Recently, California Governor Gavin Newsom has demonstrated dedication to solving the state’s housing crisis. As policy shifts to welcome construction, questions remain: Can California build enough homes — and even if they do, will simply increasing supply solve the deeper issues at play?
According to the Public Policy Institute of California, a housing crisis has plagued the state over the past thirty years — for a variety of reasons. Despite decreased housing availability, home prices have remained on a steady rise. Even when accounting for inflation, this has established houses as excellent investments — but that also means the wall between being unhoused and housed has only solidified. As a result, the current homeless population is about 187,000, with numbers still climbing.
Causes of homelessness in California
There is no single reason for homelessness in California. Housing prices are astronomical, with a median sale price of $865,100, but the minimum wage of $16.50/hour has not adequately accounted for this. California also does not have enough feasible living spaces to help the entire homeless community.
Furthermore, personal factors drive homelessness — including unaddressed mental health difficulties, healthcare barriers, addiction, and even family disputes. Circumstances surrounding identity may also play a role. For instance, the homeless population disproportionately is made up of Black and brown people, LGBTQ+ people, single adults and differently-abled individuals.
Many of these problems require steady, long-term progress. But what about right now?
Housing policy today
In June, Governor Newsom signed a piece of legislation that he called “a game changer, which will be felt for generations to come” — striking down a rule from the California Environmental Quality Act (CEQA) that limited urban development projects.
CEQA, established by then-governor Ronald Reagan in 1970, imposed a variety of environmental regulations when carrying out development projects. New housing needed to consider air pollution, noise and other conservation-related issues. If a CEQA member believed a project did not comply, they could challenge its continuation.
Critics like Senator Scott Wiener and the Bay Area Council argue that CEQA created unnecessary stalls to development, and Governor Newsom claims that the act harms the state’s ability to tackle the housing crisis. This choice is one of many that the Governor has made to support housing development.
However, housing development cannot immediately fund itself. If the state government intends to support and possibly lead housing projects, citizens need to bear the weight through taxes — which Californians might not accept.
Despite a Democratic supermajority in California’s legislature, voters have grown increasingly conservative with local and statewide legislation, including with laws surrounding taxation and minimum wage. In 2024, 50.7% of voters decided against Proposition 32 — which called for a raise in the minimum wage. 55% of voters rejected Proposition 5, which would have lowered the voting threshold requirement for local housing projects.
With recent political results and controversy, widespread government-led development became difficult. Can politicians push through that resistance?
Impacts of development
Vacant units and buildings may hypothetically house about 100,000 people — which is well under the unhoused population — but California is not the first state to try to solve this issue.
In New York, the New York City Housing Authority (NYCHA) is dedicated to supporting the construction of units and connecting them with at-the-time unhoused people. The Permanent Affordability Commitment Together (PACT) Act also specifically funds eligible development projects, and locations of finished homes are publicly available on NYC.gov.
Even so, New York state’s situation also proves that housing development projects are not always enough. Despite increased government funding, more than 350,000 people in NYC were unhoused in May, and New York state’s homeless population continues to account for about one-fifth of the nation’s homeless population.
With development in California, more homes will become available, but the number of homeless people in the state continues to rise — a problem that construction may not solve in the long-run.
The unfortunate truth
Californians continue to rate housing policy and homelessness as one of the most important factors in their political positions. Yet, even with Governor Newsom’s prioritization of the housing crisis — which Business, Consumer Services, and Housing Agency Secretary Tomiquia Moss considers “his legacy” — most affordable housing appears unsustainable.
As prices of homes skyrocket and the minimum wage remains stagnant, Californians can only hope that construction slows the increase in homelessness over the next generation — just enough to tackle it.
