Top Democratic Candidates Agree on Housing Urgency, Not the Fix

The leading Democratic candidates for governor in California want to see housing production scaled up dramatically, but that’s hardly a new concept — so did Gavin Newsom.

Campaigning for the office in 2018, Newsom laid out a goal of building 3.5 million new homes across two terms in Sacramento. As his final year as governor winds down, most projections show the state will fall drastically short of that goal despite Newsom signing hundreds of housing laws and other measures designed to spur new construction and free up existing projects to be completed.

Clearly, the housing crisis resists any single solution. With that said, Xavier Becerra and Tom Steyer, by far the top two Democratic candidates in the party’s own polling data, have more substantive differences over housing policy than some of their debates and appearances might suggest.

In multiple public comments, housing forums and his own campaign site, Steyer has made it clear that he’s swinging for the fences. The billionaire’s plan revolves around sweeping changes to the corporate tax structure that would provide new revenue for massive construction projects, streamlined permitting processes and “industrialized construction” that favors modular and prefab housing.

Becerra, with a history that includes years as the state’s attorney general, is more focused on enforcing housing laws that are already on the books to push reluctant cities and communities to fulfill their obligations. He also wants to speed up construction of what his campaign site says are 40,000 affordable housing units across California that have been held up by local regulations. Becerra, long an ally of organized labor, also wants the state’s housing built by union workers.

Here’s a thumbnail of each candidate’s major positions on a housing shortage that, no matter how it’s calculated, is an ongoing crisis point for the state’s elected leaders:

Tom Steyer

Steyer has said California can build 1 million housing units over four years, an audacious goal considering that Newsom’s administration — very active on its housing agenda — has clocked in at about 100,000 new units per year.

One of Steyer’s primary levers to achieve that is to create new state revenue that can be directed to cities and counties, which could then lower the developer and transfer fees on home building that drive construction costs upward. Steyer’s proposal is to strip commercial property owners of the tax protections of Prop. 13, which he says would generate $20 billion a year in new tax revenue. Such a move would also require a highly uncertain and contentious public ballot measure.

“I’ve said that I will, on day one, call a special election” to close the Prop. 13 tax loophole for such commercial owners, Steyer told Ezra Klein of the New York Times in a housing forum in early May. The goal, he said, was that “when we’re talking about a new housing facility in a city or county, it’s not an unfunded liability — it’s a funded mandate. We can then work with the cities and counties, and they can stop dragging their feet.”

Steyer is an ardent proponent of building more housing off-site and then bringing it to the home site to be assembled — what most of us would call prefab or modular housing, and a process that housing experts say could save 20% or more in construction costs. Steyer says on his campaign site that he wants to use the state’s buying power to build “the country’s largest industrialized construction market.”

The candidate also wants to overhaul competing or redundant state funding programs to make the system simpler for home builders and developers to use, in some cases by expanding the use of low-interest revolving loans. It’s part of a larger goal of streamlining home-building processes, including permitting.

Steyer was an early proponent of Senate Bill 79, which prioritizes new and high-density housing near public transit centers by overriding local zoning laws. He also wants to buy materials for Accessory Dwelling Units in bulk to achieve economies of scale and make ADUs more affordable to home owners. As to the state’s homeless population, Steyer prefers more money flowing to bridge housing programs and less to permanent supportive housing, which, while critical, has proved expensive and largely inefficient.

Steyer has campaigned on pushing back on corporate home buyers, although it’s not clear how he would do that or how extensive the problem is. The California Research Bureau has found that 2.8% of single family homes are owned by companies that own 10 or more properties overall.

Xavier Becerra

In the housing policy section on his campaign site and in public appearances, Becerra has said he would declare California’s housing shortage to be a state of emergency on his first day in office. He’d then direct every state agency to treat both production and affordability as “the paramount priority.” 

At the top of that list are roughly 40,000 affordable housing units that Becerra said are sitting in approved projects across the state, awaiting a final tranche of funding. In terms of how to close the funding gap for those projects, Becerra’s campaign site includes a list of possibilities that features bond measures, state subsidies and public-private partnerships.

Becerra leans strongly toward enforcement of the state’s existing housing laws to jump-start production. As governor, Becerra said he’d direct the state Department of Housing and Community Development to identify cities that are reneging on housing element commitments and initiate enforcement, including fines.

A staunch labor ally, Becerra advances few plans that would not involve union jobs and prevailing wage standards. But he did tell Klein that he supports a 2025 law that waives the wage requirement on infill projects of eight stories or less. In those cases, Becerra said, “You have the right as a developer to be able to try to get the labor that you need and try to negotiate a good price.”

Becerra said he would push to reform fees statewide to lower housing costs, noting that it’s 2.3 times more expensive to build an apartment in California than in Texas. On the buyer side, he proposes expanding the state’s down payment assistance program and broadening eligibility so that more first-time buyers qualify for the program.

The candidate is proposing to create a dedicated and targeted “homelessness prevention” funding stream within the state’s system, the goal being to direct assistance to families who are in danger of losing their homes because they’re a few hundred dollars short on rent.

And, like Steyer, Becerra has paid attention to California’s renters, who comprise nearly 45% of all households in the state. Becerra emphasizes full enforcement of the California Tenant Protection Act to stop excessive rent increases and require just cause before an eviction can proceed.

Steyer advocates for enforcement of that act, but he also wants to expand the state Renter’s Tax Credit to put more money in those families’ pockets. That is consistent with Steyer’s tendency to think in terms that are bigger, perhaps more aspirational and certainly more expensive — while Becerra, the longtime political veteran, emphasizes a plan grounded in the day-to-day workings of California government. It is to voters to decide which approach — if either — will move the needle when it comes to the state’s housing crush. 

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