Here’s How the Candidates for Governor Would Make California More Affordable

This story is part of How We Get By, a KQED series exploring how people are coping with rising costs in the Bay Area and California. Find the full series here.

California’s next governor will inherit an affordability crisis that defies easy fixes: housing costs that have outpaced incomes for years, electricity rates among the highest in the nation, and gas prices nearly $2 above the national average — all in a state whose economy remains the envy of the country.

Xavier Becerra, the former U.S. Health and Human Services Secretary and a Democratic candidate for governor, rattled off some of the biggest cost pressures as he spoke to more than 300 people in a high school gym in Concord last month.

“The cost of affording a home, your health care, groceries, gasoline,” he said. “That cost of living crisis that we face here — it becomes existential.”

The price of housing and energy has been unaffordable for Californians long before a post-pandemic surge in inflation made the cost of living the top concern for voters across America — and a potent political cudgel for politicians from President Donald Trump to New York City Mayor Zohran Mamdani.

So it’s no surprise that, in the most competitive primary for California governor in a generation, candidates from both parties are making affordability central to their campaigns, vowing to ease a cost crunch fueled in part by the state’s top-heavy economy, strict land-use policies and complicated transition from fossil fuels to clean energy.

“California is often leading the nation — most of the time, that’s for good,” said Neale Mahoney, director of the Stanford Institute for Economic Policy Research. “But on some of these issues, we’ve been the canary in the coal mine for some of the problems.”

The challenge: affordability has come to encompass such a wide range of cost pressures that the next governor could struggle to even define success.

While leading candidates in both parties agree that housing costs are the greatest strain on residents’ budgets, other affordability proposals run the gamut.

Among the Democrats, Becerra is vowing to freeze utility rates and home insurance premiums; investor Tom Steyer wants to return windfall oil profits to residents; San José Mayor Matt Mahan would pause the gas tax, and former congressmember Katie Porter is promising free child care.

On the Republican side, former Fox News commentator Steve Hilton wants to cut taxes and car registration fees, while Riverside County Sheriff Chad Bianco vows to bring down gas prices by encouraging oil production in the state.

The specifics may differ, but the political upside of running a campaign focused on affordability is undeniable. Trump hammered former Vice President Kamala Harris over inflation on his way to victory in 2024. The following year, Mamdani made the cost of rent and transit a centerpiece of his successful campaign for mayor — while fellow Democrats won governor’s races in New Jersey and Virginia on affordability platforms.

In the California governor’s race, candidates have leaned into their own personal histories as they attempt to connect with voters struggling with rising costs. Becerra has shared stories of his immigrant parents saving up to buy a house.

Mahan has recounted his working-class upbringing in the farming town of Watsonville. Hilton has pointed to his humble beginnings as the son of Hungarian refugees in London, and Porter has openly discussed the struggle of raising a family in the state.

“I’m the single mom of three teenagers who believe they will not be able to buy houses here in California,” Porter said at a debate hosted by CBS in April.

Voters like Luis Hernandez, who attended Becerra’s event in Concord, are looking for more than just campaign rhetoric. Hernandez is self-employed and buys health insurance through the Covered California exchange. He bemoaned rising premiums that are eating into his earnings and wants to know how the former attorney general plans to lower costs.

“Home insurance, car insurance and the worst is health insurance,” Hernandez said. “Everything is going up, so it’s tough.”

Traditional metrics for measuring affordability don’t neatly capture voter angst about cost pressures.

A longstanding gauge of purchasing power is real income, which measures pay after taking into account price increases. Real personal income increased by 5.5% in California between 2023 and 2024 — the largest jump in the nation, according to the Bureau of Economic Analysis. And real income for the median household in the state has risen to new highs after a post-pandemic decline.

Yet a UC Berkeley Institute of Governmental Studies survey last month found a whopping 40% of likely voters picked “reducing the cost of living” as a top priority of California’s next governor. No other issue came close — and voters also prioritized specific cost-related solutions, such as building affordable housing (12%), lowering gas prices (10%), reducing health care costs (7%) and cutting utility rates (4%).

What the macroeconomic statistics miss is that the most acute price pressures are on essential goods and services that are hardest for Californians to substitute, Mahoney said.

“Maybe the price of a flat screen TV has decreased, and that’s great,” Mahoney said. “But the price for health care, the price for housing … these are really essentials and price increases there hit in a really inescapable way.”

Nowhere is that more evident than the cost of housing. The median home value in California is more than twice the national average, putting homeownership, long a key pathway to middle-class financial security, increasingly out of reach.

A new report from the state’s Legislative Analyst’s Office found that a mid-tier home in California (a house with a value in the 35th to 65th percentile) costs about $775,000. Since 2020, the income needed to qualify for a mortgage on a mid-tier home has increased far more quickly than median household income.

“While home prices have stabilized, housing has become less affordable for most Californians in recent years,” the report found.

The leading contenders for governor share a focus on the supply side of the housing equation: finding ways to increase development and construction by streamlining or removing regulations and easing local zoning restrictions.

While Democrats Becerra, Porter and Steyer said they will focus their efforts on promoting denser housing near transit, Republicans Bianco and Hilton have argued for extending the growth of single-family neighborhoods.

“We do not have a land problem in California,” Bianco said in an April debate hosted by Nexstar. “We have a management problem, we have a government problem that we absolutely must take away.”

But affordability concerns in the state extend beyond the price of renting or buying a home, said Evan White, executive director of the California Policy Lab at the University of California.

“On average, Californians pay about twice as much for housing as the average American, they pay 60% more for utilities than the average American, they pay 40% more for gas than the average American, they pay 11% more for groceries than the average American,” he said. “We’re the most expensive state by far.”

Many of those cost pressures reflect California’s perilous position in the midst of a complicated transition from fossil fuels to clean energy. Californians are being hit with the costs of damaging wildfires fueled by years of climate pollution, while the state’s carbon-intensive oil and gas industry faces an uncertain future.

Gas prices in the state currently average $6.16 a gallon, per AAA — the highest in the nation. The gap between California and the national average is due in part to the cost of state fuel blend requirements, environmental regulations and what UC Berkeley professor Severin Borenstein has dubbed the “mystery gasoline surcharge.”

Bianco has proposed eliminating the state’s 61-cent-per-gallon gas tax, which funds road repair and transit. Hilton wants to reduce the gas tax and suspend the state’s Low Carbon Fuel Standard, which adds about eight to 10 cents per gallon. Steyer, by contrast, said he would seek to impose a cap on refinery profits and return any profits above the cap to residents.

Then there are electricity prices, which have increased dramatically in recent years — in large part due to investments made by investor-owned utilities to prevent future wildfires. The costs of those mitigation measures, such as undergrounding wires and trimming trees, were passed along to customers of PG&E, SoCal Edison and SDG&E.

Steyer has proposed cutting the utilities’ guaranteed rate of return for capital projects and making it easier for cities and counties to form publicly owned power providers.

“We’re going to have a different rule at the Public Utilities Commission about how they get paid,” Steyer told KQED’s Political Breakdown. “And we’re going to introduce local competition.”

Hilton is also a supporter of locally-owned utilities. He is proposing to reclassify hydropower from large dams as “renewable energy,” which he argues will reduce what utilities need to spend on wind and solar power to meet the state’s climate goals.

While the next governor has the ability to make progress on reducing these cost burdens, White cautioned that the challenges won’t be fixed overnight — or alone.

“The governor could do a lot to improve not only housing costs, but utility costs and other high costs in the state,” he said. “But they do need to be able to work with the Legislature effectively to do that.”

And even before polls close in the June 2 primary, many Californians struggling to afford life in the state have already voted with their feet.

White studied the migration trends of California households over the past decade. Forty-two states send fewer people to California than they did 10 years ago. And families who decided to leave California are improving their financial conditions and becoming more likely to own a home in the years after their relocation.

“It’s clear that when they move,” White said. “They’re moving to much, much, much more affordable places.”