Billionaire Tom Steyer Running for California Governor Says Cities There ‘Do Not Want New Housing’

Billionaire Tom Steyer, one of the top contenders for governor of California, argued that the state’s leading challenge is its lack of housing affordability, blaming local resistance to new development.

Steyer made his remarks during Tuesday night’s televised gubernatorial debate that saw seven candidates seeking to replace outgoing Gov. Gavin Newsom—five Democrats and two Republicans—clash over topics ranging from housing to taxes and healthcare. 

Steyer, 68, a Democrat who made his $2.4 billion fortune running the hedge fund Farallon Capital for 26 years, proclaimed during the two-hour debate airing on CNN that California’s No. 1 problem is that “Californians can’t afford to live here.”

According to Steyer, while issues such as easing permitting, reforming zoning rules, building more homes off-site to reduce construction costs, and increasing density around transportation hubs are all important, the key is overcoming municipal opposition to housing expansion.

“The cities and counties of this state do not want new housing, because new housing brings in people, and they can’t afford to pay the health and education costs,” Steyer said. “They will welcome housing if they can afford to take care of the people.”

The businessman and environmental activist, who unsuccessfully ran for president in 2020, proposed to tackle this challenge by closing tax loopholes for corporations to help generate more revenue.

While San Jose Mayor Matt Mahan, a fellow Democrat, argued that this approach would raise taxes on small businesses and ultimately make the cost of living even higher, Steyer stressed that his plan includes an exemption for small businesses.

Candidates spar over housing

Turning to his mayoral record, Mahan said he removed barriers to building thousands of housing units in San Jose, California’s third-largest city, and championed the building of accessory dwelling units for multigenerational living.

“I’m the only candidate on the stage who has actually taken on the bureaucracy, the red tape, reduced fees and permitting times, and delivered housing for working people,” said Mahan.

Former Los Angeles Mayor Antonio Villaraigosa, a Democrat, pushed back against Mahan’s claim, contending that he built more market-rate, affordable workforce, and homeless housing during his eight years in office at the height of the Great Recession than any of the other candidates.

Meanwhile, Steve Hilton, a Republican former Fox News commentator endorsed by President Donald Trump, highlighted the need to cut through red tape hindering residential construction.

“No. 1, we have to get rid of the regulations that make it two or three times as expensive to build the exact same home in California as in neighboring states,” said Hilton.

The GOP candidate, who is one of the front-runners in the crowded race, also touted the plank in his platform that focuses on building single-family homes, including starter homes geared toward young buyers, rather than foisting multifamily developments on communities.

“We have to stop trying to force housing into suburban neighborhoods where people don’t want it. Instead, we have to build single-family homes in the places in our state that do want to expand,” said Hilton.

California’s housing crisis

California, America’s most populous state, which is home to more than 40 million people, faces a severe housing shortage made worse by the 2025 wildfires that destroyed an estimated 16,000 properties. 

The rebuilding process has been widely criticized and has become a political lightning rod, with former reality TV star Spencer Pratt, who is running for mayor of Los Angeles as a Republican, emerging as a vocal critic of California’s Democratic leaders.

To address the crisis, the state needs to build between 180,000 and 315,000 new homes each year to keep up with demand, according to the California Department of Housing and Community Development.

The state has set a goal to build an additional 2.5 million homes over the next eight years, yet the construction pace continues to lag.

In November, California earned an F grade on the Realtor.com® State-by-State Housing Report Card, with the worst permits-to-population ratio. In 2024, the Golden State accounted for 6.8% of all residential permits, despite having 11.7% of the total population.

During his two terms in office, Newsom made housing reform a cornerstone of his administration. In 2025, he signed two bills overhauling key elements of the California Environmental Quality Act to clear bottlenecks that have delayed building projects.

Newsom is ineligible to run for a third term, leaving a wide-open race for his replacement. Joining Steyer, Mahan, Hilton, and Villaraigosa on the ballot are Riverside County Sheriff Chad Bianco, a Republican, and two prominent Democrats, former state Attorney General Xavier Becerra and former U.S. Rep. Katie Porter.

In California, all candidates are listed on one ballot, and only the top two who get the most votes in next month’s primary—regardless of party—move on to the general election on Nov. 3.

A new Evitarus poll published on Monday by the California Democratic Party found that Hilton and Becerra are neck and neck with 18% of likely voter support, followed by Bianco with 14%, and Steyer with 12%. 

Republicans have not secured a statewide victory in California since Arnold Schwarzenegger was reelected governor in 2006.