The last few days have brought glimpses of hope for California’s housing future. My recent interview with California YIMBY emphasized the momentum behind CEQA reform and transit-oriented housing proposals. Progress in the Legislature signals that lawmakers are increasingly serious about reducing barriers to new construction. From the outside, it might appear that California is finally learning from its mistakes and beginning to tackle the housing crisis head-on.
But there is also a different picture that emerges—one of dysfunction, delay, and disjointed effort. Encouraging as recent developments are, they remain the exception, not the rule. Or perhaps, too little or too late.
Let’s start with what appears to be good news: the new budget agreement from the California Senate and Assembly. The joint proposal includes provisions to fast-track housing construction, combat homelessness, and make homes more affordable. Leaders like Senate President Pro Tem Mike McGuire and Assembly Speaker Robert Rivas framed the budget as a direct rebuke of chaos emanating from Washington and a defense of California’s most vulnerable.
And yet, in parallel, city after city is failing to meet even basic state-mandated housing goals.
CoStar’s recent deep-dive into housing construction in Los Angeles and San Francisco is damning. It tells the story of two of the state’s flagship cities falling drastically short of their production targets, with LA reaching only 30% of its 2024 goal and San Francisco clocking in at just over 1,000 permitted units—the lowest since the Great Recession.
This is not simply a matter of local reluctance. The article lays bare the complex structural challenges: astronomical construction costs, slow and discretionary permitting processes, local political resistance, and outdated zoning rules that block needed development.
Even state laws intended to speed things up—like Senator Scott Wiener’s SB 423, which restricts CEQA lawsuits and discretionary review—often fail to work as advertised when city departments refuse to change their cultures. In Los Angeles, for example, the majority of new housing still goes through traditional approval channels, despite the availability of streamlined pathways.
Developers, even those pursuing affordable projects with private capital, are struggling to maintain momentum. The permitting process drags on for years. Momentum dies. Projects get shelved.
As Mott Smith, a longtime LA housing developer, put it: “Our approvals process is the result of early-20th-century thinking, supplemented by a political culture that favored preservation over growth.” That culture, in cities like LA and San Francisco, still holds power.
Meanwhile, there are bright spots. Sacramento and San Diego are quietly proving that reform is possible. Thanks to streamlined permitting systems and commercial-to-residential rezoning, Sacramento is producing over 3,000 units a year, and San Diego has permitted over 18,000 homes since 2023 under its Complete Communities initiative. These cities are showing what it looks like when local governments align their processes with the scale of the housing emergency.
But even these modest successes are under threat.
In a joint op-ed published in the Los Angeles Times, mayors Todd Gloria and Kevin McCarty warned that the state is on the verge of defunding the very programs that made those successes possible. The proposed budget does not include another round of funding for the Homeless Housing, Assistance and Prevention (HHAP) program. Without it, they say, “California’s homelessness problem will balloon.”
They’re not exaggerating. Since 2019, HHAP has helped place over 42,000 Californians into housing, created thousands of shelter beds, and built nearly 2,300 permanent housing units. In Sacramento, HHAP supports over 1,300 units of emergency shelter. In San Diego, it has doubled shelter capacity and created new support programs for people living in their vehicles.
Without this funding, the progress cities have made is likely to reverse. The human cost will be devastating, and the political fallout will only deepen public disillusionment with government.
What’s most frustrating is that these budget choices come at a time when the Legislature is also rightly condemning federal overreach and economic chaos caused by Trump administration policies—tariffs, deportation raids, and cuts to essential services. California leaders say they are preparing for uncertainty. But failing to invest in housing and homelessness solutions is not preparation—it’s abdication.
If anything, the worsening federal climate should push California to double down on protecting its residents, especially the most vulnerable. Instead, we see promising local models starved of support, and housing streamlining laws ignored in cities where they are needed most.
This is the paradox of California’s housing crisis: we know what works, and we have the tools. But we keep falling short—sometimes for lack of political will, sometimes due to institutional inertia, and sometimes because bold language in press releases isn’t matched by action on the ground.
So yes, it has been a somewhat encouraging week. CEQA reform is gaining traction. State leaders are showing more urgency. But the challenges we face remain massive, and our progress—uneven, underfunded, and politically fragile—is still far from what the moment demands.
The truth is, this crisis won’t be solved by one good budget cycle, a single streamlining bill, or another mayor’s bold speech. It will take a fundamental cultural shift in how we view growth, housing, and equity.
Until then, every step forward will be shadowed by the larger steps we’re not taking.
For you, “less encouraging”.
For me, “more encouraging” – especially the fact that young people aren’t even having kids at replacement levels.
The following is also “encouraging”:
“The SB 607 blockage may indicate that Newsom is losing clout with the Legislature as he nears lame duck status.”
https://calmatters.org/commentary/2025/05/california-senate-ceqa-housing-reform/
There isn’t a shortage of buildings. There is, however, continuing sprawl in the region and beyond.
https://news.ku.edu/news/article/study-finds-us-does-not-have-housing-shortage-but-shortage-of-affordable-housing
The KU article makes the mistake of thinking of housing as being separate from business activity and jobs. That’s because Kentucky has lots of housing, but not much in the way of economic opportunities. We have a housing shortage where there is dynamic economic growth, which restricts the economic opportunities for those lower on the income ladder. We need more housing in places like Davis where there are more economic opportunities. This article delves into this issue: https://www.theatlantic.com/magazine/archive/2025/03/american-geographic-social-mobility/681439/
It’s worse than that, the KU article (which Ron has never read) uses a 30,000 view looking at gross units built without analyzing things like cost and household formation.
Ron has posted the link to the press release now 14 times in comments…
The quote — “housing production exceeded the growth of households by 3.3 million units from 2000 to 2020” — refers to gross units built vs. net new households formed. But this is a false comparison unless you account for:
• Demolitions and obsolescence (homes that are torn down, become uninhabitable, or are permanently taken off the market),
• Vacancy rates and second-home ownership,
• Mismatch in location, size, and affordability (e.g., luxury units built while affordable supply shrinks).
In other words, just because more units were built than households formed doesn’t mean they’re in the right places or priced appropriately.
Ron also ignores the fact that this is one study. Others from groups like the Terner Center, Harvard’s Joint Center for Housing Studies, and Up For Growth have all found that there is a significant shortfall of affordable and available housing.
If Ron hasn’t read the full report, he shouldn’t be making sweeping claims based on a decontextualized quote. At best, it’s a partial truth. At worst, it’s a statistical distortion used to deny the real housing affordability crisis.
I keep pointing this out, but he doesn’t want to spend the $50 or whatever to read the whole thing.
If you look at the reference (and there’s actually more than one to this study), you’ll see that I’m not quoting anything that isn’t summarized. Also, you’re making two different arguments, since you first stated that the study didn’t look at household formation, but then went noted in your second comment that they did exactly that.
The study looked examined conditions across the entire country – INCLUDING the locales where the “Goldilocks” housing advocates claim that there’s not enough housing, it’s not the right type, it’s too small, too large, too expensive, or whatever other nonsense they put forth.
Also, if folks (e.g., from other countries) are buying “second homes” (and/or leaving them vacant in places like San Francisco), what does THAT tell you about a shortage of buildings, vs. a difference in wealth?
As far as “Up for Growth” is concerned, are you kidding me? Aren’t you the same guy who states that we should only consider studies that arise from universities, like the one I cited?
In any case, here’s some additional quotes from the summary. You might not agree with the authors’ conclusions, but I’m not “spinning this” in any way:
“The numbers also showed that nearly all metropolitan areas have sufficient units for owner occupancy. But nearly all have shortages of rental units affordable to the very low-income renter households.”
“While the authors looked at housing markets across the nation, they also examined vacancy rates, or the difference between total and occupied units, to determine how many homes were available. National total vacancy rates were 9% in 2000 and 11.4% by 2010, which marked the end of the housing bubble and the Great Recession. By the end of 2020, the rate was 9.7%, with nearly 14 million vacant units.”
“When looking at the number of housing units available, it becomes clear there is no overall shortage of housing units available.”
T”he study considered markets in all core-based statistical areas as defined by the Census Bureau. Metropolitan areas saw a nationwide surplus of 2.7 million more units than households in the 20-year study period, while micropolitan areas had a more modest surplus of about 300,000 units.”
“Our nation’s affordability problems result more from low incomes confronting high housing prices rather than from housing shortages,” McClure said. “This condition suggests that we cannot build our way to housing affordability. We need to address price levels and income levels to help low-income households afford the housing that already exists, rather than increasing the supply in the hope that prices will subside.”
On another note, the housing market itself is declining across the nation, at this point.
Home values have fallen month-over-month in more than 60 percent of U.S. counties in April, according to data from real estate platform Reventure App—a decline so widespread that it can only be compared to those that followed the 2008 housing market crash and the 2022 mortgage rate spike, the company’s CEO Nick Gerli said.
https://www.newsweek.com/house-values-declines-spark-alarm-something-big-could-happening-2080866
(I would think that the housing advocates would be thrilled by this, but apparently not. These are the type of folks who complain regardless of price, location, or anything else. And they’ll still be complaining 20 years from now.)
https://www.newsweek.com/house-values-declines-spark-alarm-something-big-could-happening-2080866
“For me, “more encouraging” – especially the fact that young people aren’t even having kids at replacement levels.”
The dude don’t like people having kids. Sad.
Obviously, it’s not that I don’t like people having kids. It’s that there’s no “shortage” of people.
Of course, school districts aren’t too happy when their customer base declines, and some of them are more than willing to “poach” customers from other districts.
A more-effective pandemic could also do the trick :-\
One thing I have increasingly realized is that there’s essentially two types of people in the world:
Those who complain incessantly about what society “should” be doing for those like themselves (or for others whom they identify with), and then there’s the other type – whom we generally call “successful” people.
Personally, I admire the latter more than the former. And I’ve noticed that immutable personal characteristics (such as skin color, sex, orientation, etc.) – have no impact regarding dissuading those determined to be successful.
Reminds me of the book, “Rich Dad, Poor Dad”. (Can you guess which of those two has pre-conceived conceptions regarding how the world “should” work, vs. the one who manages to make the world work for him?)
And can you guess which of those valued higher education, more than the other? (The answer might surprise you.)
But what I found most interesting regarding that book (having read it many years ago) is that I could see myself in it to some degree. That is, the author experienced hostility from those who were taught as I was, just by pointing out how the world actually works.