Used car lots don't go to school: Notes from California Governor’s Forum

Note: I am not endorsing or denouncing any candidates here.

Last Friday in Oakland, Ezra Klein moderated a ninety-minute forum with the five leading Democratic candidates for California governor.

The topic was housing.

Tom Steyer. Xavier Becerra. Katie Porter. Matt Mahan. Antonio Villaraigosa.

I do not claim to know how to fix housing affordability in California. So I went in looking for a candidate who did. And what I heard surprised me.

I went in expecting five competing visions. Five theories of the case, each one fighting for primacy.

But, what I heard was different parts of a more cohesive story.

Between the five of them, you can actually assemble a coherent housing platform. Most of the pieces are there.

They were just scattered across five people. None of whom claimed the whole thing.

Here is what I heard.

Tom Steyer saw the trap.

Most of the night, candidates talked about cities the way you talk about a kid who won't do their homework. NIMBY.

But, Steyer disagreed.

"There is an element of that, of course. But there's also the element that they [cities] can't afford to do this. Every housing development is an unfunded mandate [for cities]."

He even said some cities prefer used car lots over new housing development, since used car lots don’t need much resources.

"Used car lots don't go to school. Used car lots don't take health care costs."

He was naming the structural trap underneath the moral framing. Cities don't fight housing because they're bad. They fight it because Proposition 13 broke the fiscal math, and every new family is a bill they can't pay. It’s about additional services to provide.

This cuts against ten years of YIMBY moral framing in California. We have spent a decade calling cities NIMBY when many of them were broke.

His proposed fix is a $20 billion ballot measure to close a corporate real estate tax loophole and route the money to cities.

He also proposed something the others didn't. Emergency interim housing with privacy, a room with a key, pets allowed, no sobriety requirement. He says 70% of unsheltered people would accept it. The state's current option (shelters) most refuse.

This is the foundation. If the fiscal math doesn't pencil for cities, nothing else works.

Matt Mahan ran the playbook. And, did it clearly.

He came in with the numbers.

"We cut the fees by over two-thirds, and 2,000 homes got under construction last year. Another 2,000 are securing financing as we speak."

He talked about the cottage industry of nexus-study consultants. About by-right approvals in downtown San Jose. About a 560-unit project that moved through ministerial review with no planning commission, no city council.

His state-level proposals were the most operationally specific I heard all night.

Cap local fees, and require a feasibility study before any city exceeds the cap. Revive tax-increment financing — redevelopment districts, the tool Jerry Brown killed — with guardrails….

And then he said something that mayors don't often say.

"Frankly, if I could go back, I would have encouraged us to buy the older housing stock that's $300,000 a unit rather than build new at $1 million a unit, when the private marketplace could have built it if we had just incentivized them at $600,000 a unit."

He optimized for the wrong thing. He was comfortable saying it. And, I appreciated his transparency. That’s how you’d build trust.

He also had a deep prevention story. A partnership with Destination Home and Santa Clara County. Notre Dame studied it. 92% of households who received one-time rental assistance plus case management remained housed years later. Inflow to homelessness dropped 50%. To me that’s a compelling story.

This is what an operational toolkit looks like.

Katie Porter named the variable.

Ezra Klein asked about a RAND study on why housing costs more in California. Porter cut in.

"I have read the study. We got asked about it before, and nobody had read it. And it doesn't seem like they have since."

Then she named it.

"The study is very, very clear that the speed is the driver."

Twenty-two months faster. That's what Colorado does. Same worker standards, same environmental review. Twenty-two months faster, and the price drops ten to twenty percent.

Her proposed fix: one uniform statewide permit. A thirty-day cap on fee determinations.. Architectural innovation for small multifamily. i.e. four-unit projects shouldn't face the same standards as four-hundred-unit ones.

On prevention, she said it again.

"The very most effective way to keep someone in their home or in their apartment is to give them direct cash assistance, period."

Period. The median cost is $6,000 per family. Compared with $800,000 to $1.2 million per supportive housing unit.

She wants to replace five or six overlapping needs programs with one consolidated cash transfer. She's calling it CalNeed.

This is disciplined optimization. Pick the variable that matters. Commit to it.

Xavier Becerra argued for prevention.

His prevention frame was strong.

"It will cost us far less to invest in someone's maintaining their housing than trying to pull them off the street."

He proposed a stabilizing fund for households on the edge — medical emergency, lost job, car broke down. The carrot-stick architecture of state-city enforcement is well-developed in his plan.

When Ezra Klein pushed him on what brings construction costs down, he pivoted to Trump's tariffs. That part didn't land.

But the prevention safety net is real and meaningful.

Antonio Villaraigosa demanded follow-through.

He kept reminding everyone he'd already done it in LA.

"I built more market-rate, work-force-affordable and homeless housing in eight years in the middle of a recession than they did in the 12 years before me."

He proposed tax reform to fix the commercial-residential Prop 13 imbalance Steyer named. Commercial used to pay 60% of property tax; now it pays 40%. He wants to fix that.

He proposed combining NEPA and CEQA for transit projects.

And he proposed something that others did not. A housing production accountability board inside HCD. One that measures actual production, not just housing element approval.

"We passed the laws, but now we need the leadership to actually implement them."

That is the missing institution.

Now put the pieces together. And, yes, I understand we can not have all together.

A $20 billion fiscal repair for cities. Fee caps with feasibility tests. By-right approvals when cities miss deadlines. A uniform statewide permit with a 30-day fee deadline. Tax-increment financing with guardrails. Comprehensive Prop 13 reform via Think Long. Cash prevention at $6,000 per family. A stabilizing fund for households on the edge. Emergency interim housing with privacy and pets. A housing production accountability board inside HCD. Older housing stock acquisition.

That is a combined platform.

It isn't anyone's platform.

That is the thing that has been bothering lately.

California has passed dozens of pro-housing laws under Gavin Newsom. We have rewritten CEQA. We have created builder's remedy. We have rezoned around transit. We have funded affordable housing at scale.

And still, the build numbers are roughly where they were when he took office.

The problem is not that we lack good ideas. The problem is that California has been mainly operating on one axis. The relational one. Coalitions, passing legislations, signing ceremonies.

What I heard Friday night was a glimpse of the three components of The Triangle’s framework:

—> The clarity about what we are actually optimizing for, the willingness to name tradeoffs out loud, and the idea of building trust through coalitions. All were sitting in pieces across the stage.

Nobody was carrying all three at once.

I call this The Triangle. Clarity. Power. Tradeoffs. The three things any hard problem needs, together.

What I saw Friday was The Triangle in pieces.

One big idea

California does not have a housing idea problem. We have an integration problem. Five candidates between them have most of the platform we need. The next governor's job is not to invent it. It is to assemble it. And to absorb the political cost of saying yes to all of it.

One thing to reflect on

When you scan your own work, what do you do well? Clarifying the thing you want to get to? Accepting tradeoffs? Building trust and coalition?

One thing to act on

Pick a problem you have been working on. Write three sentences. What is the main outcome you want to get to? Who has to say yes? What tradeoff have you not named out loud?

If any of the three is blank, that is where the work is.

Our last issue also discussed the positions of the running candidates for California Governor. This time on affordability and accepting trade offs to get there.

—> Read it here.

Nader Afzalan, Ph.D.

Founder and CEO, The Triangle

Program Director, Sustainable Environmental Design, UC Berkeley