California's 'Aggressive' Housing Supply Law Reform

California Governor Gavin Newsom's 2019-2020 budget proposes that local governments not meeting new housing product targets will not receive transportation funding.

The reform would include overhauling the Golden State's methodology for revising up regional housing quotas, to be higher than they've been in past years. Housing funding in the budget allocates $250 million in grants for to help local governments speed up the process of revising zoning codes and environmental permitting processes. As well, $500 million will be given out in awards for cities and counties hitting short-term housing milestones, CityLab reports. “Going forward, the state will strongly encourage jurisdictions to contribute to their fair share of the state’s housing supply by linking housing production to certain transportation funds and other applicable sources, if any," said Newsom at a news conference following the budget's release.

Newsom’s bid to withhold state tax dollars from cities and counties that fall short of housing requirements would also be a significant departure from the status quo. In 2017, Liam Dillon of the Los Angeles Times investigated how, for decades, California has failed to hold local governments accountable to the housing plans that state law requires them to report. As lawmakers in Sacramento have packed on additional demands to the planning process, they have not addressed a basic statutory flaw, Dillon found: the lack of a mechanism ensuring that those heavily-deliberated plans actually result in real housing units. The result has been years of stunted production in most California cities, the root of a historic affordable housing crisis and the highest poverty rate in the nation.

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