Governor Newsom’s Affordable Housing Trojan Horse

The decline of the middle class in California is not irreversible, but if Governor Newsom’s plan succeeds and citizens do not stand together to stop the overzealous state, then California’s grim, tragic fate as a failed dystopia is all but guaranteed.

r-4California Governor Gavin Newsom speaking shortly after his 2018 election. Photo: Mike Blake/Reuters 

California’s housing shortage is so critical that it is now seeing its residents—largely conservative, middle class citizens who once served as the core of California’s collapsing Republican electorate—leaving in droves for more affordable, business friendly states like Texas and Nevada. To reverse this exodus, Governor Newsom hopes to “encourage” the construction of 3.5 million new, affordable homes, a proposal that sounds reasonable enough until one examines how, where, and why he intends to enforce construction.

526 California cities “failed” to meet the state’s housing requirements in 2018, compared to 13 that made “sufficient progress.” Newsom hopes to allocate $1.75 billion to subsidize the construction of new housing, which works out to a paltry $500 per unit. The bulk of his plan relies on holding billions of dollars of state infrastructure funds hostage—including those from infamous SB-1, more colloquially known as the “gas tax”—from cities that cannot meet their goals, regardless of the reason.

Governor Newsom has already launched lawsuits against 47 cities—including Huntington Beach in Southern California, Plumas County in Northern California, and Clovis in the Central Valley. According to Clovis’ Assemblyman Jim Patterson (R), the town has “low crime, great schools, and lots of reasonably priced units,” so why is this otherwise model city being targeted?

Clovis-1024x768Downtown Clovis. Photo: Fresno Council of Governments

As per usual, the answer is politics. Clovis, Huntington Beach, and Pluma County are all stubbornly Republican strongholds that voted for 2018 Republican gubernatorial candidate John Cox by an average of 55.8%. Conversely, Marin County, like Encinitas and Huntington Beach, is wealthy, coastal, predominantly white, and has failed to meet its housing requirements, but was able to receive an exemption from the state. Once again, partisanship seemingly influenced the state’s favorable decision, as now-governor Newsom garnered over 80% of Marin County’s votes; it, like other exempted communities, serves as a major national fundraising center for the Democratic party. Why, then, are these policies which are supposedly “pro-middle class” and “pro-business” not being applied uniformly?

This author is pro-business and pro-development, but Governor Newsom’s housing plan is neither. By mandating the construction of new low-income affordable housing, Governor Newsom removes all incentive to build homes for the middle class. I don’t want to live in a California just for the very rich and the very poor, where people like Governor Newsom make rules that will never affect them and places like Marin County don’t have to follow them. This is not a debate about party, or welfare, or the rich—this is a question of whether or not we still want a path to the American Dream.

housing_017.jpgGovernment tenements in China. Photo: Reuters

What this means is that it is up to the Republicans to provide a credible alternative to easing what is a daily crisis for millions of Californians by offering a real path to that “dream.” A recent survey suggests that 53% of Californians want to leave the state, a figure that jumps up to 63% among millenials, the state’s future tax base, which begs the question: how do we get them to stay? The answer lies not through government coercion but the free market.

California’s lack of affordable housing is the obvious outcome of endless bureaucracy and regulations that make it more expensive to build here than anywhere else in the continental United States. Local fees and regulations add between 6 to 18 percent to construction costs and the lengthy approval process takes years—in San Francisco, it takes between four and eight years to complete a multi-unit project, compared to the national average of one and a half years. It’s a shame that the very same Democrats who use the promise of affordable housing to get elected are responsible for creating a market in which the only kind of construction that investors can afford to build are luxury developments. Between 2003 and 2010, new housing construction in San Diego only met 18% of middle income and 23% of low income needs compared to 152% for the affluent, and though 10% more homes were on sale there during 2018 than in 2017, the number of affordable homes on the market fell 16%.

With Governor Newsom’s promises to use state funds to construct “affordable” housing, it’s shockingly easy to imagine a two-class state in which elites isolate themselves in outrageous opulence while the seething masses rot in hulking government tenements, and the middle class ceases to exist.

To save California’s middle class, we must reduce regulations and fees to make construction of single family homes feasible again. Families with stable jobs are the core of society, and our housing priorities ought to reflect this reality. Yes, major cities must increase in density to grant our young and willing the opportunity to succeed, but we also must have somewhere to raise our families, sleep in safety, and enjoy the opportunity to live out the American Dream. The decline of the middle class in California is not irreversible, but if Governor Newsom’s plan succeeds and citizens do not stand together to stop the overzealous state, then California’s grim, tragic fate as a failed dystopia is all but guaranteed.

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