California has a radical homebuying plan

HW+ Golden Gate, San Francisco, California, USA

From the policing of an automobile’s tailpipe emissions to workplace rights for independent contractors, California has a track record of putting once marginal ideas into the American mainstream. It may do the same for government-subsidized homeownership.

Last week, the Democratic-dominated California state legislature unveiled a $267 billion spending plan for the upcoming fiscal year. Of that enormous pie is an unspecified sliver toward “California Dream for All,” in which the state would pay for up to 45% of a home purchase’s cost for a first-time homebuyer.

“California Dream for All” is controversial and potentially complex, an unusual fish in the policy sea of homebuyer tax credits and federal loan programs. Never before has California, or it would appear any other state, proposed a direct cash subsidy to first-time homebuyers, said Gary Painter, a professor at the USC Price School of Public Policy.

The legislation is specifically targeted to boost home ownership among racial minorities, explained Toni Atkins, a San Diego Democrat and California Senate President pro tempore, “communities that have been historically shut out of home ownership.”

The home ownership rate among Black California residents was 41% in 2019, according to the California Housing Finance Agency, and it was 49% for Latino residents.

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