California Democrats may have walked back portions of a spending wish list to fund a state housing program that would have paid for as much as 45 percent of homes for disadvantaged first-time home buyers, according to an inside source.
Senate Democrats sought to create the California Dream For All program, outlined in its Build Back Boldly: Senate Democrat Budget Priorities for 2021–22 and Beyond. The program was intended to address “historical and economic barriers to homeownership with a new way for Californians to buy a first home and get a foothold in the middle class and to begin to build family wealth.”
However, the California Dream For All program isn’t in the proposed budget blueprint passed by lawmakers on June 14, now sitting on California Gov. Gavin Newsom’s desk. With dozens of budget trailer bills still to be passed, it’s too early to tell for sure if the proposed state-owned housing program will be added, an inside source told The Epoch Times.
“Anything is on the table,” even after Newsom signs the budget, the source said.
“I’ll never say never, because with these budget trailer bills, there’s no deadline. They can vote on them, amend them, fill in any language they want all the way until we adjourn from session in September. Due to the California legislative system, it’s an open-ended question. It’s not a done deal because it’s not in the main budget. It can very much happen.”
The source said Democrats usually lace the “all-in-one” budget trailer bills with “poison pills” they know Republicans won’t swallow.
“They have 120-something trailer bills currently waiting to be used. They’re empty shells waiting to be filled … and I would venture to say 20 to 40 of them will be used, approximately,” the source said.
As a possible alternative to the program, Democrats may have agreed to provide $100 million in federal funds for an existing first-time homebuyer assistance program and other housing-related goals, such as renovating hotels to house the homeless, the source said.
Senate Democrats had hoped that this year’s budget would have been “the first step of creating this program by directing the State Treasurer and the Administration to develop the program in full detail and present back to the Legislature to be implemented through statute in 2022,” according to the Build Back Boldly plan.
The Democrats have said that the Build Back Boldly plan “embraces the once-a-generation opportunity for California to make bold transformative progress as the economy rebounds from the COVID-19 crisis.”
Rather than relying heavily on taxpayers to foot the bill for the California Dream For All program, the plan states that “this program will come with minimal state costs and instead rely on putting investors’ money (from around the world) to work building wealth for deserving Californians.”
The program seeks to create a state-sponsored corporation that would establish a new revolving fund, called the California Dream Fund, to be infused with a one-time deposit of available state or federal funds. Eligible first-time homebuyers would “partner” in purchasing homes with the fund, which would serve as a “silent partner” and own “a minority share of up to 45 percent of the house.”
For example, a $400,000 home could be purchased for $220,000, with the California Dream Fund covering $180,000, the document states.
Anaheim City Councilman Trevor O’Neil, who serves on the Southern California Association of Governments (SCAG) Regional Council that deals with state housing requirements, told The Epoch Times in an email that the California Dream For All program “would be a massive welfare program that, like every other scheme for government-subsidized housing that reduces the cost for some, would have the unintended consequence of raising the cost of market-rate housing for everyone else.”
“Increasing someone’s buying power with someone else’s money will only drive up overall home prices, making it more difficult for hard-working families to afford a home and achieve the American Dream,” said O’Neil, who also chairs the Orange County Council of Governments (OCCOG). “And if home values later drop, the program would implode, much like we saw when unqualified buyers defaulted on loans they never should have qualified for in the wake of the Great Recession.”
A Republican source said in an email to The Epoch Times that the Democrats hammered out this year’s budget “completely behind closed doors,” and kept Republicans “in the dark.” Democrats didn’t hold conference committee hearings “where these proposals are usually discussed,” according to the source.
Under California’s constitution, the legislature must pass a budget bill no later than midnight on June 15 every year, and the governor must sign it by June 30.
Sen. Jim Nielson (R-Tehama) criticized the placeholder budget passed on June 14, calling it a “fake” budget.
“This is a fake budget and the Democrat-controlled budget process, with no public input or transparency, is a sham,” he said in a statement.
“Following the Budget Act will be dozens of so-called budget trailer bills. Many will contain major policy provisions that will circumvent the normal deliberative legislative process.”