California Ensures Continued Support for First-Time Homeowners in New Budget Deal
In stark contrast to recent years, where California’s lawmakers enjoyed record budget surpluses, the scenario has significantly changed in the lead-up to the 2023-24 fiscal year budget. Faced with a formidable $32 billion deficit, the state’s leaders found themselves grappling with the need for rigorous fiscal negotiations.
These tough discussions came to a resolution late Monday, with Governor Gavin Newsom and leading Democratic legislators declaring they had forged a deal. Despite the fiscal deficit, the primary objective of the budget was clear, as elucidated by State Sen. President Pro Tem Toni Atkins, “We initiated our budget process this time confronted by formidable economic hurdles but with one dominant goal: to shield California’s progress. This budget accomplishes precisely that.”
This ‘progress’ Atkins referenced encapsulates several housing and development initiatives, indicating the state’s commitment to bolster these sectors even in challenging times.
A key highlight of the budget includes provisions for the state’s “Dream For All” initiative. This program, designed to aid first-time homebuyers by offering down payment assistance, was in such high demand that its funds were depleted within just two weeks of its inauguration. The program had an initial budget of $300 million, with the state providing up-front funds to homebuyers in exchange for a share in ownership. Earlier, Governor Newsom had proposed trimming this initiative as a measure to curtail costs. However, the newly agreed budget deal has earmarked an additional $200 million for the program’s refurbishment, as reported by Cal Matters.
The ‘Dream For All’ program isn’t the only budgetary provision directed at first-time homebuyers. The state’s CalHome initiative, managed by the Department of Housing & Community Development to offer grants to local agencies and nonprofits for housing rehabilitation and technical counseling, has received a further $50 million.
Continuing the state’s focus on housing, the budget has allocated another $50 million for a grant program aimed at assisting homeowners in building Accessory Dwelling Units (ADUs) — a move in sync with the state politicians’ ongoing efforts to foster more development of these secondary housing units, often referred to as ‘granny flats.’
The budget discussions between Governor Newsom and Democratic leaders experienced some roadblocks in recent weeks due to the governor’s late-stage push for new legislation to simplify the California Environmental Quality Act (CEQA) requirements. The aim was to expedite major infrastructure projects. However, as a compromise, Governor Newsom agreed to exclude a contentious $16 billion underground water tunnel project from the proposed legislation.
Additionally, the budget deal contributes $1 billion to a statewide homelessness fund, maintaining the funding level that was allocated in the two previous years. Despite the considerable fiscal deficit, the budget reinforces the state’s commitment to housing development and support for first-time homeowners.
