Supporters say it will strategically direct funds toward ready-to-go projects, prioritizing affordable rental units.
California consistently ranks as one of the most expensive states to build and buy a home, but Newsom is hopeful that will soon change.
"59% increase in housing construction, 57% decrease in the time to getting permits," he said. "That's real. That's the receipt."
The state law passed with overwhelming bipartisan support, and Newsom applauded the federal government's similar approach with the recent passing of its housing bill.
That legislation looks to reduce regulations, speed up approvals and gives local governments more flexibility to move projects forward.