California’s general election is shaping up to be one of the most consequential for the real estate industry in recent years. In the governor’s race, current Lieutenant Gov. Gavin Newsom is squaring off against Republican challenger John Cox, a businessman who wants to loosen regulation to encourage development. Newsom’s focus is on building affordable housing, and he wants to address the state’s worsening housing shortage with more state tax credits for developers. About 54 percent of voters are in favor of Newsom for governor, while 31 percent prefer Cox, according to an L.A. Times poll published on October 17.
But perhaps even more important to the industry will be the public’s decision on Proposition 10. Passage of the ballot measure would strike the Costa-Hawkins Rental Housing Act, thereby allowing local governments around the state to pass broad new rent control laws. Polls show that public opinion is split on this issue — more so than on any other measure or race for office. Even the possibility of new rent control laws is causing developers around Los Angeles to put projects on ice until after voters decide on Prop 10. The Real Deal tracked how much players in the real estate industry have donated to advocacy groups that are for and against Prop 10 and other measures on the ballot, sourcing data from California’s Fair Political Practices Commission.
The Real Deal analyzed the races for governor, lieutenant governor and attorney general to track which candidates received money from entities and individuals in the real estate industry. Please note that lists of donors and donations are not comprehensive and include donations to political action committees and political party committees. In California, individual donations to gubernatorial campaigns are capped at $29,200. For the lieutenant governor and attorney general races, individual donations are limited to $7,300.
Governor’s race
Gavin Newsom
Democrat
Lives in: Kentfield
Campaign war chest: $46.2 million
Notable real estate donors
• Frank Gehry and Berta Aguilera Gehry, architect and accountant at Gehry Partners, $58,400 (each donated the individual campaign limit of $29,200)
• California Association of Realtors, $42,800
• Avy Azeroual, founder of Sun Equity Partners, $29,200
• Victor Coleman, CEO of Hudson Pacific Properties, $29,200
• Nelson Rising, CEO of Rising Realty Partners, $28,200
• Bradley Gluckstein, CEO of Apex Realty, $25,000
• Bill Witte, CEO of Related California, $10,800
• Robert Hart, CEO of TruAmerica Multifamily, $10,000
• Tami Pardee, CEO of Halton Pardee + Partners, $10,000
• James Rosten, principal at Benedict Canyon Equities, $10,000
• Robert Yu, president of Robert Yu Properties, $10,000
Real estate issues:
• The lieutenant governor wants to increase the Low-Income Housing Tax Credit program from $85 million per year to $500 million “over the next few years,” according to his campaign. The program provides tax credits to developers for building affordable housing.
• Newsom opposes the passage of Proposition 10 (see more details on page 20). He argues that it would have a “chilling effect” on housing production. Still, he said he could be in favor of regulating rents in more units across the state and making evictions more difficult.
• Newsom wants to encourage housing development near transit and supports making transit funding conditional on a city meeting its housing production goal. He also said he would support a means for developers to appeal to a higher body of government when a local government refuses to allow a housing development to proceed.
• The candidate wants California to build 3.5 million homes by 2025.
John Cox
Republican
Lives in: San Diego
Campaign war chest: $10.2 million
Notable real estate donors
• David and Adam Horowitz, CEO and president of Horowitz Management, $58,400 (each donated the individual campaign limit of $29,200)
• Lorna Auerbach, CEO of Auerbach Realty Holdings, $29,200
• William Bone, chairman of the board at Sunrise Company, $29,200
• Geoff Palmer, founder of G.H. Palmer Associates, $29,200
• Steven Craig, president at Craig Realty Group, $5,000
• Ron Lane, president of Lane/Kuhn Pacific, $5,000
• Jon Muller, principal at the Muller Company, $5,000
• Robert Neal, managing partner at Hager Pacific Properties, $5,000
• Bryon Ward, partner at Burnham-Ward Properties, $5,000
• Arne Youngman, partner at Pacific Development Group, $5,000
Real estate issues:
• Cox wants to repeal and replace the California Environmental Quality Act (CEQA), the state’s controversial law that arguably directly impacts developers more than any other legislation. The law — if applicable to a project — requires that a developer determine the environmental impact of a development and offer mitigating measures. The reviews typically take at least a year to complete.
• Cox hasn’t offered too many specifics about what he would replace CEQA with, but his goal is to reduce the costs of development.
• Cox opposes Proposition 10, a ballot initiative that would allow local governments to enact new rent control measures, saying that “price controls never, ever work.”
• Cox also opposes allowing the state to force any housing requirements on local governments.
• The candidate wants California to build 3 million new homes by 2028.
Eleni Kounalakis and Ed Hernandez
Lieutenant governor’s race
Eleni Kounalakis
Democrat
Lives in: San Francisco
Campaign war chest: $6.9 million
Notable real estate donors
• Alex Spanos, founder of A.G. Spanos Companies; Faye Spanos, wife of founder; and A.G. Spanos Companies, $19,600
• Patrick Chraghchian, president of Povac Investments, and Hamlet Chraghchian, director of construction at Povac Investments, $14,600
• California Association of Realtors, $14,600
• George Marcus, chairman of Marcus & Millichap and affiliated entities, $14,599
• Doug Neff, president of IHP Capital Partners, $7,300
• D. Gregory Scott, managing director of Peak Holdings, $7,300
• Michael Hackman, CEO of Hackman Capital Partners, $5,000
• Stefan Manolakas, president of Palisades Properties, $5,000
Real estate issues:
• Kounalakis is the daughter of Sacramento developer Angelo Tsakopoulos and was president at his firm, ATK Development Corporation, before becoming U.S. Ambassador to Hungary in 2010. She has billed herself as a “housing expert” who wants to build more affordable housing, although her campaign hasn’t offered many details about how to do that.
• Kounalakis said she would aim to bring down the cost of higher education in California, namely by bringing down the cost of on-campus housing and by building more of it. That’s one thing the lieutenant governor could do, since the position comes with a seat on the Board of Regents of the University of California and the California State University Board of Trustees.
• Kounalakis has also spoken about the need to invest in infrastructure.
Ed Hernandez
Democrat
Lives in: Asuza
Campaign war chest: $10.2 million
Notable real estate donors
• State Building and Construction Trades Council of California, $14,600
• California Association of Realtors, $8,200
• American LA Realty, $5,000
• Andrew McIntyre, president of The McIntyre Company, $1,500
• Craig Garret Cook, owner of Baldwin Homes LLC, $500
• David Cook, owner of WC Homes, $500
• Los Angeles/Orange Counties Building and Construction Trades Council, $500
Real estate issues:
• Hernandez wants to bring down the cost of student lodging by encouraging more off-campus housing. In September, he said the state should consider a tax break for developers building residential units off-campus.
• Hernandez said the state “has to do everything [it] can” to make it easier to develop housing, especially affordable units. He also wants to build more homes along transit corridors to encourage the use of mass transit.
Xavier Becerra and Steven Bailey
Attorney General’s race
Xavier Becerra
Democrat
Lives in: Sacramento
Campaign war chest: $6.4 million
Notable real estate donors
• California Association of Realtors, $14,600
• Community Builders Group and company managing member Joe Seager, $14,600 ($7,300 donated independently)
• George Marcus, chairman of Marcus & Millichap, $14,600
• Edward Roski, CEO of Majestic Realty Co., $14,600
• Haim Saban, CEO of Saban Capital Group, $14,600
• Harvest Realty Advisors, $7,300
• Alan Sieroty, chairman of Sieroty Company, $7,300
• Renee Wilson, architect at Dake Wilson Architects, $7,300
• Jeffrey Worthe, president of Worthe Real Estate Group, $7,300
Real estate issues:
• Becerra is the incumbent and, as attorney general, has made a point of going after people who allegedly price-gouged consumers looking for short-term housing following the state’s wildfires last year.
• Becerra has strongly opposed the Department of Housing and Urban Development’s decision to shed some consumer protection policies, including those shielding potential borrowers from lending discrimination.
• He also opposes ending a federal program that helped local governments prioritize development goals to reduce the concentration of poverty and provide better access to housing and job opportunities in their jurisdictions. However, he hasn’t filed suits against the federal government for either action.
Steven Bailey
Republican
Lives in: South Lake Tahoe
Campaign war chest: $465,000
Notable real estate donors
None
Real estate issues:
• The superior court judge in El Dorado County has built his platform around criminal justice issues and, as a result, hasn’t spoken much about housing and real estate in general.