Look, I want to walk you through what CalMatters Housing is reporting about the mood here in California right now, because it matters for how we're thinking about the market and our communities. According to their reporting, Californians are pretty frustrated these days. The economy has basically stalled out since the pandemic ended, with tech and other major industries cutting jobs left and right. Meanwhile, our cost of living, especially housing and utilities, has shot up dramatically over the past couple of decades, while people's actual paychecks adjusted for inflation have actually gone backward since 2020.
A recent poll from the Public Policy Institute of California captured this frustration pretty clearly. The data showed that a solid majority of adults and likely voters believe the state is heading in the wrong direction. Even more striking, about seven in ten Californians expect the economy to get worse over the next year, and that concern cuts across all political parties, though Republicans are especially pessimistic.
Now here's where it gets interesting. You might think that if people are this unhappy, they'd vote for major change and new leadership. But according to CalMatters, that's not what's happening. The Democratic Party, which has controlled state politics for the last thirty years, is positioned to maintain or even strengthen its grip on power. Democratic candidates are polling well for statewide offices, and the party is expected to keep its supermajorities in the legislature and possibly gain some congressional seats.
One factor helping Democrats hold on is that Republicans are dealing with lower voter registration statewide and voter disapproval of President Trump. CalMatters notes that less than a third of California voters approve of Trump's job performance, which is weighing on Republican candidates across the board. The real interesting races this cycle are a close Los Angeles mayoral contest and some Democrat-versus-Democrat battles in congressional districts, plus several ballot measures about taxes that are generating serious debate.
The biggest wildcard is Proposition 40, a ballot measure that would impose a one-time wealth tax on California's billionaires to fund healthcare. According to CalMatters, this measure was polling ahead for a while but is losing ground as billionaires spend hundreds of millions opposing it. The outcome is genuinely uncertain, and even if it passes, two other ballot measures could undermine it.
What I'm seeing locally in the Bay Area and East Bay is that people are feeling the squeeze that CalMatters is documenting statewide. Housing costs remain the elephant in the room for my clients, and that frustration is real. But interestingly, at the ballot box and in local politics, people aren't necessarily punishing incumbents or voting for dramatic shifts. That tells me folks want change but maybe aren't convinced about who or what could deliver it better. For those of us in real estate, this suggests the political landscape may not shift dramatically, which means policy on housing, taxes, and development is likely to stay pretty consistent for the next couple of years.
