Up to $1,350 a Month for 20 Years Just to Build a Home

1. The Problem

California has made it too expensive to build homes, and now AB 130 makes that problem worse.

Signed into law in 2025 by Gavin Newsom, AB 130 was sold as a way to make it easier to build housing. Instead, it adds a new layer of cost through its Vehicle Miles Traveled (VMT) provisions.

VMT is a metric the state uses to estimate how much people living in a new development are expected to drive. Under AB 130, if a project is expected to generate more driving, developers must offset that impact.

The law creates a new statewide VMT Mitigation Bank, allowing developers to pay into a government-managed fund instead of reducing driving directly. That fund is used to finance state-approved projects like dense housing or transit-oriented development, based on formulas set by regulators.

In other words, the state is setting up a system where the cost of building housing is determined by regulatory formulas rather than the market.

The key point is this: the amount developers must pay is not fixed in law. It will be determined by state agencies through a complex system of credits, formulas, and guidance.

Some estimates suggest these charges could reach $16,200 per year per unit — or up to $1,350 per month for 20 years for a single home or apartment.

That is not a minor fee. That is a major new cost layered onto every new home.

Those costs don’t disappear. They get passed directly to buyers and renters. Some projects won’t get built at all. The ones that do will cost more.

At a time when California should be lowering costs and building more homes, this moves in the opposite direction.

2. The Problem Democrats Created

California Democrats made housing expensive to build in the first place. Restrictive zoning, CEQA abuse, endless permitting delays, and rising compliance costs have choked off supply and driven up prices across the board.

People adjusted to that reality. When homes are scarce and expensive, families make tradeoffs. They live where they can afford to live. They commute. They do what they have to do to make it work.

Now, instead of fixing the root problem, Democrats are layering on a new system of VMT charges through a state-run mitigation bank that penalizes those choices.

This is the same pattern: create a problem through bad policy, ignore the cause, and then impose new costs on the consequences.

You cannot make housing affordable by making it more expensive to build.

3. Steve’s Plan

Steve Hilton will focus on one thing: lowering the cost of building homes and stopping this new VMT scheme from driving prices even higher.

1. End the War on Single-Family Homes and Make It Easier to Build

Make it easier to build the kinds of homes families actually want, including single-family homes, and allow growth in areas that can support it.

State government will stop acting as a barrier. Agencies will be directed to move projects forward, cut delays, and stop using regulations to stall or kill housing.

2. Shut Down the VMT Cost Scheme at the Source

The size of these charges will be determined by the Office of Land Use and Climate Innovation (LCI), which is responsible for setting the rules for the VMT Mitigation Bank.

Steve will direct LCI to set the cost of VMT credits at zero, effectively eliminating these charges.

That means rewriting the formulas and credit system so this program cannot be used to impose new costs on housing.

3. Block Agencies from Turning VMT into a Blank Check

He will direct state agencies, including Caltrans, to revise their guidance so VMT cannot be used to justify excessive mitigation requirements or new fees on housing projects.

The rules will make clear that projected driving cannot be used as a blank check to add costs.

4. Conclusion

California’s housing crisis is the result of policy choices that made it too difficult and too expensive to build homes.

AB 130 adds a new layer of cost through a complicated system of VMT credits, mitigation payments, and state-set pricing formulas that will be defined by regulators, not voters or the legislature.

Whether this becomes a major new cost on housing will depend on how those rules are written.

The solution is clear: lower the cost of building and stop adding new ones. Build more homes. Get government out of the way.

California doesn’t need more bureaucratic schemes. It needs fewer barriers, lower costs, and more homes.