California’s Affordability Crisis: Gavin Newsom’s “Gift” to the State Could Soon Be His Gift to the Nation

As the governor blames national politics for soaring prices, Californians live with the consequences of the policies he chose to make more extreme…

[This is the first of a two part series. Below we focus on how much less affordable life is for Californians than for others in the lower 48 — and it’s not a pretty picture. In part two we will go over the specific policies put in place or kept in place by Gavin Newsom, that make him the “least affordable” candidate ever to run for President. Our morning columns are free for all subscribers!]

On Gavin Newsom’s Watch, the Cost of Being a Californian Has Exploded

Governor Gavin Newsom wants voters to believe that California’s affordability crisis is simply the result of national politics and global inflation. In recent remarks, he has pointed fingers at Donald Trump and national Republicans to explain why so many Californians are struggling to make ends meet.

That claim falls apart the moment you look at the numbers.

According to the U.S. Bureau of Labor Statistics, California’s Consumer Price Index is up a little over 20 percent since 2019, the year Newsom took office. Inflation has been national. But Californians were already paying among the highest baseline prices in the country before he became governor.

The sharpest spikes in California’s affordability crisis have come on Gavin Newsom’s watch.

For voters anywhere in the country watching his national political ascent, his handling of affordability in California is not a footnote. It is the résumé.

The Newsom Scorecard: What Changed Since 2019

Housing is the most straightforward way to see what his tenure has meant for ordinary Californians. According to California’s nonpartisan Legislative Analyst’s Office, the monthly cost to carry a typical mid-tier home is now over $5,500 — roughly 75 to 80 percent higher than it was at the start of 2020. Even bottom-tier homes now require monthly payments well above $3,000. The income needed to buy even a modest starter home now exceeds the statewide median household income.

CalMatters reports that California’s median home price now runs more than twice the national median.

The Cost Stack Californians Cannot Escape

Electric bills tell a similar story. Federal Energy Information Administration data show that residential electricity in California now averages about 32 cents per kilowatt-hour, compared with about 18 cents nationally — roughly 80 percent higher. In PG&E territory, average residential rates have risen from about 25 cents per kilowatt-hour in 2019 to approximately 45 cents today, a near-80 percent increase.

At the pump, Californians continue to pay the highest gas prices in the nation. AAA currently shows California’s average price for regular gasoline at about $4.50 per gallon, versus just under $3.00 nationwide — a premium of roughly $1.50 per gallon every time drivers fill up.

Insurance has quietly turned into one of the fastest-rising household bills. A Wall Street Journal analysis of national rate trends found that homeowners’ premiums have risen by 50 to 75 percent since 2020, with auto insurance up roughly a third or more, and that California is among the hardest-hit markets. Major carriers are pulling back from the state, forcing many homeowners into the costly state-run FAIR Plan.

These changes are not distant history. The steepest climb in each of these essential costs has occurred under the governor now presenting himself as a national problem-solver.

Housing: The Centerpiece of California’s Affordability Collapse

Nothing shows the collapse of affordability under Gavin Newsom more clearly than housing. A median home in California now costs more than twice the national average. Millions of middle-class families now feel locked out of homeownership altogether.

In 2020, a household needed roughly $150,000 in annual income to afford a mid-tier California home. Today, that threshold is closer to $250,000. Monthly payments for newly purchased homes routinely exceed $5,500.

The median rent in California is now a little over $2,200 per month, roughly 50 percent higher than the national median. Multiple California metro areas rank among the most expensive rental markets in the United States.

Under Newsom’s leadership, housing did not merely remain expensive; it became even more costly. It crossed from unaffordable into unreachable for vast portions of the middle class.

Energy: Paying a Utility Tax the Rest of America Does Not

Californians pay an extra, built-in premium every time they turn on the lights. According to the U.S. Energy Information Administration, residential electricity in California now costs about 80 percent more than it does in the average American state.

For many single-family households in PG&E, Southern California Edison, and San Diego Gas & Electric territory, combined electricity and gas bills in the range of $300 to $600 per month are not unusual, especially during high-usage months. These costs are not a one-off spike. They have become a permanent part of life in Newsom’s California.

The same pattern holds at the gas station. California motorists routinely pay far more per gallon than drivers elsewhere in the country, and experience national energy volatility more severely than almost anyone else in America.

These energy premiums were already high when Newsom took office. Under his leadership, they intensified.

Insurance: The Hidden Affordability Crisis

Insurance now ranks among the fastest-rising household expenses in California.

Auto insurance premiums have surged over the past two years following years of regulatory suppression. Homeowners insurance is undergoing even more violent upheaval. As wildfire risk escalates and private insurers retreat, thousands of homeowners are being forced into the state’s expensive insurer of last resort.

These bills show up every month, unavoidable and growing — another line item in the cost of living under Newsom.

Everyday California: Paying More for the Same Basics

The extra cost of living in California doesn’t stop with housing and utilities. Cost-of-living indices consistently show that groceries alone run about 10 to 15 percent more in California than the national average, with similar premiums for healthcare services, transportation, and everyday consumer goods. Food prices themselves are roughly 30 percent higher than they were in 2019.

So Californians are not dealing with just one affordability problem. They face many layers, piled on top of one another — at the pharmacy, the grocery store, the utility counter, and the insurance office.

And none of these pressures eased under this governor. They compounded.

The National Relevance of California’s Price Tag

This manufactured affordability crisis matters far beyond Sacramento.

Governor Gavin Newsom is no longer just running California. He is clearly positioning himself as a future presidential contender. The record he brings with him is not theoretical. It is measurable.

It is printed on millions of mortgage statements, rent checks, utility bills, insurance invoices, and gas receipts.

One recent cost-of-living study found that a typical upper-middle-income California family now pays about $30,000 more per year than a similar family elsewhere in the United States, after factoring in housing, utilities, healthcare, taxes, and other basics.

California didn’t become expensive overnight. But under Newsom, the slide has sped up dramatically.

So, Does It Matter?

This matters because affordability is not an abstract policy debate. It is the difference between owning and renting, between saving and borrowing, between upward mobility and permanent financial pressure.

Voters across the country are right to ask what kind of president Gavin Newsom would be. California already provides the most straightforward answer. The expensive kind.

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Now You Read The Rest of the Story - Part II

In Part Two, we examine the policies that built this expensive machinery — how energy mandates, housing regulations, fuel rules, and regulatory stacking, all embraced by Governor Newsom, have produced the nation’s most punishing affordability environment.