Earlier this year, Governor Newsom announced that he was going to make housing his top priority, and called for 3.5 million new homes to be built in California within six years.  I believe this is a laudable top priority, and have previously written about the great need in our region for more housing. To start with, Governor Newsom wisely announced $500 million in awards to cities and counties that meet new, short-term housing goals.  I believe the enticement of these funds can propel real change, and I hope Sacramento County will win some of this money.

Unfortunately, Governor Newsom coupled this “carrot” with an extremely dangerous “stick”, in the form of withholding gas tax money from cities and counties that don’t meet the regional housing targets set by the state.  This has shaken virtually the entire state, as 97% of California cities and counties (including Sacramento County) are not hitting their housing targets.

This plan has a fundamental flaw in logic because it ties gas tax money to production goals, when counties are only accountable for planning.  We should, and do, encourage housing through the land use process, but the decision whether to build more housing comes largely from factors outside our control.  We cannot force builders to build, nor can we force financial institutions to lend the builders money.

Even when projects have been approved, lately we are seeing production slowed down because the builders cannot find enough carpenters, plumbers, electricians, etc. to do the work, in part because the state has seemingly abandoned vocational education.  Too few schools have a “shop class”, and too many children have been told that college was the only route to success, when in reality jobs working in the trades can often pay more than jobs that require a college education.

Beyond that, I believe it’s wrong to threaten our gas tax road funding, especially after voters went to the polls last November and voted to keep the gas tax.  I’m not sure the gas tax repeal would have failed, had voters known the funding could be taken away for something entirely out of their control.

Our roads cannot bear even a small reduction in funding.  As I wrote about earlier this year, even with the gas tax in place, the County needs an additional $15-20 million yearly just to maintain the roads at the current level, or an additional $50 million yearly to get them to a standard people would describe as “good”.  

If Governor Newsom is serious about wanting to build 3.5 million new homes in California, beyond incentives he needs to look at the high cost of construction.  It is extremely expensive for a builder in California to conform to the unique regulations contained within the California Environmental Quality Act, and the enormous California Building Code grows larger each year.  These regulations are part of the reason that a home in California is 2.4 times more expensive than a comparable home in Texas.

There are potential solutions to this housing crisis, but threatening counties like Sacramento for a problem out of our control ignores the root of the problem, and is ultimately doomed to fail.

Thank you for reading – and as always, if you want to contact me call me at 916-874-5491, or e-mail me at [email protected].