The Case For and Against California Forever

There are valid arguments for both sides

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California Forever will be built from scratch in the future, but somehow will have streets and buildings that look like they were built 100 years ago

California Forever has been all over the news the past few months, but in case you don’t know of it: California Forever is the name of a company, formerly known as Flannery Associates, which secretly acquired 60,000 acres of land in Solano County, Calif., between San Francisco and Sacramento. The company, which is funded by a group of tech billionaires including Laurene Powell Jobs and Reid Hoffman, plans to build a new city there for up to 400,000 people on about 18,000 acres.

In the weeks since California Forever became public, it has become a Rohrshach test for people’s feelings about YIMBYism, billionaires, California’s ultra-expensive real estate, climate change, and more. But it’s getting real: Earlier this week, California Forever began its campaign to put the rezoning of its land on the November ballot as a ballot initiative.

What follows is my best attempt to unpack the arguments for and against California Forever, with my own take at the end. 

The Case for California Forever

California Forever would be designed as a walkable city with dense neighborhoods.

It is really, really expensive to live in California. The median house price is about $822,000, more than double the national average. Housing inventory is some of the lowest in the nation and even the state’s former housing and community development director has said that numerous initiatives and zoning reforms to boost housing production have not paid off yet. This lack of housing is causing the Bay Area, one of the country’s most economically productive areas, to stall. This engine of economic growth is slowing because people can’t afford to live there.

California Forever is positioned as a solution to this problem and is promising 40,000 to 160,000 dwelling units to house somewhere between 100,000 and 400,000 people. (For context, California as a state permits just 120,000 housing units per year.)

Yes, the development is backed by billionaires, but in a New York Times op-ed Ed Glaeser and Carlo Ratti note that privately backed new communities, such as Columbia, Md., have had a good record of success. A more recent example, Culdesac, was co-founded by a founding team member of Opendoor Technologies, an institutional investor focused on financializing single-family homes. Since the GFC in 2008, the relationship between Wall Street and housing seems increasingly hard to break.

Yes, California Forever is building on a greenfield, in an area of very limited water resources and a not-zero wildfire risk. But thousands of developments are going up across the country on greenfields. As more people leave California, they’re often moving to places like Arizona and Texas, where most new development is happening at the exurban fringe. It’s unlikely those developments are going to have compact, walkable neighborhoods with transportation systems like California Forever’s. In addition, California Forever has said:

We will be an ultra-efficient community in terms of water use and recycling. Overall, we are confident that our project will provide one of the best models in the world for drastically reducing per capita greenhouse gas emissions. 

Concerned that this city could be contrived and sterile? California Forever’s website says “All cities were once new cities.” If it’s not to your taste, tell that to the people who are moving to many of the new urbanist communities around the country. For example, the master-planned community, The Villages in Florida, was the fastest growing U.S. metro between 2010 and 2020.

Beyond all this, California Forever has guaranteed to create thousands of jobs, help people afford homeownership, and preserve open space.

The Case against California Forever

Maya Angelou famously said, “When someone shows you who they are, believe them the first time.” California Forever bought up their 60,000 acres of land in secrecy, bullied longtime family landowners into selling land so they could amass their ideal parcels, and now wants to be portrayed as civic-oriented, trustworthy, do-gooders? Why should we trust tech titans now when they have shown time and again their ambition is to make billions — not to improve people’s lives.

The ideas that billionaire-backed cities are better than nothing sets up a false choice — Californians shouldn’t settle for either.

It’s true that California hasn’t been producing enough housing to meet needs. But while the media is relentlessly focused on the state’s inadequate housing production, it has failed to notice the state’s housing production has actually been on an upward trajectory, increasing permits by almost 50 percent over the past decade from 82,603 in 2014 to about 120,000 in 2023.

To say that zoning reform is not working in California cities is to throw in the towel at precisely the wrong time. The burn-it-down ethos that has pervaded everything in American life this century so far, from technology to politics, has shown itself to be counterproductive. Fighting a better fight for existing communities rather than starting anew may actually be a faster way to effect more lives than building from scratch.

California has strongly protected its agricultural land for the past few decades, pushing development to cities for good reason. The California Forever development will increase the risk of wildfires and water shortages for this region. It doesn’t matter that California Forever will have sustainable attributes like walkability and transit; the project fundamentally flies in the face of the idea of “managed retreat” from nature and coastlines toward more density. And the new infrastructure that will need to be built for this project would divert resources away from supporting and improving the existing infrastructure in existing nearby cities.

Transit sounds great, but aren’t tech funders going to force autonomous vehicles here?

The renderings of California Forever are beautiful, but unrealistic. To have housing and maintain public spaces, transit, and infrastructure of this caliber will require very high housing prices and taxes. How will developers ensure this level of design quality in a mixed-income community? They can’t. Instead, this will either become a beautiful gated community, or require major concessions to bring down the costs.

How will California Forever create the affordable housing it promises? It offers to donate land. But land itself is rarely the problem in creating affordable housing. What will prevent this new city from having the same opposition to affordable housing that other communities have? Who will subsidize the housing so that it’s affordable to low-income renters?

California Forever has guaranteed 15,000 jobs and $400 million in homeownership support for residents. But in a world where population is declining in California, it’s “zero-sum economics.” A move to this community means a loss for another in the region — whether that is a loss of a taxpayer, a job, a homeowner. Adding supply in Solano County won’t improve San Francisco, as San Francisco’s population loss of more than 8 percent the past four years has done little to improve its homelessness or affordability challenges. Saying California Forever will solve the housing crisis is a bit like saying building a new highway lane will solve traffic; it’s induced demand.

And what will that $400 million in homeownership support look like? Even if it’s “grants” of a few thousand dollars towards downpayment costs, those offsets are bound to be factored into the total price of homes.

For subscribers, I’ll add my own analysis and explore:

• How tech titans have sought to build new cities before and failed

• How much can change in terms of climate, economy, and population in the anticipated 20 years it would take to build California Forever

• Alternative ways to accelerate the creation of housing and jobs that don’t require building a city from scratch