CRE Groups Hope Newsom Will Renew Focus On Housing Production After Failed Recall

After months of buildup and an estimated $276M in taxpayer money spent, Gov. Gavin Newsom handily defeated the effort to recall him, with national television networks calling the race in his favor less than an hour after polls closed at 8 p.m. PT, the Los Angeles Times reported.

Commercial real estate investors, developers and brokers contributed $3.3M to campaigns toward helping Newsom stay in office — far more than the $1.1M CRE contributed to seven of Newsom’s Republican opponents, The Real Deal reported in July.  

Commercial real estate industry groups didn't seem surprised by the results of the election and were eager to see Newsom refocus on policy issues that affect the industry, especially as it relates to housing. 

California Building Industry Association President and CEO Dan Dunmoyer said that many of the same issues that dogged Newsom before the recall will remain at the forefront for the rest of his term. The price of housing has skyrocketed, the cost of delivering all types of construction continues to rise and the issue of homelessness remains a major concern for many Californians. 

“These issues are not going to go away,” Dunmoyer said. “There’s going to be continued pressure on him." 

California Business Properties Association President Rex Hime said the unsuccessful recall isn’t likely to push Newsom to take a different tack on issues that matter to the industry. Hime said it will be a vindication for staying the course in many cases — for instance, with regard to coronavirus restrictions.

Those restrictions were very much at the center of a lot of the discussion around the recall from Newsom’s opponents, but the failure of the recall seems to indicate that more people supported them than didn’t. Candidate Larry Elder, the most popular of the more than 40 names on the ballot to replace Newsom, was outspoken about what he called draconian measures put in place by Newsom in an effort to stem the spread of the coronavirus and voiced staunch opposition to vaccine and mask mandates, the Los Angeles Times reported.

Hime echoed that nothing has really changed about what challenges Newsom faces now except that this recall is behind him. Issues of water, housing and homelessness are so critical to CRE, Hime said, and those issues remain. Now there is just less time to deal with them. 

“I don’t know how in the last year of an administration a governor can change all that, but I think he is someone who wants to see change,” Hime said, referring to the fact that the regular election for California's next governor was already scheduled for November 2022. 

Dunmoyer also said the recall has overshadowed some of the efforts Newsom already made. One thing included in Newsom’s budget, he said, was “a decent amount” of funding for the California Department of Housing and Community Development to have the tools to hold local governments accountable for meeting housing needs.

“That could really change things,” Dunmoyer said. “That could prove very helpful in moving [projects] forward.”  

The community group Alliance of Californians for Community Empowerment is also hoping for movement on housing from Newsom but from a different angle. The organization said in a statement that it wants Newsom to extend the state’s eviction moratorium, which is scheduled to expire at the end of September.

“We showed up for the governor and now he needs to show up for us,” Los Angeles-based ACCE member and tenant Kelli Lloyd said in a statement. "We are calling on Gov. Newsom to extend the eviction moratorium beyond Sept. 30 until the millions of dollars in rent relief have been distributed."

Now that the distraction of a recall is over, Newsom can refocus on core policy issues, including housing and homelessness, Dunmoyer said. 

“If he starts to use his bully pulpit not to defend his existence but to defend his agenda, that is what can make a difference in moving the housing issue forward,” Dunmoyer said.