have to chip away at it from many different directions.”