Q&A with Lt. Gov. Eleni Kounalakis: A Woman Profoundly Grateful To Be Part of the Solution

The Honorable Eleni Kounalakis, the first woman to be elected Lieutenant Governor of California, brought strong land development DNA to the Statehouse upon her election in 2018. Her father started one of the most successful land development companies in the Sacramento region, AKT Development, and she followed in his footsteps, ultimately serving as the company’s president before applying her business and development know-how to politics. She graciously took some time recently to share her thoughts with Southern California Builder.

Southern California Builder: Madam Lieutenant Governor, you grew up in a successful land development family. What are some of your memories and takeaways from this experience?

Eleni Kounalakis: My father built his business from the ground up and I worked with him in the business for about 18 years. I started out answering the phone, then after business school and working in the Bay Area, I went back and became a project manager, then vice president and ultimately president of AKT for about 10 years. We built major master-planned communities in the Sacramento region, including one of the biggest, if not the biggest in the area. That required assembling large parcels of land, working with landowner groups, and leading those groups to put what I call the legal infrastructure in place to be able to build master-planned communities in new growth areas.

In terms of my fond memories, it was 18 years – a huge part of my life – but I think, ultimately, I felt from early on that this was exciting, inspiring, and fulfilling. There’s nothing like building developments, building communities, and even now to be able to drive around the Sacramento area and see streets that I got to name, see intersections that I helped build – I love it, and I loved the work immensely! Most importantly, I have the fondest feeling knowing that I helped deliver homes for working class Californians, which is so important because we know that housing is woefully under-supplied in this state. That under-supply has driven the price of housing up very high, which is the driving force of the affordability crisis we are facing in California, so I am profoundly grateful I had the opportunity at AKT to be a part of the solution.

SCB: Are you optimistic that production of all types of housing will increase in California, helping to bring an end to the ongoing housing crisis in the state?

EK: I am indeed optimistic that we are going to be able to build more housing in California. There has been a real awakening that those who have worked so hard to stop new housing are usually people who already own a home. Those who come from communities that can no longer afford a house are aware that building more housing, particularly more affordable housing units, will benefit them and people like them. We have put affordable housing in a box where it is defined as “subsidized affordable housing.”

When I was in the business, affordable housing was market-rate affordable housing, which was affordable to middle class families. That’s gone away, and that’s hurt so many people and so many families. A little over a year ago, in May of 2022, we hit a peak in California when the median home price reached $900,000 for a single-family home. That is not affordable to middle class families.

How do we fix this? The answer is we need to dive into the policies that have made it so difficult to build, and we need to rework and reform those policies. The way we do that is not by undermining our environmental priorities and goals; but to find efficiencies and help streamline the process.

SCB: Have you carried forward lessons gained from your 18 years at AKT Development into your political career?

EK: Yes, because we talk about housing all the time. I am a member of the Governor’s Council of Economic Advisors, which recognizes the impact housing unaffordability is having on the state, and members of his team also regularly consult with me about the best ways to make it easier to build. I think we are just at the very beginning of government reform to address the housing crisis. We have already started doing the work we need to do. I believe we are off to a very powerful start with some of the legislation that is making its way through this year, and really, the fact that these conversations are happening in such a pointed and sophisticated way represents tremendous progress. But again, we have more work to do. We need the stakeholders at the table, and frankly, we need builders at the table.

SCB: While the supply chain situation has improved, our industry continues to experience supply chain issues that are slowing delivery of homes. From your perspective as someone who has been deeply involved in international trade for many years, how do you see these problems being resolved?

EK: What we saw during COVID was unpredictable and had a major impact on not just the housing industry but the economy as a whole. It drove inflation in almost every sector, and at one point we had major backlogs of container ships outside the ports of Long Beach and LA. We saw the cost of everything related to the supply chain go up, and for the building industry, we also saw lumber costs go up and the lack of availability of some of the key components you need to build. Some of that crisis has eased as we have more slack coming back into the system, but there is certainly more that we can and should be doing to improve the movement of goods through the state. I think COVID has pushed us to do more work to coordinate between the various parts of the transportation system, whether it’s the ports, or the distribution centers, or warehouses, all the way to the end users to make sure that coordination is improved.

SCB: As the first woman to be elected Lieutenant Governor of California, and prior to that, as one who led a company in an industry that traditionally has not had an abundance of women leaders, how have you been able to use your influence and knowledge to encourage young women and others from under-represented communities?

EK: What I observed back in the 1990s, when I was starting out, is that land development was, and has always been, a very high-risk business. As a result, we would always talk about land developers as cowboys – again, driven by how risky the business is by virtue of all the things we have been talking about. It’s still risky, but what we are seeing are more women who want to take on that kind of risk. Rachel Bardis of Bardis Homes up here in Sacramento comes to mind, a good friend of mine who is in the business of building housing and followed in her father’s footsteps. I’m excited that there are so many more women who are both willing to get into this business and can attract capital and investment that is needed because they bring tremendous capability to the table.

So, I love it! I love seeing all these fantastic women leaders in the industry, and I’m sure we are going to get more – and not just more women, but also more minorities from segments of our population who have not traditionally had a seat at this table. There is a body of research now that shows that when you have a greater, more diverse representation of the workplace, you get better outcomes. When you have diversity on boards, at the table with a voice, working together with all their counterparts, you get better projects and better outcomes. It’s strategically smart for industries to open opportunities for women and others of their colleagues who traditionally haven’t had these opportunities to lead. We are seeing the track record of equity in the workplace now, and because that record is so positive, it is leading to greater diversity in hiring, which is something that will have a tremendously positive impact.

SCB: So would your advice be to jump in?

EK: Yes! Make room for the cowgirls! 