Mar 29, 2026
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.
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.
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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.
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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.
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.
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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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What happens next
California is essentially daring its remaining holdout communities to keep saying no — and backing it up with lawsuits. Some are already caving: Kings County submitted revised plans within days of the announcement, and Lemoore broke away from a joint planning effort to fast-track its own compliance.
Others, like Turlock, are pushing back — its mayor accused the state of issuing the warning days after telling the city it had no further feedback.
For the rest of the country watching its own housing costs climb, the 30-day clock is ticking. Other states are watching.
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)
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Rudro is an Editor with Moneywise. His work has appeared on Yahoo Finance, MSN Money and The Financial Post. He previously served as Managing Editor of Oola, and as the Content Lead of Tickld before that. Rudro holds a Bachelor of Science in Psychology from the University of Toronto.
