California is still in a housing crisis, yes. The cause, low inventory leading to higher prices. OK so how did we get ourselves into this mess? The process for developers to build is a tough and many layered one, let's talk about a few major contributors:
1. There are layers of departmental regulations to get through in order to build: the building department, health department, fire department, planning department and perhaps most importantly, a city council.
2. NIMBY - or 'Not In My Backyard' giving local residents a voice to oppose new developments as it will change the dynamic in their neighborhoods and property values.
3. CEQA - or 'California Environmental Quality Act' requires that local agencies consider the environmental impact of a new housing development before approving it.
4. Limitations have been placed on the number of new homes that can be built within various cities.
5. Some say prop 13 caps the property tax local governments can collect from home owners which may cause them to prefer building a commercial business versus housing on vacant lands.
6. Prop 5 defeat on the ballots last year - the proposition was authored in order to help increase movement of seniors and disabled and free up housing for new buyers, but it was defeated which may have created a stagnant situation with housing
So what is Governor Newsom proposing? Will it help with California's housing crisis?
Here's the breakdown of his plan:
$500 million in one-time cash for local governments to combat homelessness—of that $300 million will go towards regional planning, and $200 million as awards for cities that build new shelters or permanent supportive housing
An increase from $80 million to $500 million for the state’s most important low-income housing financing tool, the low-income housing tax credit
$500 million in one-time cash for “moderate-income” housing production, Newsom said he has also urged Silicon Valley firms to match this funding
$25 million to get more homeless Californians on federal disability programs
$500 million in awards to cities and counties that meet new, short-term housing goals for low-income and market-rate housing
In addition Newsom has threatened cities that fail to meet these goals, by taking away transportation funding - including revenue generated by the recently enacted gas tax.
Yeah the plans sound great, but will they be functional? All we can do is wait and see.