Gov. Newsom's May Revise Budget Proposal Misses Historic Opportunity to Address State's Severe Homeownership Inequities

LOS ANGELES, May 14, 2021 /PRNewswire/ -- CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) President Dave Walsh issued the following statement in response to the May Revise budget proposal announced earlier today:

"California has a housing crisis. Our state desperately needs more housing to meet the needs of diverse middle class and low-income Californians. We appreciate Gov. Newsom's recognition of this challenge and his commitment to address this critical need in the May Revise budget proposal and today's press conference. However, the May Revise budget proposal must be amended to further increase housing stability through homeownership. Homeownership is key to building generational wealth and helps to stabilize communities. But homeownership rates are at the lowest in California since the 1940s, and there's significant disparity in homeownership. Black and Latinx Americans are twice as likely to rent as whites.

"With California's historic state budget surplus, there has never been a better opportunity to begin to seriously address this inequity and California's severe housing shortage by making smart investments and policy reforms that turbocharge the planning and construction of new homes for people from all walks of life.

"This is about more than just housing; it's about equity and access to homeownership for all Californians. Median home prices in California exceed $720,000. Many middle-class families of color in our majority minority state are priced out of the market of available homes. This leaves these families with a choice of remaining a forever-renter with no opportunity to build equity, or enduring unreasonably long commutes to a job in a community in which they cannot afford to live.  

"Without action, Californians who otherwise love our state will be forced to leave. Last year marked the first decline in California's population in decades as only a quarter of households can afford the median price of a home. Families can expect to pay 70 percent more in rent than elsewhere in America. This is inexcusable and inconsistent with the California dream. Homes should be accessible to all Californians.

"We are urging immediate action through the state budget process to address inequities in homeownership and increase the supply of housing at all levels of affordability. Of the $9.3 billion allocated to housing in this budget, only $725 million is allocated directly towards expanding homeownership opportunities and accessory dwelling construction. We can advance critically needed new housing in California through budget investments. We call on the Legislature to enact the governor's housing proposals but also to:

• Establish and fund a Housing Accountability Unit as proposed by the governor in January.
• Approve matching grants and tax credits to compliment those proposed by Biden's Administration. These grants will help local governments plan and implement housing programs, while providing tax credits to developers constructing affordable units. California must not limit its tax credit programs to rental housing and must assure we equally encourage the construction of owner-occupied units.
• Fund a tax credit for our states working families who are first-time, low- and moderate-income homebuyers.
• Create parity in state funding programs to assure that the construction of homeownership housing is given equal consideration. We cannot focus all of our resources on the development of rental housing if we are going to help working Californians, including those from traditionally financially disadvantaged communities, buy homes and close the wealth gap.

"These investments are essential to building more housing in our state – and fast. We could not agree more with Gov. Gavin Newsom's ambitious call for aggressive increases in the supply of housing, but there has been little progress in making this dream a reality. To achieve the housing we need, our state must expand its focus beyond funding affordable rental housing and increase opportunities for working Californians to access all forms of stable homeownership housing."

"This is about the future of our state. This is about keeping more Californians from falling into homelessness. This is about our friends and family, our neighbors and our communities. Let's come together to prioritize more housing in California – it's the right thing to do."

Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS^® (www.car.org) is one of the largest state trade organizations in the United States with more than 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

SOURCE CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)