In summary
California officials continued to fight with cities that don’t want to build more housing and everyone struggled to find more money to pay for new housing.
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California lawmakers in 2024 made good on a promise to push for more housing construction and hold accountable cities that resist creating affordable homes. But finding money to pay for all that new housing was another matter.
State officials continued to lock horns in court with Huntington Beach over the Orange County city’s refusal to plan for thousands of new homes, its share of the state’s overall housing goal. They reached a legal settlement forcing the Sacramento suburb of Elk Grove to approve more affordable housing. Norwalk, a middle-class community in Los Angeles County, found itself sued by the state after its city council passed a ban on homeless shelters and supportive housing.
Legislators passed bills to strengthen and clarify the state’s “builder’s remedy,” a law that gives developers free rein to build denser projects in cities whose housing plans haven’t earned state approval.
With few new sources of state funding coming online, however, the response of some local leaders has been, “Show me the money.”
Lawmakers chopped more than $1 billion in spending on affordable housing programs this year to help close a projected budget deficit – though they did dole out $1 billion for local governments to fight homelessness – and scrapped plans to put a housing construction bond measure on the November ballot.
In the Bay Area, a local financing authority yanked a $20 billion housing bond from the ballot at the last minute amid concerns it wouldn’t pass. The money would have helped affordable housing developers meet a state-mandated goal of building 180,000 homes for low-income residents by the end of the decade.
And a $500 million state program aimed at helping tenants and community land trusts buy distressed buildings and preserve them as affordable was killed after the state’s Department of Housing and Community Development failed to award any grants for three years.
At the ballot box, a push to expand cities’ ability to enact local rent control lost to a well-funded campaign by landlords and realtors, who said the measure would make it less profitable to build new multifamily housing. The AIDS Healthcare Foundation, a non-profit that has been the major funder of several rent control ballot propositions in California, suffered a double whammy loss when voters also approved a measure that will make it harder for the organization to bankroll such campaigns in the future.
Renters did score a win, however, with a new law set to take effect in January that will give them twice as much time to respond to eviction notices. And as of this spring, landlords of new apartment buildings constructed with state low-income tax credits will have to cap rent increases at 10% per year.
As the year drew to a close, some cities weighed major rezoning proposals that would make it easier to build multi-family housing in resource-rich neighborhoods. Los Angeles’s city council approved a plan to allow denser projects in commercial corridors and areas that already have apartment buildings, while largely exempting single-family neighborhoods – a move critics said lets wealthy areas off the hook for building their share of homes. Berkeley is set to decide early next year on a controversial plan to allow small apartment buildings in nearly all the city’s neighborhoods, including those where single-family homes dominate.
2025 outlook
California’s leaders will need to figure out how to fund and incentivize construction and preservation of affordable homes to meet their goals without the budget surpluses the state enjoyed previously. A major unknown is how the incoming Trump administration’s policies will affect the state’s housing crisis. President-elect Donald Trump has pledged to raise tariffs on foreign-made goods and deport large numbers of undocumented immigrants, both of which experts say would hamstring housing construction. His administration could also reduce federal support or tighten eligibility rules for public housing and Section 8 vouchers, confronting California with the choice of whether to bridge the gap for residents who rely on that assistance. Meanwhile, California’s Democratic-dominated leadership, smarting from 2024’s national electoral defeat, has pledged new efforts to address the exorbitant cost of living.
