Newsom vetoes housing element reform bill

That’s because many smaller cities are making significant efforts — at significant expense — to get housing elements approved, but struggle with sometimes-nebulous standards or unclear processes, Papan said.

“Cities [are] working very hard, spending millions on consultants to comply with the housing element requirements, and not getting specific feedback to ultimately finish the housing element and move on to actually doing something about housing,” she said.

Some housing advocates have pushed back on this narrative, arguing that cities intentionally subvert the housing element process to avoid building new housing.

In his veto message, Newsom primarily expressed concern around the cost of implementing the legislation — around $11 million — in a move that he said would unduly burden HCD with responsibilities that should be taken up by local governments.

“While HCD provides technical assistance when requested and in response to inadequate housing elements, that support is no substitute to the local government’s fundamental responsibility to plan for its share of housing needs,” the veto message read.

Papan disagreed with the sentiment behind the veto and maintained that the issues localities often have with the housing element process still require a solution. When the housing element process becomes more tenable for local cities, more housing will be built, she said.

“The need for the bill has not gone away with the veto, and it’s incredibly, incredibly important. This was a bipartisan bill that localities up and down the state were in support of,” she said. “We’ve got to work to change the dynamic. It’s doing nothing but just costing people money and not moving the needle.”

Another piece of Papan legislation on a separate hot-button issue — the amount of water that large-scale data centers require to run — was also vetoed by Newsom.

Assembly Bill 93 would have required data center owners to disclose expected water use when applying for a business license.

Data center facilities can use hundreds of gallons to millions of gallons of water a day, a massive range that depends on their function. Artificial intelligence-powering data centers, in particular, have recently generated controversy for the amount of water they require to run.

The policy would have struck a balanced tone, Papan said — not limiting the development of data centers, but asking for transparent information so that legislators, consumers and residents could weigh the pros and cons of water use.

“It was simply a disclosure bill that would allow for planning, because you have to kind of reach a balance between innovation and sustainability,” she said. “I really thought with respect to disclosure, that kind of would allow us to do that, to figure out what the trade-offs are.”

In his veto message, Newsom cited California’s position as a global epicenter of technology and said the state was well-suited to support the increasing need for new data centers as AI continues to develop.

“While I appreciate the author’s intent, I am reluctant to impose rigid reporting requirements about operational details on this sector without understanding the full impact on businesses and consumers of their technology,” the message read.

Papan pushed back, however, and said she “respectfully disagreed” with the idea that asking for reportable information negatively affects operations.

“I don’t think transparency poses a burden on or restricts, in any way, operations,” she said. “It doesn’t impose water caps. It didn’t create costly compliance hurdles. It just simply required data centers to disclose how much water they use.”

Despite the vetoes, Papan said she will continue to collaborate with the governor’s office and her fellow legislators to work on both topics in the future.

“We’re going to continue to fight the good fight,” she said.