Sacramento – California has the second-lowest rate of homeownership and the second largest housing deficit in the nation. Homeownership rates among Californians are grossly inequitable, largely due to a legacy of exclusionary housing policies. In 2019, only 41% of Black and 49% of Latinx families owned their homes, compared to 68% of White and 66% of Asian families.
To address this issue, Assembly Majority Leader Eloise Gómez Reyes (D-Colton) introduced AB 2217: The Affordable Homeownership Production Act. This legislation will promote the construction of affordable homes by authorizing the Department of Housing and Community Development (HCD) to set higher per unit and total project caps within the CalHome program, which will assist with the creation of more affordable homeownership opportunities.
“We know that homeownership is proven to help families build generational wealth and achieve financial stability,” said Majority Leader Reyes. “According to the U.S. Census Bureau, homeowners have a median wealth 89 times higher than that of renters. Families who own homes are able to build equity and accumulate wealth over time, which they can use to invest in the success of future generations. By raising the caps on allocations within the CalHome program, this bill will generate more opportunity for affordable homeownership in our communities.”
The CalHome program, administered by HCD, is designed to facilitate the construction of properties to create ownership opportunities for low-income households. Through CalHome, local public agencies and nonprofits can apply for direct loans to assist with the cost of building affordable homes, including real property acquisition, predevelopment, and site development. These loans are designed to spur the production of new affordable units and help families become first-time homeowners.
CalHome is the only state funding source for preconstruction of homeownership projects. However, the program is funded under the nearly depleted Proposition 1, making it difficult for local jurisdictions and nonprofits to rely on this funding. As housing costs to develop have dramatically increased, the CalHome funding caps have remained stagnant, severely limiting the construction of affordable homeownership units.
“The CalHome program for affordable homeownership development is grossly underfunded and oversubscribed,” said Debbie Arakel, Executive Director of Habitat for Humanity California. “This means desperately needed affordable homes go unbuilt year after year. By updating the antiquated ‘one size fits all’ funding caps, nonprofit developers, including Habitat for Humanity affiliates statewide, will access CalHome funding to accelerate production and increase the supply of affordable homes for lower income families in urban and rural communities throughout California.”
“I applaud Assemblymember Reyes’ proactive approach in exploring ways to improve the CalHome program,” said David Hahn, Executive Director of Habitat for Humanity for the San Bernardino Area. “The current dollar caps that are in place significantly limit how many families Habitat for Humanity can assist in becoming first-time homebuyers, both locally and throughout the State. As a steering committee member of the Inland SoCal Housing Collective, I know that increasing funding levels and raising the caps will be welcomed news for many local non-profit housing organizations, like us, who regularly consider applying for CalHome funding. We are very fortunate to have a public servant like Eloise Reyes willing to lead this effort.”
AB 2217 authorizes HCD to raise its CalHome per unit and total project caps for the construction of new affordable homeownership units in high-cost areas. By investing in affordable ownership production, lower-income Californians and communities of color can access permanently affordable, equity-building homes that serve as the single most effective approach to achieving economic and racial justice.