Homeownership hopes of working families deserve support in state budget
In early June, on a bustling street just a stone’s throw from the Cow Palace, six families will move into a row of attractive townhomes. These homes were built by the families themselves, alongside Habitat for Humanity construction staff and a vast army of community volunteers.
As with every Habitat home, these homes are for ownership. We know that affordable home ownership has the power to unlock a families’ potential by growing their financial wherewithal and allowing them additional opportunities to focus on their kids’ education. It is a crucial but too-often ignored part of our region’s housing mix.
California is poised at a crossroads in terms of how it treats ownership housing for working families. With a June 15 deadline for a budget bill to be passed looming, negotiations continue at the state capitol between legislators and the Governor to secure proper funding for ownership, along with the legislation necessary to ensure it can be used in practice by developers.
This seeks to overhaul state funding mechanisms for affordable housing that have historically prioritized rental unit production while neglecting construction of homes for ownership. It is a hidebound approach that has failed a generation of well-qualified working Californians who found themselves unable to access this greatest of equity-building tools.
The CalHome program, for instance, is the only state funding source for ownership construction and has been a powerful catalyst for homebuilding over the last two decades. But the reality is that it has been heavily oversubscribed since its inception and will soon be out of money entirely.
And, although building and development costs have increased precipitously in recent years, the maximum amounts of support each home and each project could access via CalHome remained flat. The resulting gulf between higher costs, on the one hand, and static subsidy levels, on the other, unnecessarily impeded construction across California at a time when our state is dealing with its worst housing crisis since the 1950s.
The question we face today is whether Governor Gavin Newsom will commit to replenishing this depleted source of funding for ownership housing and whether the legislature will begin to level the regulatory playing field between affordable ownership and affordable rental.
Although homeownership support failed to appear in the latest version of the Governor’s budget, it still isn’t too late for this to be remedied. This would meet the requests of the state senate, where homeownership featured prominently in democrats’ budget proposals to the tune of $350 million. Add to this a large bipartisan coalition of Assembly members supporting a $400 million investment and it should mean that the stars align to ensure this vital work can continue.
In recent months Bay Area lawmakers have joined dozens of their colleagues in a bipartisan push to pass legislation such as AB2217 — the Affordable Home Production Act. This would push Cal Home administrators to raise spending caps and ensure adequate funds are delivered to a diverse range of construction projects in urban, suburban and rural areas. The passage of this bill, and its signature by the Governor, will boost the prospects of thousands of affordable housing projects waiting to be built.
So the progress made in the next few weeks in Sacramento will determine whether more of our working families and essential workers can begin building equity in a home that they own.
How many precisely? Well, Habitat’s own application statistics tell the story. For a 20-home Habitat development in Redwood City, more than 700 applications were received from families ready, willing and able to invest 500 hours in building their own homes alongside us.
California has the lowest rate of homeownership in the nation, coupled with the second largest housing deficit. The homeownership we do have is riven with inequity not least thanks to a long legacy of exclusionary housing policies. In 2019 41% of black families and 49% of latino families owned their own homes, compared with 68% of white families and 66% of asian families.
If we fail to fully fund CalHome we will miss an enormous opportunity to help these families access affordable homeownership and begin to accrue the equity that they would otherwise unnecessarily be denied.
Maureen Sedonaen is CEO of Habitat for Humanity Greater San Francisco and Chair of Habitat for Humanity California.