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astronomical construction costs, slow and discretionary permitting processes, local political resistance, and outdated zoning rules that block needed development.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.
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Breaking News Housing Housing Opinion San Francisco State of California
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California California Senate and Assembly CoStar Homelessness Housing Crisis Kevin McCarty Mike McGuire Mott Smith Robert Rivas Sacramento and San Diego Senator Scott Wiener Todd Gloria