Homeownership aspirations of California’s middle class may be dashed by budget

5 Minute Read

California’s venerable CALHOME program has been a powerful spur for affordable homebuilding for over two decades. Unlike other housing subsidy mechanisms, funds provided via CALHOME are used to build homes that can be bought by middle class families across the Golden State.

But today CALHOME stands depleted of funds and on the brink of collapse. It failed to appear in the Governor’s proposed budget, released this month, over the wishes of a large bi-partisan group of lawmakers who recognize the powerful role homeownership has to play as part of our housing mix.

All Habitat for Humanity homes are owned by the householder. So we see every day the difference affordable homeownership makes in the lives of working families, not least by helping grow their financial wherewithal and allowing them additional opportunities to focus on their kids’ education.

There's Still Time

It is uncertain why a budget so focused on promoting equity misses such a perfect opportunity to boost the prospects and housing chances of our essential workers. Still less clear is why a program whose hallmarks are value-for-money and efficient use of taxpayer dollars has remained neglected.

The door is not yet completely closed. Negotiations continue in Sacramento as to the final state of the budget and hope remains that CALHOME will be replenished to enable homebuilding to continue. And with complementary legislation, aimed at ensuring CALHOME funds can support the widest variety of projects, continuing to progress at the state capitol we could still be in a position to extend the promise of homeownership to more families.

Things to remember:

CALHOME is the only state funding slated specifically for the production of affordable homes for ownership
Access to affordable homeownership, which help keeps essential workers in the communities they serve, is in jeopardy if CALHOME does not receive future funding

With California now having the lowest rate of homeownership in the nation, we can ill afford an approach which will see ownership retreat further to become the province of only the wealthiest.

Leveraging Funding to Build More Homes

Why should CALHOME be prioritized? As the only state source of funding supporting the production of affordable housing for ownership, its funds are used by developers to unlock a constellation of other financing that is essential from getting homes off the drawing board and into reality.

In fact Habitat’s own latest development in Daly City was supported by CALHOME program funds which primed the pump for a fundraising campaign that delivered the entire project.

Nursing assistants, teacher’s aides and custodial staff are the typical occupations of those well-qualified householders who most often benefit from affordable homeownership. They work hard and have a good track record of financial responsibility, but what they too often don’t have is a fair shot at owning their own home thanks to stratospheric housing costs.

It is crucial to recognize housing as a continuum that families can progress along. At the same time we must avoid policy approaches that reflect a ‘once-a-renter-always-a-renter’ mindset that stymies the ambition of so many working families to become homeowners. Down payment assistance programs are helpful but it is the lack of home supply that is the principal impediment to ownership and which CALHOME, uniquely, has the capability to address.

The California Dream — the idea that every person can achieve a better life, regardless of where they start out — is central to who we are as Californians.

- Governor Gavin Newsom

Support CalHome, Support Families

And while, when the program was established, the concern was that there might be too few high-quality construction projects to support, in reality it has been heavily oversubscribed since its launch. There are many worthy and well-considered projects that affordable developers could be galvanized to produce via CALHOME. It would be a crying shame if these were to fall by the wayside.

So it is heartening that 42 lawmakers, and counting, have backed Habitat’s call for $400m in funding for development of thousands of affordable deed-restricted ownership homes. They have been joined by organizations as varied as the California Building Industry Association and the California Association of Realtors, these measures will support a housing solution that is scalable and which, whether privately funded or publicly financed, offers unprecedented impact for families.

Join these supporters of CalHome:

42 California lawmakers
California Building Industry Association
California Association of Realtors
Habitat for Humanity

Putting Homeownership Within Reach

In recent years, as residential construction costs have gone through the roof, the overall amount of support that any particular project could apply for through CALHOME remained static. This widening gap between cost-to-build and available subsidy has further hampered homebuilding in California at a time when our state is seeking to address a housing deficit that is the second largest in the U.S.

Assembly Majority Leader Eloise Gómez Reyes has introduced AB 2217 ‘The Affordable Home Production Act’ which will seek to boost project caps and so ensure that these funds can be used to build the most homes in urban, suburban, and rural parts of the state.

It is a well-targeted approach that should make funds accessible to an even greater range of projects.

With California now having the lowest rate of homeownership in the nation, we can ill afford an approach which will see ownership retreat further to become the province of only the wealthiest.

CALHOME is the response of a state ambitious for its working families and determined to see them fulfill their potential through hard work and enterprise. We must support it, and support them, by putting homeownership within reach and facilitating access to this greatest of equity-building tools.

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