Not sure where this ends up, but I guess it’s good things are being tried. The housing situation in California (my home state) is absolutely ridiculous.
Rent prices go up every year, pricing people out of their own cities and towns. Those who don’t own a home already have little hope of buying any time soon (maybe ever). And this is not limited to just the nicer areas of the state, it also applies to bad/high crime neighborhoods as well.
The situation is untenable, but regarding the new city (if it happens), I have a hard time believing it’s not just going to end up being limited to the rich (ie. the ones who are suffering the least from the housing crisis).