Billionaire Candidate for California Governor Says Cities There 'Do Not Want New Housing'

May 6, 2026 - 18:40

During a televised debate on Tuesday, Democratic candidate for California governor Tom Steyer made a blunt claim about the state's housing crisis. He argued that many cities in California actively resist new housing development not because of zoning laws or environmental concerns, but because they simply cannot afford to welcome more residents.

Steyer, a billionaire investor and former presidential candidate, said local governments are trapped by a broken financial system. "The reality is that cities do not want new housing," Steyer stated. "They cannot afford the new residents because the property tax system and state funding formulas penalize them for growth." He argued that the cost of providing services like schools, police, and roads to new developments far outweighs the revenue those homes generate under Proposition 13-era rules.

The comment sparked immediate pushback from other candidates on stage, who accused Steyer of oversimplifying a complex issue. Some noted that local opposition to housing often stems from neighborhood groups fighting density, not from city budgets. Others pointed to the state's massive homelessness crisis as evidence that more housing is desperately needed, regardless of fiscal challenges.

Steyer, however, doubled down. He proposed a major overhaul of how the state distributes tax revenue to cities, arguing that only by making growth financially attractive will local leaders stop blocking new apartments and condos. With California facing a shortage of millions of homes, the debate highlighted a rarely discussed barrier: the simple economics of saying yes to new neighbors.