California political class’s smungness on full display as they crow about housing law victory in court

It seems we are not allowed to have honest policy disagreements in California anymore. On Thursday, the Ninth Circuit Court of Appeals rejected an appeal from the City of Huntington Beach that challenged new state housing mandates. The city’s case was a legal Hail Mary, an attempt to apply arcane rules of city government to exempt itself from the mandates. The court dispatched the appeal in a short, unremarkable, and unpublished four page decision. It is legal and political inside baseball of interest only to a few lawyers, lawmakers, and policy wonks. Nevertheless, Governor Gavin Newsom and state Attorney General Rob Bonta wasted no time in issuing a gloating press release in which they went out of their way to smear those who dare question the state’s mandates.

The brief statement positively oozes self-satisfaction. You could practically smell the slick hair gel. “Today, yet another court has slapped down Huntington Beach’s cynical attempt to prevent the state from enforcing our housing laws. Huntington Beach officials’ continued efforts to advance plainly unlawful NIMBY policies are failing their own citizens — by wasting time and taxpayer dollars that could be used to create much-needed housing. No more excuses — every city must follow state law and do its part to build more housing.”

“Slapped down.” “Cynical attempt.” “No more excuses.” Newsom and Bonta aren’t even capable of being gracious in victory. Then again, it’s sadly unsurprising. Californians have long known that Newsom is a man of low character, the sort who slept with his best friend’s wife, showed up drunk for a photo op at a hospital emergency department where a police officer lay dying, and dined with lobbyists at a Michelin starred restaurant during the COVID pandemic while millions of working Californians languished under his draconian lockdown orders. Meanwhile, Rob Bonta and his wife, the execrable assemblywoman Mia, have been accused repeatedly of multiple financial conflicts of interest for their own personal benefit.

Actual leaders would have used last week’s win to extend an olive branch and unify with their erstwhile rivals. Actual leaders would have said something like, “Now that the Ninth Circuit has settled the matter, reaffirming the constitutionality of California’s housing laws, it’s time to put our differences aside and get back to the hard work of addressing our state’s housing affordability crisis. The legislature and the judiciary have done their part, now cities must step up and do their part. We look forward to working together.” You know, grownup stuff.

Of course, we sorely lack such quality of leadership in California these days. It’s all about ostentatious victory dances, elementary school gloating, and punching down. Remember this moment the next time someone laments political division in this country. California’s Democrats cannot even unify their own state. They’re too busy being pleased with themselves.

Consider the hubris. To California’s increasingly bonkers political class, a rational legal challenge to what many – myself included – consider egregious state overreach related to local housing is a waste of time and taxpayer money. Pardon the pun, but it’s pretty rich for an administration that lost between $20 and $30 billion to fraud during the COVID pandemic and recently admitted they have no earthly idea where another $20 billion went in homeless spending to now bray over a couple million bucks in legal fees for a city’s reasonable challenge to newly imposed, unprecedented state authority and mandates.

The worst part is the “NIMBY” reference. For the blissfully uninitiated, that stands for “not in my backyard,” and it’s a smear tantamount to calling someone racist. In this case, an entire city. Like calling someone a Nazi, YIMBY is their way of shutting down debate. California’s political and financial classes routinely deploy it to personally discredit those who have the gall to point out that their housing mandates – the numbers of which come from a “study” by none other than McKinsey & Company, the same fine folks who paid a nearly $600 million fine in 2021 for another “study” that helped create the opioid addiction epidemic and currently are under investigation for work performed for various foreign adversaries including China’s military – are not only unrealistic but fantastical. The slur appeared three times in Newsom’s office’s press release, including in the headline.

For what it’s worth, I happen to know and have worked closely with a Deputy City Attorney in Huntington Beach who worked on the case. She is as dedicated a public servant as you will ever meet, deeply committed to her city, county, and state, and to the people who live here. On a personal note, I find it repugnant that the likes of Newsom, who unlike my friend has had his entire political career gifted to him on a silver platter by the state’s monied elites, would take that kind of cheap shot at people like her.

Then again, at this point Newsom doesn’t have much else besides personal invective at his disposal. He will go down as a failed governor. It’s all but impossible to think of an aspect of life in California that has not gotten worse over the five and a half years he’s been in office. On his watch homelessness metastasized from an emergency to a full-blown humanitarian crisis of historic proportions. Tens of thousands have died, and hundreds of thousands of lives have been destroyed. Meanwhile, unless you’re fortunate enough to be a tech titan, heir to a ginormous fortune, or, like Newsom, an errand runner for both, your living costs have become downright crippling. Our public schools continue to be a disgrace, as does our foster care system. The state has one of the worst business climates in the country, with stalwarts like Oracle, Hewlett Packard, Charles Schwab, AECOM, Tesla, Chevron, and CBRE among the some 300 companies decamping for friendlier states over the last five years, taking their thousands of good paying jobs and billions in tax revenue with them. Other companies like American Airlines, Lockheed, and Northrup Grumman have relocated large portions of their work forces out of the state. How bad does one have to be at governing to chase leading aerospace companies out of the state that dominated the industry for 75 years?

And never forget, during COVID his administration’s lockdown mandates were, to mix metaphors, simultaneously heavy-handed and ham-fisted. Places of worship, mom and pop stores, and parks and other public spaces were closed down for nearly two years, while liquor stores, marijuana dispensaries, and big box stores operated with impunity. As Californians languished, he spent six months on a vanity tour of Republican states to lecture them about “the California ideal” in preparation for a presidential run that was realistic only in his own fever dreams. And again, he flipped one of the biggest f.u.’s to voters in American political history with his unmasked, undistanced dinner at the French Laundry. With, of course, pharmaceutical lobbyists. Any questions?

These are Newsom’s legacies. It’s truly remarkable how much damage he and the legislature have inflicted in such a short period of time, all in the name of “progress.”

To return to the Huntington Beach case, though the legal arguments were doomed from the start, the fact remains that California’s housing mandates are unnecessary, unrealistic, and unattainable. Huntington Beach is required to build – not just zone and approve, but cause to be constructed – 13,368 new units between 2021 and 2029. According to the Census Bureau, the average household size in the city is 2.59 people, meaning that’s enough new housing for 34,632 people. That’s 18.4% population growth in eight years in a city of just under 200,000. For perspective, in the previous 20 years Huntington Beach grew by just 9,117 people, or 4.8%. Viewed another way, the state is mandating, and enforcing in court, housing numbers that would require the city to grow 906% faster than it has historically, incurring all the approvals, rezoning, and, crucially, new infrastructure to support new housing that obviously is not needed. This is the framework that Newsom and Bonta are bragging about. They may as well brag about spotting the Great Pumpkin.

Moreover, if the city doesn’t meet these insane targets, the state Department of Housing and Community Development (“HCD”) has the legal power to take over its zoning, land use, and development decisions in perpetuity. Which is, of course, the goal. Cities around the state are similarly being set up to fail. Sacramento and the political class will take over, and divvy up the state to their financial, tech, and real estate benefactors. If you want to understand the playbook, just study the history of the state government’s roll in the expansion of the railroads and the associated boom in real estate speculation in the 1800s. It’s all there, for all to see.

In total, new laws mandate some 2.5 million new units of housing in California, enough for five to seven million people, at a time when the state is losing population. The state’s housing mandates aren’t just out of line with need, they represent nothing less than magical thinking. Yet rather than adjust to reality, lawmakers and bureaucrats are ramming these numbers down cities’ throats.

Another bonkers example: The City of Santa Monica has a residential vacancy rate of between 15% and 20% (the number is hard to pin down, partly because the city does a bad job of calculating it and partly because landlords use all sorts of dodges and tricks to inflate their occupancy rates, and therefore their property values). Like California as a whole, the city’s population has contracted slightly over the last three years. Nevertheless, the state is mandating 8,887 new units by 2029, enough housing for 17,701 people in a city of just under 90,000. Never mind that every single new and newish building in the downtown core – the ones built and owned by big corporations – is offering months of free rent, free gym memberships, and other perks just to get warm bodies through the door for a tour. These are not exactly the signs of an overheated market desperate for new supply.

Hardly a white hot rental market in desperate need of new supply.

Their argument that California has a housing crisis is, in a word, nonsense. Vacancy rates statewide generally are within healthy margins, with the only outliers being places like Santa Monica that have too many units sitting empty. Rather than focus on the real issue, which is housing affordability, Sacramento has unleashed a profit-driven gold rush for developers, particularly speculators, the vast majority of whom could not possibly care less about issues like quality of life and neighborhood cohesion. With apologies to the late John McCain, it’s just “build, baby, build.” Their theory, such as it is, is that forcing construction of millions of market rate and luxury units will push housing costs down across the board. They euphemistically call it “filtering,” because they can’t use the actual term, which is trickle down economics. 

That probably explains the intensely personal nature of Newsom’s, Bonta’s, and the rest of the political establishment’s attacks against those who question, much less challenge their authority. They cannot stick to the facts because the facts are so obviously against them. They can’t argue the law in any detail because the laws they support are not intended to truly ease the affordability crisis but to set the stage for a state takeover. If they stuck to facts and laws the jig would be up. So instead they smear detractors as YIMBYs and racists. It’s really all they’ve got.

One thing we do know, as I’ve written previously, is that that the political class in general, and Newsom in particular, love playing tough. Along with housing he’s recently declared open war on cities on a range of issues, including homelessness, education, and transportation. He wants to phase out internal combustion vehicles by 2035. No word, of course, on how lower income Californians will afford Teslas.

At his core, like so many of his fellow travelers in the legislature, Gavin Newsom does have one actual conviction: He views local government, which is closest to the people and most closely reflects their values, beliefs, and aspirations, as a problem, a barrier to the ultimate agenda. He unleashes state lawyers on cities that try tapping the brakes on more homeless housing, or that push back on those absurd housing mandates. Rules for thee, not for he. The closest he gets to actual work are photo ops, choreographed spectacles like him picking up a few pieces of garbage near an illegal encampment in L.A. Then he goes back to Sacramento to do whatever he spends his days doing.

Considering the state’s condition, it certainly doesn’t involve governing.