Opinion: Proposed housing program in California would help low- and middle-income residents buy homes

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DeBerry is President and CEO of the San Diego County Black Chamber of Commerce and lives in San Diego. mayberry is Chairman of the Board of the San Diego County Black Chamber of Commerce and lives in Chula Vista. Farley is owner of Corban Realty Group and past president of the Greater San Diego Association of Realtors and lives in San Diego.

A new program championed by one of our local leaders could be the key to unlocking homeownership opportunities for many aspiring buyers in our communities of color. The California Dream for All program, proposed by California State Senate President Pro Tempore Toni Atkins, D-San Diego, would help first-time homebuyers achieve their dream of homeownership by providing significant down payment assistance to eligible individuals. The program has the potential to reduce some of the barriers to homeownership that have disproportionately prevented families of color from owning homes. California is experiencing a spiraling housing affordability crisis house prices. The median home price in california was $884,890 in April, up 8.7% from April 2021, according to the California Association of Realtors. It’s just out of reach for a lot of people.

It also created an even larger wealth gap and positioned California 49th among 50 states homeownership rate in 2020. Although homeownership is a pathway to housing stability and building generational wealth, the current rise in the cost of homes, rents and the cost of life is increasingly impacting potential buyers, who find it much harder to save enough for a 20 percent down payment. Disparities in homeownership rates are also exacerbated by systemic racial barriers that have left communities of color behind and unable to invest in homeownership opportunities. It should come as no surprise that a 2019 Federal Reserve Study found that the typical white family has eight times the wealth of the typical black family and five times that of a typical Hispanic family. The main reason ? Inequality in home ownership rates.

According to 2021 California Association of Realtors Housing Affordability Index, only 13-15% of black and Latino households in San Diego County can afford to buy a median-priced single-family home, compared to 32% of white households. According to data from California Dream Index.

here’s how Atkins California Dream for All Program would solve this problem. Although the details of the proposal are still being finalized, as proposed, the state would allocate $1 billion per year for 10 years to establish a renewable, shared appreciation program for new owners. This level of financing would help approximately 8,000 new homeowners per year by providing 17% of the purchase price of the home. This could significantly reduce the down payment and reduce monthly mortgage payments by more than 30%, saving the typical buyer more than $12,000 per year. Homebuyers could also forego expensive mortgage insurance and benefit from in-depth mortgage advice. Once homeowners sell, transfer, or refinance a home, they repay the state revolving fund an amount equal to the 17% share of the home’s current value. These funds would then be available to help other first-time home buyers buy a home and begin building wealth.

The California Dream for All program would be aimed specifically at low- and middle-income Californians who are first-time homeowners — particularly those who would be first-generation homebuyers — on a first-come, first-served basis. Targeted outreach is planned for communities of color, including black and Latinx communities. The program is aligned with the mission of the San Diego County Black Chamber of Commerce to help close the generational wealth gap.

As noted by Otto Catrina, president of the California Association of Realtors, homeownership is key to creating generational wealth and stronger communities in our state. Many Californians can afford a monthly payment but need help with the down payment and closing costs. Home ownership is part of the American dream. We commend Atkins for its visionary California Dream for All program and encourage the Legislature and Governor to support its funding and implementation.

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