California Democrats stage internal war over Gavin Newsom's late push to build more housing

Politico

3 hours ago

SACRAMENTO, California — Gavin Newsom thought he could push an ambitious housing proposal through California's Democratic-controlled Legislature. Instead, he ran into a wall of resistance from should-be allies angrily comparing his plans to Jim Crow, slavery and immigration raids.
Hours of explosive state budget hearings on Wednesday revealed deepening rifts within the Legislature's Democratic supermajority over how to ease California's prohibitively high cost of living. Labor advocates determined to sink one of Newsom's proposals over wage standards for construction workers filled a hearing room at the state Capitol mocking, yelling, and storming out at points while lawmakers went over the details of Newsom's plan to address the state's affordability crisis and sew up a $12 billion budget deficit.
Lawmakers for months have been bracing for a fight with Newsom over his proposed cuts to safety net programs in the state budget. Instead, Democrats are throwing up heavy resistance to his last-minute stand on housing development — a proposal that has drawn outrage from labor and environmental groups in heavily-Democratic California.
'Anyone who believed this would not cause a giant explosion — they were living in la-la-land,' said Todd David, a San Francisco political consultant who has worked for state Sen. Scott Wiener and housing-focused groups.
For Newsom, a potential 2028 presidential contender, it was a striking show of resistance from a flank of his own party over housing. A priority of the Democratic governor, Newsom had put his political capital behind an attempt to strong-arm the Legislature by making the entire state budget contingent on passing a bill to speed housing development by relaxing environmental protection rules.
A spokesperson for Newsom pointed to a statement Tuesday night emphasizing partnership with lawmakers in reaching a budget deal while noting that 'it is contingent on finalizing legislation to cut red tape and unleash housing and infrastructure development across the state — to build more, faster.'
The fault lines on display this week run deep. Construction unions and the statewide California Labor Federation have long resisted housing bills they see as eroding wage standards, often packing hearing rooms with members who urge lawmakers to vote no. Democrats have at times decried their union allies' hardball tactics.
But Newsom's unprecedented intervention — and the forceful response from union foes — pushed the conflict into a whole new realm.
'To have legislation that is this large and this significant be forced through at the 11th hour … seems pretty absurd to me,' Democratic state Sen. Sasha Renée Pérez said at the hearing. 'I just cannot begin to explain how incredibly inappropriate and hurtful this is.'
Scott Wetch, a lobbyist representing the trade unions, contended that this could be the first time since the Jim Crow era that California is 'contemplating a law to suppress wages.' Pérez, who represents a Los Angeles district, said the proposal was 'incredibly insensitive' amid immigration raids targeting mostly 'blue-collar workers who are Latino.' And Kevin Ferreira, executive director of the Sacramento-Sierra's Building and Construction Trades Council, told lawmakers the bill 'will compel our workers to be shackled and start singing chain gang songs.'
In a sign of the stakes, the fight quickly spilled beyond California as North America's Building Trades Unions — an umbrella group covering millions of workers across the United States in Canada that rarely intercedes in state politics — sent Newsom a blistering letter warning the bill would 'create a race to the bottom.'
Environmental groups piled on late Wednesday, with around 60 of them, including the Sierra Club and Earthjustice, blasting the proposal in a letter as a 'backroom Budget Trailer Bill deal that would kill community and environmental protections, even as the people of California are faced with unprecedented federal attacks to their lives and livelihoods.'
Unions warned the governor was betraying his Democratic base. Gretchen Newsom, a representative of the International Brotherhood of Electrical Workers, said Newsom's stance was baffling to people 'looking at the Democratic Party and wondering what comes next for the governor.'
'I see this as a complete debacle and devastating to workers all across California,' said Newsom, who is not related to the governor.
Labor leaders were once again at one another's throats, with many opponents faulting carpenters' unions who have backed streamlining efforts. Danny Curtin, director of the California Conference of Carpenters, said the scale of housing woes in California, where the price for the median home now tops $900,000, demanded an aggressive solution.
'The housing crisis is the most politically, socially, economically destabilizing crisis in California,' Curtin said. 'I would give the governor credit for trying to cut through another year of arguing.'
In the broader budget negotiations, Newsom had largely capitulated to pushback from lawmakers over the steepest cuts he had proposed making to the state's Medicaid program, particularly for undocumented immigrants. Now, he is putting his political capital behind affordability proposals.
But in a sign that Newsom's influence may be waning, lawmakers on Wednesday delayed a vote over wage provisions tucked into a separate budget bill. The proposal would allow developers to set a minimum wage standard for construction workers on certain affordable housing projects that could be lower than what union workers currently command.
'It's not a simple thing around the edges,' said state Sen. Maria Elena Durazo, a Los Angeles Democrat. 'It is a massive change. It challenges the role of collective bargaining in this state that has never been done before.'
Wiener, a state budget negotiator who for years has fought to remove obstacles to denser housing development in California, defended the proposal at the hearing as setting a 'floor, not a ceiling' for wages. But he admitted that the swift and ferocious opposition led him to delay the vote.
'It's always appropriate for people to say, 'This needs to be changed, that needs to be changed. This wage is too low, that wage is too low,' Wiener said. 'That's always appropriate.'
The governor was markedly less aggressive this year in his efforts to wring a budget deal out of lawmakers. Newsom did not attend caucus meetings in person to make his case for the housing legislation, as he has with previous proposals, although he has been in touch with some lawmakers via text message.
Some of that was a matter of timing: Newsom has been preoccupied by the White House launching sweeping immigration raids and then deploying federal troops to Los Angeles, fomenting a standoff that overlapped with budget negotiations.
Corey Jackson, a Democrat from Southern California who chairs an Assembly budget committee on human services, said that while he wasn't privy to Newsom's involvement in discussions, California needs a governor who is '24/7 going to be focused' on the state.
'Because our issues are that complicated,' Jackson said. 'And the number of crises that come up in California, as you've seen, will continue to happen every year.'