By Nils Gilman / CalMatters / July 15, 2025
California has finally made real progress on one of its most stubborn problems: the housing crisis. After decades of paralysis, the state has begun to unwind the bureaucratic thicket that made it almost impossible to build new homes in cities. This should be a moment for cautious optimism.
Yet a new and very different problem looms — one that threatens to undermine these hard-won reforms before a single unit is built: a growing national effort to crack down on the very workers California needs to build its future.
This summer, Gov. Gavin Newsom pushed through a pair of bills — Assembly Bill 130 and Senate Bill 131 — that amount to the most significant overhaul of California’s development rules in more than 50 years. In particular, the reforms are massively curtailing the California Environmental Quality Act, which for decades has allowed opponents to block urban housing with endless lawsuits and reviews.
Urban infill projects near transit are now largely exempt from CEQA litigation. Developers are, for the first time in a generation, preparing to build at scale.
But just as California removes the red tape, it may find itself caught in another bind: a lack of construction workers. And this time, the cause isn’t homegrown.
More than 40% of California’s construction workforce is foreign-born, according to the National Association of Homebuilders. That includes more than half a million immigrants, many of them undocumented, who work as framers, drywallers, roofers and laborers.
These are physically demanding jobs, often shunned by native-born workers. Without them, the math of housing development simply doesn’t work.
Yet the national political winds are blowing in the opposite direction. The Trump-aligned right has completely changed the conversation about immigration. Their focus is on deporting not just criminals, but all undocumented migrants. Mass deportation, as recently as last year considered a fringe idea, is now the openly stated policy objective.
The implications for industries that rely heavily on immigrants are as dire as they are obvious. Heightened enforcement, even without sweeping raids, creates fear and uncertainty. Some workers leave preemptively. Others move into the shadows.
The result? Just as building permits get faster, the labor force that builds will get scarcer. Construction firms already report difficulty assembling full crews. Wages are rising. Projects are being delayed — not by paperwork, but by a shortage of hands.
If this trend continues, California risks an awkward outcome: a flood of new housing approvals but not enough workers to actually build them. The “abundance agenda” could turn into a shelf full of blueprints.
In the worst case, we end up with a hollow boom — developments greenlit but never started, or started but never finished.
As construction lags, pressure will mount on Sacramento to push back against federal immigration policy. California has clashed with Washington before — on climate, guns, and abortion. Housing could be next. Newsom, perhaps eyeing national office, may argue that federal immigration enforcement is sabotaging state-led economic reform.
This will be a high-stakes confrontation. The federal government controls immigration. California controls land use. The two are now on a collision course.
The deeper irony is hard to miss. For years, the consensus was that California’s housing problems were self-inflicted — caused by too much regulation and not enough political courage. Now that the state is finally addressing those issues, it’s being undermined by a different kind of politics: a national campaign against the very people who build homes.
If California wants to realize its new housing vision, it will need not just faster permits but also enough skilled workers to turn blueprints into homes. That means protecting the workforce it has — even when doing so puts it at odds with Washington.
Otherwise, we will be left with the worst of both worlds: new rules, no results and a housing crisis that continues to degrade the quality of life for far too many Californians.
Gilman is the chief operating officer and executive vice president of the Berggruen Institute.
Sorry – not sorry – a lot of poppycock
We do NOT have a housing crisis. We have an AFFORDABLE housing crisis!
Gotta question the premise here: It has not been “almost impossible to build homes in cities” in California, much less is a “bureaucratic thicket” the cause of the affordable housing shortage affecting San Diego and a number of other metro areas in the state that face this problem. CEQA is a problem for developers not because of its unreasonableness but because of their unwillingness to comply with sound environmental protections.
Developers often cite “the math of housing development” as an obstacle because they prefer projects that “pencil out” vastly in their favor so that they can accumulate great wealth. It would be more accurate to blame a greedy expectation of over-the-top profit.
Also, ouch: While we can all agree that immigrant labor is undervalued and that is essential to California’s construction industry, citing the loss of undocumented workers as a cause of rising wages suggests that many developers have been taking advantage of many of those who do “physically demanding jobs, often shunned by native-born workers.” Buying their services on the cheap because they don’t have the right to demand full wages and benefits (including eligibility for social security) sounds like another way that developers enrich themselves at the expense of others in our communities.
Finally, of course, there is the persistent simplistic YIMBY assumption that building more housing units of any kind (including those sold or rented a majority at market or luxury rates) will somehow lead to sufficient appropriate housing that meets the most urgent and common needs.
There are many, many economic and humanitarian reasons to resist current Federal policies and actions concerning both immigration and the treatment of immigrants who already are our fellow residents without buying into all of the false and misleading representations of this argument.