Steyer kicks off bus tour in Redwood City: Democratic gubernatorial candidate talks housing, affordability and environment with city, county leaders

In previous interviews and debates across countless platforms, each candidate has announced plans to tackle the major issues most Californians face, most of which are familiar to county residents, including housing and affordability.

On Friday, Steyer walked around downtown Redwood City with residents and city leaders, discussing a range of topics, including residential and commercial development.

To boost housing production and improve affordability, Steyer has pushed for heavier investment in factory-built housing to slash construction timelines and costs, as well as reduce developer impact fees that local cities impose on new projects — among other proposed solutions.

Despite the potential cost savings, there haven’t been a lot of successful examples of factory built, or prefabricated, developments in San Mateo County. Several venture-backed prefab firms, including Silver Creek — which built Redwood City’s Navigation Center — have shuttered within just a few years of opening, and some market-rate developers have said the labor and shipping cost reductions with prefab aren’t enough to fully embrace it.

“The reason this is cheaper is because it’s done continuously, it’s very replaceable and it drives down costs,” Steyer said. “For that to happen, they need to have consistent orders, and the state needs to make sure that happens.”

He’s also been in favor of split roll reform, or fixing what he calls a corporate real estate tax loophole, a part of Proposition 13 that would keep residential property tax caps as is but reassess commercial properties closer to current market value. If successful, the funds from that fix alone would “way more than backfill” cities’ revenue loss from impact fees, he said. A split roll-related ballot measure, Proposition 15, failed by nearly 52% in 2020.

“Because we’re talking about closing that corporate real estate tax loophole, that money is going to go to cities and counties,” he said.

For city leaders like South San Francisco Councilmember James Coleman, the proposal represents a creative solution to a longstanding issue, especially as local cities are increasingly strapped for revenue.

“It would mean millions and millions of dollars to our schools and cities,” he said.

While Steyer has also advocated for cutting developer impact fees — a significant source of revenue for local jurisdictions — Coleman said the funds from the split roll reform would be more a consistent, predictable source of revenue anyway, rather than fees only collected when a new project is submitted, something that is heavily subject to economic fluctuations.

Steyer is not the only candidate championing lower fees and less red tape to make development less expensive and time-intensive. Many other candidates are also pushing for more streamlined construction, with quicker permitting turnaround times and lower fees, and in many cases, accelerating factory-built housing.

But not everyone agrees with Steyer’s approach of backfilling impact fee revenue with the Proposition 13 change. Republican candidate Steve Hilton, a San Mateo County resident, agrees there needs to be less red tape and lower impact fees but says cities and the state need less, not more, tax revenue, and has called for capping impact fees at 3% of total construction costs.

“The idea that taxes should be increased even further and put even more into the bottomless money pit of failure that we’ve seen — where we pay the highest taxes for the worst result — is a joke,” Hilton said.

He added that lawsuits arising from the California Environmental Quality Act, labor unions — which drive up construction costs — and dubious climate policies have been the main culprits in creating unaffordable housing costs. Incentivizing single-family home development at the state level can also help counties like San Mateo move away from building mostly apartment buildings and creating more starter homes, he added.

Other candidates did not comment or respond to requests for comment in time for publication.

Hilton’s perspective on climate and environmental policy is also vastly different from Steyer, who frequently touts his belief that oil companies should be on the hook for the damage they cause to the environment and impacted communities. The leading Republican candidate, by contrast, has said he’d push for increasing oil production capacity.

Steyer’s focus on climate change and environmental sustainability is appealing to city leaders like Foster City Councilmember Phoebe Venkat, who represents a city that, in the last couple years, has completely revamped its levee to protect against rising sea levels.

“Tom speaks to me because of the policy ideas he has around the climate, and he supports the billionaire tax, so those are things I find appealing,” she said, referring to the proposed tax that would impose additional, one-time 5% wealth tax on billionaires.

The primary election will be held on June 2, with the top two candidates advancing to the general election in November.