California Realtors react to Governor’s state budget proposal
On January 10th, Governor Gavin Newsom introduced a 2023-24 state budget proposal that makes homelessness a top priority and focuses on holding cities and counties accountable for enforcing state housing laws and ensuring that every community plans for its fair share of housing. Newsom is proposing an additional $1 billion, bringing funds to address homelessness to a total of $15.3 billion in funding in two years. The budget proposal, however, does not include additional funding to address the state’s housing crisis.
Although Newsom has been a staunch supporter of homeownership and increasing the housing supply, the proposed budget removes $350 million in funding from programs that would help first-time homebuyers afford homes and affordable housing. The intent is to restore the reductions next year if the state has sufficient funds.
The budget proposal calls for the removal of the following funds: $200 million out of a previously budgeted $500 million from the state’s “Dream for All” program; $100 million from the state’s Calhome Program, which provides grants to local agencies and nonprofits assisting low income homebuyers; and $50 million from a program that provides grants for the construction of accessory dwelling units.
California Realtors are disappointed in the proposed cuts to these programs, but remain encouraged by Newsom’s commitment to homeownership. In response to the Governor’s 202324 state budget proposal, California Association of Realtors President Jennifer Branchini said in a statement, “While the state’s current budgetary shortfall may delay fully funding homeownership programs such as Senate President Pro Tem Toni Atkins’s California Dream for All down payment assistance plan in this year’s budget, we are encouraged by Governor Newsom’s commitment to homeownership programs going forward. We look forward to working with the Governor and legislative leaders to ensure that this and future state budgets create opportunities for new generations of Californians to build family wealth through homeownership.”
Branchini, who is a Bay Area Realtor, noted, “Great strides have been made, including last year’s historic investments in Calhome and the California Dream for All program. However, more needs to be done to help make homeownership more attainable for the state’s working families and support traditionally underserved communities so that they can build generational wealth. Today, only one in every five California households can afford a single-family home.
“Homeownership is the best way for working people to attain economic security and develop wealth. Funding to expand ownership housing to create this opportunity for more Californians must be a larger part of this year’s budget.”
Silicon Valley Association of Realtors President Jim Hamilton echoed Branchini’s remarks on the value of homeownership. “Homeownership is a long-term investment that builds wealth through overall appreciation, but more than this homeownership provides stability in our communities. When homeowners are part of a community, they get involved in community issues; which helps prevent crime, improves education and general upkeep of their neighborhoods.”
The National Association of Realtors cites the following documented social benefits of homeownership:
• Civic participation in both local community and national issues
• Higher membership in voluntary organizations and church attendance
• Better maintained homes and a greater attachment to the neighborhood and neighbors
• Lower teenage delinquencies among children living in owned homes
• Higher student test scores, higher rate of high school graduation, thereby higher earnings
• Children are more likely to participate in organized activities and have less television screen time.
• Homeowners report a general increase in positive outlook to life, with higher life satisfaction, higher self-esteem, happiness, and higher perceived control over their lives.
• Better health outcomes, better physical and psychological health
• Housing prices are higher in high-ownership neighborhoods.
“Realtors remain committed to making homeownership a reality for those who want to achieve it, so families can have a place where they can feel secure, build their financial futures, and strengthen communities,” said Hamilton.