When I talk to people about you as a

leader of the Democratic party and

you're a leading voice, let's do call it

that for the moment.

>> For the moment, you what are you

suggesting? It won't be for long. I read

between the lines.

>> I'm not going to ask you seven different

ways of your run into 2028.

>> God bless you. Yeah.

>> Uh what I am going to ask you is this.

>> The big political issue of the day is

affordability.

>> Period.

>> California on US News and World Report

on Wallet Hub. Look at all these

different rankings. that ranks 50th on

affordability. These measures combine

housing costs and other measures of cost

of living.

>> Why? And what is the affordability

agenda that is credible coming from the

governor of California?

>> It's interesting. You wal also talks

about the happiest city index five of

the top 10.

>> Listen, man. I got tattoos and I got I

got redwoods tattooed on my arm. I

grieve every day I'm not in California.

You don't need to tell me it's a happy

>> in terms of taxes, which is interesting.

Wallet Hub comes out with their annual

survey on taxes saying we're slightly

above average on taxes. total mythology

there. It's the highest tax rate in the

country, but not the highest taxes

across the board when you add everything

in. That said, the affordability issue

in California is real. It's been the

original sin going back decades and

decades. Housing, period, full stop.

More things in more ways on more days

explains everything. It's the original

sin in California. Nimism. We haven't

gone out our own way. We haven't

produced enough housing stock. It's econ

101. Supply demand. It's not very

complicated. And when I started as

governor, there was no housing agenda.

There was no homeless agenda. Was not

the responsibility role of the state. It

was assigned to cities and counties and

regional COC's. And we changed all that.

In fact, I put a marker down within the

first few days when I got into office by

suing some cities in my state. put 47 on

notice, sued Huntington Beach, have and

have changed radically our approach to

accountability, creating a housing

accountability unit, looked at state

excess land sites, which has unlocked

over 5,000 units, began a process of

working with carrots and sticks to move

from nimism to a yimus mindset, which I

think we have demonstrated in meaningful

ways, and substantive ways. 110,000

housing units were completed last year.

completely

completely underwhelming

and so we have more work to do.

>> Why is it so hard? Because you've wanted

to do this. You put a 3.5 million

housing production goal.

>> It was that was the aspirational goal

and then the the legal goal 2.5 million

by 2030

under our re regional what we call the

arena goals and that is the established

legal fire. And by the way it's first

time we had goal setting that was this.

>> But you're not on track for either goal.

Not well no one is no one is but

>> across the country and that's by the way

that's a macro you got 1.2 2 million.

>> But other places are I mean look I I

spend because I'm a nerd a fair amount

of time looking at statistics on housing

starts in

>> Houston

having now a big downturn in terms of of

of costs because of some of the

overbuilding. But it's interesting.

>> Listen I think of California having a

big downturn in rents because over I I

[laughter] would I think that would be a

welcome change of problem.

>> I get it. But no genuinely serious. I've

seen how many bills you've passed. I've

covered a bunch of them.

What makes this so

>> Oh, you got 470 cities. You have 58

counties. I mentioned just the 101

jurisdictions in the cities and counties

just around the Bay Area. I haven't even

gotten to LA County. There's 88 cities,

88 leaders, COC's. I mean, everybody is

participatory in this and and and so

that's the challenge. It's that

labyrinth. By the way, uh these folks

aren't happy. League of Cities not

happy. Our county partners are not

happy. I mean, we are asserting

ourselves in ways that the state has

never asserted ourselves into local

planning decisions in order to break

down those barriers. And we've been

breaking down those barriers. What we

need is to break down the costs of

borrowing. It's the last piece that's

missing right now. I think we have

shifted the dialogue. We have won the

debate. We're on the other side of this.

And the proof point will be when we see

the borrowing costs red. So I think you

can think about what it takes to build

housing as having three buckets. One is

land use, zoning, permitting, etc. The

the sort of legal traps you have to run

in order to get started.

>> Y

>> then there's financing of construction,

interest rates, things like that.

>> And cost of construction, which is

related, but but has to do with the cost

of materials, labor, all the rest of it.

And as you say, I think in in a lot of

blue states, the fight on land use and

zoning is intellectually won. Whether or

not it's been totally policy one, that's

harder. But I do think that's one.

The financing

and the cost of construction, which by

the way, with Trump's tariffs and

deportations is getting worse on a bunch

of levels.

>> Tell me about those because I actually

think those are harder to talk about.

Well, and you didn't even bring up

productivity, which is down about 30%

since 1970 to 2020 in the housing

sector.

>> In the housing sector and and let's

establish situationally the tariffs

environment has impacted the cost of

goods. So, material supplies has gone

up. He's made it worse. Donald Trump,

the labor shortages are real. Today,

there was a Wall Street Journal article

showing 300 or 400 plus thousand uh uh

construction worker shortage and they

can't even get enough data center

workers uh to address some of the energy

needs for AI, etc. and that's been

exacerbated by the mass deportation

efforts etc. So those two things are

important but issue of productivity goes

to deeper questions now around can we

look at new styles of construction. Are

we going to promote at scale modular

housing prefab housing

>> is offsite you're building houses like

you would build a car and then

assembling them on site

>> and and it's also 3D printing which is

really interesting. And there's some

interesting companies in can uh in in

Texas. Uh they're actually working with

NASA uh in terms of some opportunities

there in terms of new materials. AI as

it relates to material space is also

interesting in relationship to this

conversation. So look, I do think we're

about to experience a completely

different shift on the productivity side

because of necessity, because of the

reality, because of the crisis of

affordability. And this holds a lot of

promise. It holds a lot of political

peril in the context of the politics

within labor and that has to be

accommodated and dealt with. By the way,

if there's a big preview for California,

my last year, it's in this space

legislatively to take it to the next

level. But we have to accommodate

because there's a lot of unions within

>> I want to slow down what you just said

here because I I know but just for

people who are not as into the modular

housing debate as you as you and I. So

right now building housing is you know

guys show up with hammers

>> same way they have been since the

beginning of time.

>> This is why productivity is down.

>> Yeah.

>> And modular which there's no place in

America that does a ton of off-site

manufactured housing. But in Sweden I

think more than 80% of single family

homes are now off-site modular or

off-site manufactured. [clears throat]

>> You can have modular build as many

places do uh in unionized factories,

>> right? So it doesn't have to be a

non-union industry, but it still means

fewer builders

>> and it means which unions and which

different skills, which trades

>> are part of that. And therein lies this

is the issue we have to address.

>> When you talk about address it, right? I

I think you're pointing towards there

being some

way that it can be addressed. But on

some level uh it will mean fewer people

building on site unless we increase

housing production so much.

>> Yeah, that's we have a volume

>> and that's the and the goal is to do

what we need to do which is the

abundance of gender actually addressing

the demand side of the equation. Uh, so

I think we'll be fine for a decade or

two as we work out of this morass, this

mess we've created, not just in

California, but all across this