Governor Gavin Newsom’s decision to embed sweeping housing reforms in his budget trailer bill isn’t just a policy move—it’s a political gauntlet, thrown down not at Republicans, but at his fellow Democrats. With California’s housing crisis continuing and the failure to make any inroads, Newsom has decided that the time for consensus-building has passed. He’s shifting from persuasion to power.
This isn’t the typical legislative fight. It’s an existential reckoning for California’s Democratic Party—one that pits its progressive identity against the entrenched interests and ideological contradictions that have made the state’s housing system functionally ungovernable.
At the center of that fight is a simple truth: Democrats, not Republicans, are the biggest political barrier to housing in California.
Newsom’s budget proposal would override local zoning, streamline CEQA review, and fast-track housing construction in cities that have spent decades stonewalling development. These are not new ideas. YIMBYs, planners, renters, and younger voters have been sounding this alarm for years: housing scarcity is not a bug of California’s system—it’s a feature, produced by exclusionary zoning, bureaucratic paralysis, and elite capture of local government.
What’s new is that Newsom is using the budget process to bypass the usual roadblocks—and daring his own party to stop him.
The pushback is already coming. Labor groups fear the loss of wage standards. Environmental advocates see a slippery slope on CEQA. Local officials are incensed at the erosion of their land-use authority. These are not right-wing voices—they are core constituencies of the California Democratic coalition. And therein lies the problem.
Democrats are talking out of both sides of their mouths: calling for affordable housing while opposing the very mechanisms needed to build it.
This contradiction is on full display in places like San Francisco and Los Angeles, where progressive electeds talk a big game about justice and equity but fight tooth and nail to preserve single-family zoning, delay permits, and block new construction. The rhetoric is inclusive, but the policy outcomes are exclusionary.
As Ezra Klein has pointed out, “Homelessness is a (f-ing) problem—and it is the worst problem for the people experiencing it, not for me.”
He’s right. And yet, when Klein pressed a progressive critic about how to reduce the obscene $650,000–$1 million per-unit costs of affordable housing in California, the answer wasn’t a plan—it was a pivot.
Klein’s frustration mirrors that of many pro-housing liberals who are watching the left implode under the weight of its own contradictions.
Conor Friedersdorf put it bluntly: “Nothing frustrates me more than NIMBYs and their leftist allies on housing. It’d be easy to lower the cost of the biggest expense most Americans confront. The left’s failure to understand the problem renders them not only unable to fix it but oppositional to those with solutions.”
That opposition comes dressed in the language of virtue—equity, environment, labor—but its effect is regressive. It protects homeowners at the expense of renters. It preserves aesthetics over access. It subsidizes scarcity while pretending to fight for abundance.
Meanwhile, the reality on the ground is dire. California now has nearly one-third of the nation’s homeless population. Home prices and rents have soared far beyond the reach of most working families. The state’s population is declining as people flee to states like Texas and Arizona, not because those states are better governed, but because they build.
And that’s the uncomfortable part for many Democrats.
When it comes to housing, the states that build fastest and cheapest are not the progressive strongholds—they’re red states. In Texas and Florida, homelessness has grown modestly despite minimal social spending. In California, despite spending $24 billion since 2019, homelessness rose 24 percent. Why? Because we’ve made building housing virtually impossible.
San Francisco tried to build a single public toilet for $1.7 million. Affordable housing projects regularly cost more than luxury condos. Regulations, mandates, and lawsuits stretch timelines into decades and costs into the stratosphere. And every attempt to streamline this mess is met with outrage from some corner of the Democratic coalition.
Even Ezra Klein and Derek Thompson—liberal journalists by any standard—have described California’s governance as a cautionary tale.
In Abundance, they write, “California has the worst homelessness problem in the country. It has the worst housing affordability problem in the country. It trails only Hawaii and Massachusetts in its cost of living. As a result, it is losing hundreds of thousands of people every year to Texas and Arizona.” That’s not a Republican ad. That’s a liberal diagnosis.
And yet, many Democrats can’t seem to accept that building more housing—at scale, and with urgency—is the only path forward. Instead, they pour money into subsidies, tax credits, and vouchers that can’t keep up with demand. As Klein and Thompson argue, this is like “building a ladder to try to reach an elevator that is racing ever upward.” Unless we tackle supply-side constraints—permitting, zoning, CEQA, local veto points—we are only subsidizing our own failure.
Newsom appears to understand this. His move to embed housing reform in the budget is an admission that the ordinary political process has failed. Too many good bills die in committee. Too many local governments flaunt the law. Too many compromises produce toothless half-measures.
Yes, there are risks to Newsom’s approach. Using budget trailer bills for major policy raises real concerns about transparency and democratic process. It circumvents public input and legislative negotiation. It may provoke legal challenges or backlash. But what’s the alternative? Another decade of stagnation, displacement, and dysfunction?
California needs to build—deeply affordable housing, workforce housing, and yes, market-rate housing. We need to build near transit, in affluent suburbs, and in cities where opportunity has been gated off by design. We need to build faster, cheaper, and with fewer arbitrary obstacles. That will require confronting not just Republican obstruction, but Democratic cowardice.
The question is whether the party can reconcile its competing impulses—pro-labor, pro-environment, pro-housing—or whether it will continue to treat every policy as a zero-sum game. If labor standards block housing, if CEQA protects parking lots, if neighborhood character trumps human need, then the party is not progressive—it’s performative.
Newsom’s gambit is not just a policy play—it’s a political challenge to the soul of his party. Can Democrats govern through complexity? Can they hold their values while confronting trade-offs? Can they say yes to something other than another process?
If the answer is no, then they shouldn’t be surprised when voters stop believing in California as a model—or in the Democratic Party as an engine for solutions. The housing crisis is not just a crisis of supply. It’s a crisis of political will. And Democrats must finally decide: are they the party of housing or the party of the homeowners blocking it?
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