Cities including Spokane, Tulsa and Memphis support pre-approved designs to streamline small-scale builds, similar to what California has sought to promote with its Pro-housing Designation Program (PDP).
But many question why California’s land entitlement process—getting the zoning, use and building design approval from local governments to comply with state mandates—often takes years, even in places designated as “pro-housing.” Maybe the answer isn’t more government funding, but involves fewer bureaucratic impediments.
While some advocates for PDPs argue that the state doesn’t do enough to push municipalities to produce housing, the Terner Center for Housing Innovation at UC Berkeley found that California has more incentivizing state mandates than most others. It’s not always easy to tap those subsidies. After Sunnyvale earned its pro-housing designation from the state and applied for the Pro-housing Incentive Program (PIP) in 2024, it was not awarded funds.
A news release from the office of Gov. Gavin Newsom states, “Governor Newsom’s Fiscal Year 2019-20 budget established the Pro-housing Designation Program as part of a spectrum of support, incentives and accountability measures to help meet California’s goal of 2.5 million new homes by 2030, with at least 1 million of those homes serving the needs of lower-income Californians.”
Only about 110,000 homes have been permitted each year since Newsom took office, the San Francisco Chronicle reported. Recently Newsom has been more prone to blaming local officials for the state’s housing crisis.
The Housing Supply Accelerator Playbook, released last year by the National League of Cities and the American Planning Association, notes that public and private stakeholders need to take a “holistic systems approach.” That means more collaboration between “local governments, planners, real estate professionals, developers, builders, financial institutions and (the) state.”
“The accelerator highlights what California’s 483 cities are practicing in their communities every day: public outreach and community engagement that are critical for the planning and development of new housing,” Brady Guertin, legislative advocate with the League of California Cities, told the Free Cities Center via email.
Guertin said that in the past seven years, state lawmakers have passed more than 100 pieces of legislation to address the state’s housing crisis, yet the crisis only continues to grow. “This legislation has primarily focused on top-down, one-size-fits-all approaches that disregard vital community input, focus on penalizing a few bad actors and fail to adequately support the vast majority of cities acting in good faith and working to achieve the state’s housing goals,” Guertin said.
He emphasized that cities do not build housing” “They can only do their part to plan for, site, and work collaboratively with stakeholders and the community to promote residential development. There are several factors that increase costs, such as available labor, materials, insurance and inflation that are out of cities’ control.” The average cost to build a housing unit in California ranges from $400,000 to well beyond $1 million.
Sunnyvale primarily uses local Housing Mitigation Funds to support creating more affordable housing for lower-income households, Rachel Davis, Deputy Public Information Officer for Sunnyvale, told the Free Cities Center by email. Since 2020, the city has awarded more than $70 million in Housing Mitigation Funds to develop more than 1,000 new affordable units and rehabilitate another 150 existing affordable units. New housing developments also have combined private and public funding sources.
Despite the Newsom criticism on the pace of construction, the Sacramento/Roseville/Folsom area has authorized 7.5-percent more units since 2022, according to Construction Coverage, using U.S. Census Bureau data, ranking the area 18th nationwide for large metros.
The Streamline Sacramento initiative notes that cities can control the speed of permitting and applications: “While we cannot control interest rates, inflation or the cost of labor and materials, we can control the process and certainty.” Sacramento was awarded $2.5 million from the state’s PIP in 2023, the first round of funding.
The Housing Supply Accelerator Playbook also features many California jurisdictions using pro-housing strategies, and recommends doing “a comprehensive assessment of the building permit and land entitlement processes to identify gaps, obstacles and opportunities to streamline the process for applicants.” That’s likely more significant than any lack of subsidies.
The city of San Luis Obispo, which worked to reopen the Anderson Hotel Apartments, features a streamlined permitting process on its Pro-housing Designated page. Yet a Transitions Mental Health Association project to renovate a home into studio apartments recently stalled amid higher construction costs. These mainly target low-income residents and the homeless.
The California budget for 2025-26 allocates far less money for homeless programs than previous years. “Instead of overreaching mandates, the state needs to work alongside local governments to address this decades-in-the-making crisis,” Guertin of the League of California Cities said.
“Cities plan and zone for housing, but they do not build homes. They rely on developers to come into local communities to construct housing. Funding is one of the biggest barriers for both local governments and housing developers when it comes to housing actually being built. In fact, lawmakers and the governor have steadily decreased the amount of state financing for affordable housing in recent years, including nearly $2 billion in cuts to housing programs just last year.”
Guertin says a “strong financial partnership with the state focused on incentivizing development is key if we are ever to get out of this crisis.” But the biggest key—and one we focus on repeatedly at the Free Cities Center—is for the state and local governments to reduce their regulations and fees and let the private market do the rest.
Sarah Downey is a journalist who covers political and social policy. She’s reported for Newsweek, the Chicago Tribune and Boston Globe in the United States and overseas.
