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The Real Deal Los Angeles

Gavin Newsom wins governor’s race; vowed to address state’s housing crisis

Newsom also has said he supports easing some regulations on real estate development
By Dennis Lynch | November 06, 2018 09:30PM

Gavin Newsom and John Cox (Credit: Getty Images, iStock)

UPDATED, Nov. 7, 10 a.m.: Democrat Gavin Newsom coasted to a win in the California governor’s race Tuesday, a victory buoyed in part on a call to tackle the state’s severe affordable housing crisis.

With 97 percent of the precincts counted, Newsom had 59 percent of the vote to Republican candidate John Cox’s 41 percent.

Newsom, the two-term lieutenant governor, was expected to carry on many of the policies of outgoing Gov. Jerry Brown, although Newsom said that he supports easing some regulations on real estate development.

To address the state’s housing crisis, Newsom has said, “we need to attack the problem on multiple fronts by generating more funding for affordable housing.” He added that he was also in favor of “implementing regulatory reform and creating new financial incentives for local jurisdictions that produce housing while penalizing those that fall short.”

But in a speech last year, he cautioned “there is no silver bullet to solve” the crisis.

The former San Francisco mayor has hinted that he would support state-level measures to encourage housing near transit, something state Sen. Scott Wiener said he was trying to do with Senate Bill 827. That measure, which was defeated in April, aimed at alleviating the housing shortage and promoting affordability, especially in big cities like Los Angeles and San Francisco. But it was criticized for stripping municipalities of the right to decide their own zoning laws. Wiener is expected return a modified version of the bill to the Senate floor. Wiener supports making local transit funding conditional on the city meeting its housing production goals.

L.A. is facing a worsening housing crisis, as rising prices and falling inventory affect both homeowners and renters. Rents for one-bedroom units were up 16 percent in October compared to the same period in 2017. That was more than any other major city in the country.

Newsom raised more than $46 million for the governor’s race, including sizeable donations from architect Frank Gehry, the California Association of Realtors and real estate executives like Hudson Pacific Properties CEO Victor Coleman, Related California CEO Bill Witte, and Rising Realty Partners CEO Nelson Rising. All donated five-digit sums to his campaign.

Cox, a wealthy businessman with sizeable real estate investments in Illinois, favored loosening regulations on development to help spur multifamily construction. He also wanted to repeal and replace the California Environmental Quality Act to speed up the development process. His war chest totaled $16 million and at least a third of that was his own money. A number of real estate developers based in his hometown of San Diego contributed funds to his campaign.