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America’s housing affordability crisis keeps getting worse — and the nation’s most populous state just escalated its fight against communities standing in the way of new homes.
California Gov. Gavin Newsom and the state’s Department of Housing and Community Development issued final warnings to 15 cities and counties that have failed to comply with state housing law, giving them 30 days to respond before facing potential legal action.
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What’s going on
Under California law, every community must adopt a housing plan — known as a “housing element” — showing how it intends to meet regional residence needs across all income levels. Ninety-two percent of the state’s jurisdictions have complied. These 15 holdouts are more than two years behind schedule with no clear path to getting it done.
The communities that received notices this week are: Atwater, Avenal, California City, Corcoran, Escalon, Half Moon Bay, Hanford, Kings County, Lemoore, Merced County, Montclair, Oakdale, Patterson, Ridgecrest and Turlock. An additional 22 jurisdictions on track to finalize their plans will also face notices if they don’t wrap up within 60 days.
“No community gets a pass when it comes to addressing homelessness or creating more housing access,” Newsom said.
Read More: Robert Kiyosaki warned of a ‘Greater Depression’ — with millions of Americans going poor. Was he right?
Why Americans beyond California should care
Housing prices nationwide have climbed roughly 60% since 2019, with the median existing home now selling for about five times the median household income, according to a Harvard Joint Center for Housing Studies report (1). More than half of U.S. households — roughly 70 million — can’t afford a $300,000 home, per the National Association of Home Builders (2).
A major reason supply hasn’t kept pace with demand is due to restrictive local zoning. Roughly 75% of residential land in many American cities is zoned exclusively for single-family homes, according to a New York Times analysis of UrbanFootprint data (3), leaving little room for the duplexes, townhomes and apartment buildings that could add supply.
It’s not just a blue-state problem, and it’s not just California trying to fix it. The Mercatus Center at George Mason University, which tracks state-level housing reform, notes that restrictive local zoning is the fundamental cause of America’s housing shortage (4).
Montana passed sweeping zoning overhauls in 2023 and doubled down in 2025, while Colorado, Oregon, Washington, Vermont and others have enacted their own reforms to override local barriers to building (4).
The Minneapolis Federal Reserve, which has tracked these efforts since 2023, notes that in 2025 alone, states like California, Florida, Maine, Montana, Oregon and Washington all returned to further expand housing-friendly policies (5).
California is the furthest along — and what happens here will likely set the template for other states.
Policymakers are trying to unclog one of the housing market’s biggest bottlenecks — supply. But even with more supply trickling in, high borrowing costs continue to weigh on affordability. The average rate on a 30-year fixed mortgage has risen to 6.37%, making borrowing significantly more expensive, even if home prices stabilize or dip slightly (6).
But that doesn’t mean you’re out of options. Real estate crowdfunding platforms now let you get exposure to property deals with as little as $100.
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With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets Lightstone pursues with its own capital, with minimum investments starting at $100,000.
Things to keep in mind if you’re purchasing a home
With the Federal Reserve expected to hold rates steady amid lingering inflation concerns, mortgage rates may remain high for now. But that doesn’t necessarily mean you’re locked out of the housing market.
There’s still some room to maneuver — especially if you’re willing to shop around. According to LendingTree, borrowers who compare lenders can save an average of $80,024 over the life of a mortgage by locking in a more competitive rate (7).
Platforms like Mortgage Research Center can help you search for rates offered by reputed lenders near you for free — all from the comfort of your home.
All you have to do is answer some basic questions about your property and your finances (including your annual income and credit score), and Mortgage Research Center will compile a list of the best offers from lenders near you.
And the mortgage is only part of the equation. Homeowners’ insurance is also getting more expensive, with the average monthly premium for a single-family home climbing to a record $201 last year — up 72% since 2019, according to ICE Mortgage Technology (8).
This means it’s important to shop around. Insurance rates are always changing — you could save up to $482 by taking the time to find the most affordable option currently available to you.
That process is now easier than ever with OfficialHomeInsurance.
You can compare rates and features on home insurance policies from top providers near you for free in under two minutes through OfficialHomeInsurance.
Just answer a few basic questions about yourself and your home, and OfficialHomeInsurance will comb through its database of over 200 insurers to display the lowest rates available.
California’s enforcement playbook
Newsom established the Housing Accountability Unit in 2021, and it’s been busy. The unit has taken more than 1,200 accountability actions and “unlocked” 12,486 housing units — including more than 3,644 affordable units — that had stalled in local planning. The state has filed five housing-related lawsuits and secured favorable outcomes in all of them.
The enforcement push is tied to Newsom’s broader strategy on homelessness. California voters approved Proposition 1 in 2024, which is delivering 6,919 residential treatment beds and 27,561 outpatient treatment slots for behavioral health care. The governor’s SAFE Task Force is clearing encampments in the state’s 10 largest cities and connecting people with shelter.
Sacramento’s position is straightforward: homelessness is a housing supply problem, and local governments that block new housing are part of it.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Joint Center for Housing Studies of Harvard University (1); National Association of Home Builders (2); New York Times (3); Mercatus Center at George Mason University (4); Federal Reserve Bank of Minneapolis (5); CNBC (6); LendingTree (7); Scotsman Guide (8)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
