- That failure reflects the deeper truth about California’s housing crisis: despite talk of streamlining and ‘density bonuses,’ the state’s housing system is still paralyzed by underfunded planning departments, risk-averse city councils, soaring construction costs, and a political culture that mistakes delay for prudence.
Governor Gavin Newsom’s signing of SB 79, the latest in a string of housing reforms, has been hailed as a landmark victory for YIMBY advocates. The bill sets mandatory density minimums near transit stops and trims away some of the red tape cities use to stall development.
Supporters may call it bold, but the truth is far more sobering: SB 79 represents movement, not transformation—a modest measure of progress in a state that continues to fall catastrophically short of its own housing promises.
California is building far too little, far too slowly, and far too expensively—and nowhere illustrates that better than Sacramento, a city that, despite years of housing talk, embodies the structural paralysis at the heart of the state’s crisis.
According to the Sacramento Bee, the city issued just 2,387 of the nearly 5,700 housing permits needed last year to stay on track toward its 2029 goal of 45,580 new homes—proof that Sacramento, like much of California, is far behind on its housing targets and that SB 79 won’t change that math.
That failure reflects the deeper truth about California’s housing crisis: despite talk of streamlining and “density bonuses,” the state’s housing system is still paralyzed by underfunded planning departments, risk-averse city councils, soaring construction costs, and a political culture that mistakes delay for prudence—SB 79 may adjust the settings, but it doesn’t fix the machine.
On paper, the bill looks sweeping—forcing cities to allow buildings of five to seven stories and at least 100 units per acre within a half-mile of major transit stops while prohibiting local restrictions that would “physically preclude” such projects—but in practice, it’s another attempt to steer cities toward transit-oriented density by stripping away the veto power long wielded by NIMBY homeowners and city councils.
That’s long overdue, but whether it actually results in new housing remains to be seen.
Governor Newsom, in his signing statement, said the cost of inaction “is simply too high.” That is true—but action without follow-through can be just as hollow.
Although the governor has made housing production a central priority and pledged to hold localities accountable, state data show persistent stagnation, with sluggish permitting, stalled projects, and worsening affordability despite more than forty housing bills passed in recent years.
Newsom has set a goal of building 2.5 million homes in California by 2030, and, while his administration has passed numerous laws aimed at streamlining permits and legalizing density, the state’s pace of housing production offers little reason for confidence.
According to a senior YIMBY official, “The easiest thing the California legislature can do is to legalize more housing and streamline the process and that’s what we’ve done this session.”
But he also acknowledges the headwinds—from tariffs to high interest rates—that may yet keep the goal out of reach.
He added, “The governor took some pretty bold steps this year to get us close.”
Until the housing gets approved and built, I’m not sure I share that optimism even if I believe that the state took a step in the right direction.
What’s missing from SB 79, as from much of Sacramento’s housing policy, is any real mechanism to ensure that new housing is built, not just allowed.
Zoning reform clears the path, but developers still must want to build—and right now, they largely don’t.
High interest rates, skyrocketing labor costs, and uncertain market returns have cooled construction even in places that welcome it.
Sacramento’s experience proves the point. Even where the city has rezoned for higher density, projects stall for lack of financing.
The Bee’s story about a proposed six-story, 33-unit affordable housing complex on T Street captures the absurd scale of the gap: one modest project, celebrated as progress, in a city that needs tens of thousands of homes.
The project targets the “missing middle”—those who earn too much to qualify for subsidized housing but too little to afford market rents.
Yet even this small step required years of planning and multiple layers of approval.
This isn’t just a matter of local resistance—it’s the predictable outcome of a housing system built around private profit rather than public need.
Every few years, Sacramento passes another “streamlining” bill hailed as the breakthrough that will finally unlock supply, yet production lags, the governor signs, YIMBYs cheer, cities issue press releases—and little actually changes.
There is a certain political convenience in celebrating movement as progress.
For legislators, it signals action without demanding confrontation with the deeper truth: California’s housing crisis is not caused by a lack of legal authority to build. It is caused by a lack of political will to fund what the market won’t.
Even if SB 79 succeeds in opening more parcels near transit for development, that housing will not be built for the people who need it most.
Market-rate apartments near rail stops will fill quickly—with those who can afford $3,000 rents. The working poor and the lower middle class will remain priced out. As long as affordability is treated as a side benefit rather than a central goal, the “housing crisis” will simply become a crisis of a different kind.
Senator Scott Wiener, the bill’s author, has long argued that California must “say no to NIMBYs and to city councils that are yelling at them.”
He’s right that local obstruction has been a major barrier.
But there’s another form of obstruction just as powerful: the state’s unwillingness to invest directly in housing production. SB 79’s framework presumes private developers will fill the gap once restrictions ease. That faith in market equilibrium is belied by every recent trend line.
Sacramento’s stagnation is not an exception—it is the rule.
Across California, from San Jose to San Diego, cities are falling behind on their Regional Housing Needs Allocations (RHNA). The system demands results but offers few resources. And when the state cracks down—threatening lawsuits or funding cuts—local governments respond by passing plans, not by producing homes.
In this sense, SB 79 might even deepen the illusion of progress.
It will allow state leaders to claim victory for “cutting red tape” while construction numbers remain flat. The gap between rhetoric and reality could grow wider. Californians will hear that the state has acted boldly, that housing near transit is now guaranteed—and then see little change on the ground.
There is, of course, symbolic value in the law’s passage. It establishes a new baseline that future reforms can build upon. It acknowledges that housing scarcity is a statewide concern, not a matter of local discretion. And it signals that the state is at least willing to confront entrenched political taboos around density and zoning.
But symbolism does not shelter families.
Sacramento’s empty lots and slow-moving projects illustrate the limits of legislative ambition divorced from material capacity. What California needs is not just permission to build, but commitment to build: direct public funding, stronger inclusionary requirements, regional housing authorities with real power, and a shift from the idea of housing as investment to housing as infrastructure.
SB 79 represents progress, yes—but progress of the most modest kind.
It is an incremental victory in a system that requires structural change. Until Sacramento’s skyline—and those of every California city—begin to rise with truly affordable housing, “progress” will remain a hollow word.
From article: “According to the Sacramento Bee, the city issued just 2,387 of the nearly 5,700 housing permits needed last year to stay on track toward its 2029 goal of 45,580 new homes—proof that Sacramento, like much of California, is far behind on its housing targets and that SB 79 won’t change that math.”
And yet, Sacramento is continuing to pursue sprawl in the remainder of the Natomas basin. I’m not sure if the development below is the same one I recently observed, near the airport (or if that’s a separate one).
https://www.sacbee.com/opinion/article309024670.html
One might ask where these new residents are coming from (and why houses are being built in a floodzone (after forcing taxpayers to fund levees), given that Sacramento is already one of the most spread-out cities in the state (and has neighborhoods in desperate need of redevelopment). It’s basically a hell-hole in places like the already-developed Arden Arcade area.
1.6 kids per woman (nationwide) these days. Where are these people coming from, and is it more beneficial to the environment to discourage them from moving in the first place?
Of course, since the governor eliminated CEQA for developments within cities, perhaps that question won’t be answered.
Same is true in Grass Valley – building new sprawl in a high-risk fire zone.
You wanna guess “who” pays for that (in regard to increased insurance, utility costs, taxes, etc.)? (Here’s a hint – it’s not exclusively the new residents.)
Both of these type of developments are a direct result of the state’s mandates (or at least provide political “cover” for pursuing them).
https://www.sfchronicle.com/projects/2025/california-wildfires-housing/
People are moving to Sacramento because their are more job opportunities here. This is why people in the middle of the US resent those on the coast–the former don’t have the job opportunities afforded to the latter. People move to jobs; jobs don’t move to people. So we aren’t going to discourage them from moving here because they want work that pays them a better wage.
On top of that, living in California is less environmentally impactful than living in Alabama, just as living in Davis is generally less environmentally impactful than living in Elk Grove. Davis is more likely to have more compact developments and if we can build denser housing that is more affordable, more of our residents will also work here, which will be even less environmentally impactful.
Redevelopment is costly. For example putting in an electric line extension in a new development costs about $3000 per house while replacing one for an existing house costs about $20,000. Other infrastructure costs have similar multipliers. Plus assembling parcels for a larger development increases the cost per parcel by 40% over buying individually.
I agree that the sprawl in Natomas is problematic, which is why we need more compact development in Davis as an alternative. The same is true of the exurbs in the wildfire-urban interface at fire risk. We need to make these developments bear the full costs of the risks they impose.
“People are moving to Sacramento because their are more job opportunities here.”
Is that right? You haven’t heard about the exodus of companies to places like Nashville and Austin?
“This is why people in the middle of the US resent those on the coast–the former don’t have the job opportunities afforded to the latter.”
“Envy” – always a good reason for a community to choose sprawl.
“People move to jobs; jobs don’t move to people.”
You are wrong about that, sir. Both of them move. Sometimes, jobs move more easily than residents (and have more incentive to do so).
Sometimes, jobs move to places like China without even taking their workers with them.
“So we aren’t going to discourage them from moving here because they want work that pays them a better wage.”
When wages don’t keep up with costs (not just those related to housing), that’s when residents AND jobs move elsewhere.
Don’t build it, and they won’t come. It really is that simple – starting with jobs, themselves.
But again, this is just reshuffling the chairs on the Titanic, when the population itself isn’t growing.
“I agree that the sprawl in Natomas is problematic, which is why we need more compact development in Davis as an alternative.”
Davis is not an “alternative” to Natomas – two different worlds.
Where do you suppose most of the new residents in Natomas work in the first place? My guess is Sacramento.
“The same is true of the exurbs in the wildfire-urban interface at fire risk. We need to make these developments bear the full costs of the risks they impose.”
I agree – good luck with that.
For sure, Davis is not “the” place for young people to start out, unless they have a direct connection to UCD. And based upon growth patterns across the U.S., it seems that young people have figured that out.
There was a time (not so long ago) when Davis and the region was a relatively “good deal” compared to the Bay Area. Maybe it still is, for those who want to retire in the area, etc.
Then again, you really have to spend at least $400K (or more) for a decent house, in a decent neighborhood almost anywhere in the U.S. (This is not due to a “housing shortage”, however. And prices are declining – probably because the economy itself is declining.)
“Don’t build it, and they won’t come.
Delusional
Yeah doesn’t work like that and it causes more problems
It actually works exactly like that, due to the laws of physics (and alternatives).
But one really has to look at the drivers of demand, in a given locale.
Of course, that (primarily) means job creation. But even when more jobs are created than what a community actually needs, housing prices are eventually a factor in businesses and residents seeking opportunities elsewhere. (Or more commonly, not moving to a given locale in the first place.) Basically, a self-correcting system.
But it is true that you and I aren’t going to be able to move to Atherton, under this system, nor are we going to be able to afford a vacation home in Jackson Hole. Or in other words, “Waah – it isn’t fair!”
;-)
Agreed with Ron G. about Ron O’s delusions. The Davis housing premium shows this is untrue.
Not sure what your point is, Richard. Yes, the housing market “values” Davis housing prices “higher” than in some of the surrounding communities. Are we in disagreement regarding that housing prices are different in different cities?
The “Davis housing premium” is the reason that people who are moving to the area seek out housing in places like Spring Lake. (Though I’m not sure why anyone is moving to the area in the first place, when employers like UCD aren’t increasing the number of employees.)
The “premium” that you refer to can also be seen in regard to housing prices WITHIN a given city.
Housing in San Francisco’s Sunset and Richmond neighborhoods are less-expensive than they are in more desirable neighborhoods.
Housing in Daly City is probably cheaper than the Sunset and Richmond neighborhoods.
Though once you travel further down the peninsula (not much further), housing prices are more-expensive than they are in the city (due to Silicon Valley).
In Davis, housing that’s very close to UCD is more-expensive than it is in the outer reaches of Mace Ranch.
This difference in price has ALWAYS existed, in every locale in which the free market operates.
It’s also the reason that vacation homes in Jackson Hole cost more than they do elsewhere. (In that case, it has nothing to do with jobs.)
And again, it’s the reason that David and I won’t be moving to Atherton in this lifetime, even if we can afford “oh-so-expensive” Davis. So again, I’ll say “waaah”!
“Not sure what your point is, Richard. ”
Shouldn’t you try to find that out first before adding a book?
You’re relying on anecdotes that the Chamber of Commerce wants to use to pressure legislators. The fact is that California’s economy continues to grow and is now the fourth largest in the world.
Jobs do not move more easily that people. Many empirical studies show that people move to jobs. It’s why communities compete for businesses. Businesses don’t randomly move to where people live. They move to either reduce business expenses or to access a labor pool with the talents specific to the business. That’s why Pittsburgh, Detroit, Seattle and Silicon Valley rose, and why Iowa is unlikely to become a technology center in our lifetime. This process is called agglomeration and its very well documented. Look for the work by Richard Florida to find out more. Just moving people to some other random location will not attract businesses if the people moving there do not have the specific expertise needed by those businesses. That’s why people are fleeing rural areas in much of the country.
Doesn’t matter that the population might stop growing decades from now. The fact is that the price premium here shows there is excess demand for housing in this region, and Davis specifically. The market refutes your premise. We don’t have socialist centralized planning economy that tells people where they must live. Especially when you are insisting that planners protect your selfish interests.
Why isn’t Davis an alternative to Natomas if we build houses here that are of comparable price to those there? Your flat statement contains no rationale and a premise that assumes that housing prices are immutable.
We have 17,000 people commuting into Davis, many who desire to work here. The commute from Sacramento into Davis is now rivaling the eastward commute in magnitude. Your view is obsolete.
Housing prices are declining for a simple economic reason–interest rates are more than double what they were 3 years ago. Sellers are realizing they need to rein in their expectations. No surprise there.
You have this backwards. Businesses come first, THEN new residents. Or more accurately, they grow “together”.
And when businesses decline, the people leave and housing prices decline.
This is true in every example you provided.
And when businesses are extraordinarily successful (such as Silicon Valley), the people able to land those jobs eventually push out the long-term residents who arrived before the rise of those businesses. And if they’re homeowners, they (or their heirs) receive a modest windfall when they sell. (Modest by Silicon Valley standards, at least.) And the community itself is never the same after that. (Some might argue that it’s “better” – certainly wealthier.)
“You have this backwards. Businesses come first, THEN new residents. Or more accurately, they grow “together”. ”
Citation?
All of the examples that Richard provided. Detroit is a good example of business collapse, followed by population collapse (and housing price collapse).
Do you disagree that job creation (or reduction) is the primary driver of housing demand (outside of places like Jackson Hole)?
The California Exodus is partly driven by businesses relocating to places like Austin, Nashville, Charlotte, Reno, . . .
And they take their employees with them, at times.
Some of this is due to housing prices, but there’s also taxes and other costs that are higher in California than anywhere else. Both for individuals AND businesses.
Nevada has no state income tax, for example. And since housing prices are lower, their property taxes and insurance are generally lower as well.
There’s also the ability to telecommute these days, though I understand that it’s generally less-flexible than it was during the pandemic.
Why isn’t Davis an alternative to Natomas if we build houses here that are of comparable price to those there?”
Are you kidding? Good luck with that. You yourself have claimed that Davis has more “requirements” (in a good way), than a place like Natomas.
Davis can’t even compete with its NEARBY neighbor (Woodland), in regard to housing prices. I believe that Woodland is slightly more expensive than Natomas (despite being farther away from downtown Sacramento – a major employer).
Housing prices are not the same in different cities, nor are they the same WITHIN a given city.
I do have a suggestion, however: Stop trying to make housing prices the same everywhere, when there’s not even a single example of that working. (It’s certainly a good way to destroy a lot of cities and rural land, however.)
I always find it odd that the folks on here in favor of sprawl are supposedly speaking “on behalf of” others whom they don’t know, never even met, don’t live in the city, etc.
Not once do we hear from some shmuck trying to buy a house in Davis, and complaining about housing prices.
“Housing prices are not the same in different cities, nor are they the same WITHIN a given city.”
Learn something new every day.
Apparently.
Forgot to add: Not only do these shmucks not live in the city; they also don’t work in the city of Davis.
Those are the people that you and Richard are concerned about? You think that they’re just sleeping under an overpass, waiting for housing prices to become cheap enough in Davis?
I’d still like to know if the city is housing any illegal immigrants within its existing Affordable housing stock. I have reason to believe that it’s likely occurring. And given that subsidized housing is ALWAYS in limited supply, what do you suppose that most Americans would think of that? Especially any Americans seeking Affordable housing in Davis?
Now, I realize that there probably is a significant portion of Davis loonies who think this is just dandy.
“Forgot to add: Not only do these shmucks not live in the city; they also don’t work in the city of Davis.”
Oh, the irony.
Speaking generally; not referring to a relative handful of shmucks trying to live off of $20/hour (in regard to the same type of jobs they can get in the towns where they actually DO live).
Nor am I referring to the “over-supply” of DJUSD employees – who wouldn’t even be needed if that system was right-sized. Most of whom live in a two-earner household, regardless of where they live.
But again, we never hear from the actual schmucks on this blog. We do hear plenty from their “representatives”. (Some of whom could probably pay their own employees more.)
By the way, is it “schmuck”, or shmuck? (I think I left out a “c”.)
By the way, “schmucks” and “flunky jobs” are terms of endearment, to me. I’m usually in that category, myself (which is why I was priced out of the Bay Area). I too, was a schmuck working at a flunky job. (Then again, I didn’t ask my original home town to ruin itself for “my” sake. Instead, I moved on (though I may ultimately return to that area).
Individual circumstances change over a lifetime. And I personally have a lot of patience.
But the reason I use those terms here is because I don’t believe that’s why some people are so supportive of growth/development. In other words, they’re not necessarily concerned about “those” people.
But I actually think you missed the primary (troubling) point regarding my comment, so I’ll repeat it:
“Both of these type of developments are a direct result of the state’s mandates (or at least provide political “cover” for pursuing them).”
(Needless to say, some are referencing the state’s mandates to support the sprawling Village Farms and Shirner’s, as well. And yet, no one seems to be questioning the state regarding any of these type of developments, in regard to the state’s “mandates”. Seems like someone should be questioning state officials, to see if sprawl is what they “intended” – in addition to the sprawl that was ALREADY ALLOWED prior to the state’s mandates.)
Village Farms is infill not sprawl.
“That failure reflects the deeper truth about California’s housing crisis: despite talk of streamlining and “density bonuses,” the state’s housing system is still paralyzed by underfunded planning departments, risk-averse city councils, soaring construction costs, and a political culture that mistakes delay for prudence—SB 79 may adjust the settings, but it doesn’t fix the machine.”
Aside from soaring construction costs you omit the real problem in Davis, Measure J.
Except it wasn’t a Davis piece
Think globally act locally.