Newsom spotlights housing costs, homelessness and wildfire recovery in 2026 State of the State

SACRAMENTO, Calif. — Gov. Gavin Newsom used his 2026 State of the State address to put affordability, led by housing costs, at the center of his final-year agenda, calling it California’s “original sin” and urging more work to lower the cost of construction. He also singled out what he called institutional investors “snatching up homes,” saying the state should “tackle that issue” through oversight and enforcement and potentially changes to the state tax code, a preview of one of the address’ most politically charged fights.

On homelessness and mental health, Newsom pointed to programs that convert properties into long-term housing and said early data showed California’s unsheltered homeless population fell 9% in 2025, including a 34.8% drop in Contra Costa County. He said the state will implement the next phase of Proposition 1 on July 1, redirecting $1 billion a year for housing and treatment, and told counties: “No more excuses.”

Newsom leaned on wildfire recovery and insurance pressures, proposing a new rebuilding fund to close the gap between insurance payouts and rebuilding costs and pointing to rebuilding struggles after the Paradise fire. He also criticized President Donald Trump, saying the president has refused to send a $33.9 billion disaster recovery request to Congress. He also highlighted steps tied to utility bills and health costs, including “close to $60 billion” in energy-bill rebates through the cap-and-invest extension and an $11 CalRx insulin pen he said is now available to Californians.

On other statewide priorities , some of them contentious, Newsom touted progress on high-speed rail and projects including Sites Reservoir, and argued recent public safety investments have driven crime down, citing deployments that included Stockton and declines in homicide rates in Oakland and San Francisco.

Watch the full 2026 California State of the State here