How California’s Next Governor Would Tackle Rent, Insurance and Housing Costs

“Everybody up there was expected to have a plan and demonstrate how they were going to execute on delivering more affordable housing in California,” she said. “That’s a crazily different place than we were eight years ago, 10 years ago.”

Each candidate is trying to stand out in the most competitive primary for California governor in two decades. But many are hitting the same broad talking points: lower the cost of construction, make homeownership more accessible and reduce homelessness. Where they differ is in the details of how they’ll get there. Meanwhile, some voters feel discouraged by key issues they say are missing.

Katherine Peoples-McGill drove to Oakland from Altadena earlier this month to attend a debate sponsored by the Housing Action Coalition and other housing nonprofits. She runs the Rebuild Center for Altadenans, which assists survivors of the 2025 Los Angeles wildfires. She was disappointed none of the candidates had visited her center, much less mentioned wildfires in their comments.

“Altadena can happen anywhere in this country, anywhere in the state of California,” she said, “and for [the candidates] to really not be involved in that was a little shattering.”

There have, however, been plenty of proposals about how to reform the state’s home insurance industry. As top insurance companies, including Allstate, State Farm and American International Group (AIG) have left the state or pulled back from offering new policies, more Californians are seeking coverage through the state’s FAIR Plan, a self-proclaimed “insurer of last resort.”

As of March, more than 684,000 homes and businesses across the state have policies under the FAIR Plan, according to the insurer. That’s a 152% increase in active policies compared to September 2022.

But insurance experts say it’s a dangerous sign. Last year, private insurance companies gave the FAIR Plan $1 billion to stay solvent and help pay customer claims from the Los Angeles fires. Industry observers told KQED that a large fire could wipe out the FAIR Plan’s reserves.

“I’m on the un-FAIR plan,” former Los Angeles Mayor Antonio Villaraigosa said at a forum held by the California Association of Realtors in March. “If my house [burns] down, I won’t be able to get a fraction rebuilding that house.”

If homeowners do need to rebuild — the need to do it faster and cheaper, as well as to create new housing — is one issue candidates across the aisle agree upon. A study published last year by the research group RAND showed California is the most expensive state to construct apartments. Candidates repeatedly mentioned that finding as an argument to bring down the cost to build market-rate and subsidized homes.

It’s also an issue that’s received interest from the California Legislature, as well as Congress. A federal bill with bipartisan support is slowly making its way to the White House, which would incentivize manufactured housing projects across the country. In California, lawmakers are working on a package of bills that would support the industry locally.

Oakland Assemblymember Buffy Wicks is spearheading California’s bill package, which focuses on making it easier to get factory-built housing off the ground. The Democrat said it’s an innovation that hasn’t been widely successful because there hasn’t been steady support from the building industry.

“These fights are so hard politically,” she said. “I want someone, in terms of my next governor, who has the spine of steel to take those fights head on and to prioritize housing as where they are going to spend their political capital.”

Wick hasn’t endorsed any candidate in the race so far. But Democratic candidates Katie Porter, billionaire Tom Steyer and former state attorney general Xavier Becerra have all argued that modular and factory-built construction could hasten building timelines and streamline the process.

Other candidates are focusing on what the state can do now to incentivize and ease the path of traditional building methods.

State Superintendent Tony Thurmond has campaigned on building 2 million affordable homes on school district-owned surplus property. Riverside County Sheriff Chad Bianco wants to end the “over-regulation of our building industry.”

British American political commentator Steve Hilton and Mahan, mayor of San Jose, have both talked about capping fees that cities often impose on developers to offset the impact of new development. A recent study from UC Berkeley’s Terner Center for Housing Innovation found that these “impact” fees contribute to less than 5% of total development costs, but can nonetheless deter it.

In recent years, the state legislature has passed modest reforms, but Hilton has argued for a more straightforward fix: capping fees at 3% of a project’s construction costs.

“We’ve had hundreds of bills on this in the past few years, and it’s barely moved the needle,” Hilton said at a March forum. “A secret exemption here and a little incentive there, and it just makes it more and more complicated, more and more bureaucratic.”

Bringing down the cost of construction may be critical in a state where it is now more expensive to own than rent in many cities. Several of the gubernatorial candidates shared support for a $25 billion bond headed to the November ballot that would support more middle-class homeownership. Thurmond has supported existing state-sponsored down-payment assistance programs, including the California Dream For All program and CalHome, and talked about expanding funding for those programs — something advocates have been calling for.

But when it comes to protecting the interests of renters, the candidates are divided on the best course. Steyer, Becerra, Villaraigosa and Thurmond have said they are in favor of some form of government-imposed rent caps, including extending and enforcing the Tenant Protections Act, a 2019 law that limits annual rent increases and restricts evictions. It’s set to expire in 2030, within the next governor’s term.

But Porter, a former state representative, has bucked that trend. In a KQED Town Hall, Porter said that she opposes rent control. And while she said she supports the Tenant Protection Act, she argued that it can slow down construction and force people to stay put, regardless of whether moving would benefit their family or lifestyle.

“If you have a rent-controlled unit, it works really, really well for you — now, you’re stuck there,” she said. “Decide to have a couple kids, better get bunk beds because you can’t leave it, right?”

Zach Murray, statewide campaign coordinator for the tenants rights group, Alliance of Californians for Community Empowerment (ACCE), said he was unsatisfied with the conversation around the expiring Tenant Protection Act and how renters could be affected.

“Democrats are not seriously addressing the concrete [affordability] needs, the needs for affordable housing, the needs for utilities, the needs for greater cost reductions across the board,” he said. “When we get legislators and a governor who takes those needs seriously, then I think we’ll begin to see change in our state.”

Tenant advocates have argued that measures that limit evictions can also help prevent homelessness — an area where the state has recently been making strides. Unsheltered homelessness fell 9% last year, according to preliminary data from the governor’s office.

A 2024 audit from the Legislative Analyst’s Office found that Gov. Gavin Newsom spent about $24 billion to address homelessness and housing during the previous five fiscal years. On KQED’s Political Breakdown podcast, Bianco said the current administration threw money at homelessness but didn’t show consistent results.

“[Newsom thinks] he’s so great because he gave more money than any other person in history to the homeless,” the Republican candidate said. “The amount of money means absolutely nothing. I’m going to measure [solving homelessness] by fewer tents on our sidewalks. That’s how you judge whether or not you’re doing something right.”

Bianco, Steyer, Mahan and Villaraigosa have advocated for emergency interim shelters as a more cost-effective way to get people off the streets. During the Housing Action Coalition’s forum in May, Mahan spoke about his experience as mayor, creating 23 interim housing sites with “no-encampment zones” surrounding the sites.

“Not everybody loves the idea of a no-encampment zone, but that’s how we got community buy-in,” he said. “When we built interim housing and got people stabilized indoors and connected to case management, calls for service for crime — 911 — for blight — 311— plummeted.”

To get more permanently affordable homes built, several candidates have proposed streamlining applications for state funding, so developers aren’t piecing together financing from various sources and can cut down construction costs by getting homes built faster.

That desire could come at an opportune time as the state prepares to consolidate its myriad agencies overseeing housing and homelessness programs into one department, called the California Housing and Homelessness Agency. It is set to open this summer.

At the Housing Action Coalition’s May forum in Oakland, land use expert Alex Schafran said he was amazed to see a governor’s debate focused exclusively on housing. However, it also struck him that there was consensus onstage and among many attendees, “including people who used to not get along 10 years ago and are now starting to find ways to work together.”

That will be critical, Shafran said, because the eventual governor will likely still need to work alongside his or her former rivals.

“Whoever wins still has a lot of work to do in a really difficult and expensive environment,” he said. “Now the hard part really begins.”