Since Newsom assumed office in 2019, California has permitted approximately 650,000 housing units, averaging 110,000 annually. While this represents progress—up from 70,000 units permitted in 2018—it’s far from the 500,000 annual pace required to meet his original target. This shortfall prompted Newsom to revise his goal in 2022, setting a new benchmark for cities to plan for 2.5 million homes by 2030. To date, only 1.1 million of these homes have been planned.
Despite legislative efforts, California’s housing costs continue to soar. Adjusted for inflation, the median home price rose from $698,908 in 2017 to $868,150 today. These escalating prices highlight the persistent mismatch between housing supply and demand, which Newsom’s administration has struggled to address.
Bollag outlines several hurdles to progress, including high construction costs, restrictive environmental regulations, and a fragmented permitting process. UC Davis law professor Chris Elmendorf notes that while Newsom’s legislative victories have had some success—like encouraging accessory dwelling units and creating a Housing Accountability Unit—they have not significantly reduced overall building costs or streamlined project approvals.
There are bright spots in Newsom’s record. His Roomkey and Homekey programs provided emergency shelter and housing for tens of thousands, while the Housing Accountability Unit has effectively held local governments accountable, compelling them to approve over 7,800 housing units that might otherwise have been blocked. These achievements suggest that incremental gains are possible when state authority is assertively applied.
Newsom’s challenges echo themes I’ve explored before, particularly the high costs associated with stringent building codes and housing regulations. In Kansas City, adopting the 2021 International Energy Conservation Code (IECC) led to a dramatic reduction in housing starts due to increased costs, pricing out many prospective buyers. Similarly, California’s reliance on cumbersome processes and expensive mandates continues to hinder affordability. As I’ve argued, local governments often undermine housing goals by layering costly regulations on developers under the guise of progress.
Newsom’s revised goal for 2030 and his recent executive order to lower building code costs hint at a pivot toward more pragmatic solutions. However, these changes must be coupled with aggressive action to simplify permitting, reduce regulatory burdens, and incentivize private investment in housing. As economist Thomas Sowell famously said, “There are no solutions, only trade-offs.” Policymakers must weigh the trade-offs between environmental preservation, local control, and the urgent need for affordable housing.
Bollag’s article underscores the complexity of California’s housing crisis. While Newsom’s bold promises haven’t materialized in full, the incremental successes achieved offer a blueprint for future efforts. If California is to address its housing crisis meaningfully, the state must not only continue enforcing housing mandates but also tackle the systemic inefficiencies that make building so costly.
For a governor who has long championed bold initiatives, the lesson from this housing saga is clear: ambition must be matched by implementation. California deserves nothing less.
