Gavin Newsom enters his final year as California governor this week with key campaign promises on housing, homelessness, and health care largely unmet, as he prepares to address the Legislature and present a budget proposal while confronting an estimated $18 billion deficit. Newsom, widely expected to pursue a Democratic presidential primary campaign after his term ends, is scheduled to deliver a State of the State address Thursday.
The governor has spent seven years pushing an ambitious agenda — pledging to build 3.5 million new homes, establish a single-payer health care system, and dramatically curb homelessness — but has fallen short on each, even as he leaves a mark on state government through new programs and expanded services.
Democratic political consultant Kelly Calkin told CalMatters that voters nationally are focused on affordability, and that Newsom’s agenda will be shaped by that pressure.
“This really is a pivotal year for him,” Calkin said. “What do voters in the rest of the country want to see? They’re feeling the pinch of affordability. … He’s probably going to look through that lens on what helps shape his agenda for the next year.”
Housing: The central measure
Housing is perhaps the most visible benchmark of Newsom’s tenure. About 40% of California households are burdened by their rent or mortgage, according to census data cited by CalMatters — a policymaker benchmark meaning housing consumes more than a third of income.
Newsom ran for governor in 2018 saying it was “achievable” for California to build 3.5 million new homes by 2025. In 2024, the state added just under 120,000 new units, about a fifth of the annual rate needed to meet that goal, according to CalMatters. In recent media appearances, the governor has characterized his original figure as a “stretch goal.”
Ray Pearl, executive director of the California Housing Consortium, said Newsom has still accomplished more on housing than any predecessor, citing the governor’s move to quintuple the state’s tax credit for low-income housing construction and his backing of laws that relaxed rules on where housing can be built.
“You can’t solve a systemic problem overnight or even in seven years, but what you can do is change the trajectory of the issue,” Pearl said.
Last month, Newsom expressed interest in modular housing — homes assembled in factories and shipped to sites for installation — as an alternative construction approach. Speaking on The Ezra Klein Show, he described it as a focus for his final year in office.
“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,” Newsom said.
An Assembly committee chaired by Democratic Oakland Assemblymember Buffy Wicks is set to take up the issue this year, according to CalMatters.
Health care rollbacks draw advocate concern
Newsom campaigned on a single-payer public health care system, then pivoted to what his administration termed “universal coverage,” expanding Medi-Cal eligibility to low-income immigrants. More than 90% of Californians were insured when he took office; those expansions pushed coverage to nearly all residents by 2023, CalMatters reported.
Facing a $12 billion deficit last year, however, Newsom rolled back the program’s most recent expansion. A freeze on new Medi-Cal enrollment for working-age adult immigrants who entered the country without authorization took effect Jan. 1. Later this year, adult immigrants in that category are set to lose Medi-Cal dental coverage, and most will face monthly premiums next year that advocates say are expected to force some off coverage.
Amanda McAllister-Wallner, executive director of Health Access California, said she fears further cuts ahead.
“The hope was that the Health for All expansion would be considered the baseline, that that would be something we budget for long term because it’s just something that’s part of who we are as a state,” McAllister-Wallner said. “Health care has been an area where the governor has really made a name for himself in a way that I think he can and should be very proud of, and to see … a backing-off of those commitments would be the biggest disappointment for me.”
The agency overseeing the state’s safety-net services accounts for nearly 40% of California’s general fund spending, and many of its programs are projected to lose significant federal funding through President Donald Trump’s tax and spending legislation, according to CalMatters.
Other unmet commitments
Homelessness has worsened during Newsom’s tenure despite more than $24 billion his administration has spent addressing it, CalMatters reported. He also pledged in 2021 to add 200,000 subsidized child care slots by this year; that plan has been delayed two years and remains tens of thousands of slots short, the publication reported.
Former Assembly Speaker Anthony Rendon, who led the chamber during Newsom’s first five years in office, said the breadth of the governor’s agenda nonetheless changed the state’s direction, drawing a contrast with his predecessor Jerry Brown’s focus on fiscal restraint.
“In retrospect, it never seems like enough,” Rendon said.
Newsom’s spokesperson, Izzy Gardon, declined interview requests about the governor’s policy goals for the year, telling CalMatters only to “stay tuned.”
Reporting by Jeanne Kuang of CalMatters, distributed through the Associated Press.