{"id":11940,"date":"2025-05-22T07:16:20","date_gmt":"2025-05-22T14:16:20","guid":{"rendered":"https:\/\/jasonsblog.ddns.net\/?p=11940"},"modified":"2025-05-22T07:16:20","modified_gmt":"2025-05-22T14:16:20","slug":"warning-california-is-about-to-gamble-billions-on-another-housing-financial-sinkhole","status":"publish","type":"post","link":"https:\/\/jasonsblog.ddns.net\/index.php\/2025\/05\/22\/warning-california-is-about-to-gamble-billions-on-another-housing-financial-sinkhole\/","title":{"rendered":"Warning: California Is About to Gamble Billions on Another Housing Financial Sinkhole"},"content":{"rendered":"\n

This is clearly an enrichment scheme that large megacorps will take advantage of, and smaller developers will become entrapped by where those large megacorps will be able to gobble up their properties for pennies on the dollar later. And California just wrecks smaller landlords by making it difficult and lengthy to evict, and in some areas banning eviction outright even though the tenant pays no rent. And pay attention to the $24 billion spent on homelessness with little to show for it. And taxpayers will be on the hook for the financial guarantees. And of course, it’s time to pull out the clip on how California has been run by four families for decades (credit to the No Agenda Show<\/a> podcast). Demonrats in firm control of a state or city just exploit it into the ground, so pay attention to your future Colorado.<\/p>\n\n\n\n

https:\/\/redstate.com\/redstate-guest-editorial\/2025\/05\/22\/warning-california-is-about-to-gamble-billions-on-another-housing-financial-sinkhole-n2189421<\/a><\/p>\n\n\n

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AP Photo\/Rich Pedroncelli<\/em><\/figcaption><\/figure>\n\n\n\n

By Steve Williams<\/p>\n\n\n\n

California\u2019s housing crisis is now decades in the making. With affordability out of reach for many and new construction lagging far behind demand, state leaders are understandably under pressure to try something \u2014 anything \u2014 that might work. Enter SB 750, the California Residential Mortgage Insurance Act, authored by State Senator Dave Cortese (D)<\/a>. This proposal would create a state-backed loan insurance program for multifamily housing, administered by the California Housing Finance Agency (CalHFA). Developers would pay premiums, capped at 2 percent, to insure their construction and permanent loans, with the goal of unlocking capital and incentivizing new housing production.<\/p>\n\n\n\n

As someone with experience in both business and public policy, notably in real estate development and land use consulting, I understand the urgent need for financing tools that catalyze housing. SB 750 is creative, even bold. While the ambition is admirable, the bill raises serious red flags. Before California embraces this proposal, we need to ask some hard questions about trust, risk, and accountability.<\/p>\n\n\n\n

On paper, SB 750 offers promise. By removing a layer of financial uncertainty, it could help unfreeze stalled projects and attract investment, especially in a high-interest-rate environment where lenders have grown cautious. Streamlining capital stacks and offering credit enhancement through state-backed insurance could meaningfully improve the feasibility of many projects. The logic is sound: if the state helps reduce risk, developers can build more affordably and quickly.<\/p>\n\n\n\n

But critics, including those who\u2019ve watched years of failed housing efforts from the state, are right to be skeptical. First, there\u2019s the matter of financial liability. While SB 750 supporters claim the program would be self-sustaining through developer-paid premiums, the state would ultimately be the guarantor. If insured projects default \u2014 particularly during an economic downturn \u2014 it\u2019s California taxpayers who may be left holding the bag. We cannot ignore the possibility that the state could be dragged into another long-term financial obligation it\u2019s unprepared to manage.<\/p>\n\n\n\n

Second, there\u2019s a fairness concern. Programs like this often end up favoring the best-connected and most resourced players \u2014 typically large developers with the staff, attorneys, and institutional muscle to maneuver through complex state programs. That\u2019s not just speculation; it\u2019s historically proven<\/a>. In trying to reduce housing inequality, we risk reinforcing a two-tier system where the little guys are locked out while the big firms cash in.<\/p>\n\n\n\n

Then there\u2019s the issue of trust. Can we really rely on the state to administer a financially complex program when it has shown such poor track records with existing housing and homelessness funds? According to a 2024 report by the California State Auditor, the state spent $24 billion on homelessness between 2018 and 2023<\/a>, with little to show for it. In fact, the report highlighted that the state stopped even tracking performance metrics in 2021. If billions can be spent without oversight, why should we believe this time will be different? If the state can\u2019t competently manage programs already in place, handing it even more responsibility \u2014 let alone underwriting risk \u2014 is not just questionable, it\u2019s reckless.<\/p>\n\n\n\n

Moreover, SB 750 can\u2019t even proceed without a constitutional amendment<\/a>, which would require approval by both the Legislature and voters. That alone should prompt deeper scrutiny. Why are we considering enshrining an untested financial mechanism into the state\u2019s constitution? Doing so ties the hands of future lawmakers and makes it exponentially harder to revise or repeal the program should things go wrong.<\/p>\n\n\n\n

This is not a bill that needs guardrails; it\u2019s a bill that needs to be stopped. SB 750 shifts financial risk onto taxpayers without addressing the real structural problems behind California\u2019s housing crisis. We don\u2019t need another untested, bureaucratically administered program with vague promises and no clear accountability. Rather than creating new layers of complexity and liability, the state should focus on streamlining existing processes, enforcing transparency in how current housing dollars are spent, and empowering local solutions.<\/p>\n\n\n\n

That includes reforming CEQA, streamlining the entitlement and permit process, and ensuring rigorous oversight of existing public funds before requesting more. California can\u2019t afford another initiative that becomes a financial sinkhole. Legislators and voters must reject SB 750 to protect taxpayers and insist on sustainable solutions \u2014 not more rigged schemes.<\/p>\n","protected":false},"excerpt":{"rendered":"

This is clearly an enrichment scheme that large megacorps will take advantage of, and smaller developers will become entrapped by where those large megacorps will be able to gobble up their properties for pennies on the dollar later. And California just wrecks smaller landlords by making it difficult and lengthy to evict, and in some […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-11940","post","type-post","status-publish","format-standard","hentry","category-world"],"blocksy_meta":[],"featured_image_src":null,"author_info":{"display_name":"Jason","author_link":"https:\/\/jasonsblog.ddns.net\/index.php\/author\/jturning\/"},"_links":{"self":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/11940","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/comments?post=11940"}],"version-history":[{"count":1,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/11940\/revisions"}],"predecessor-version":[{"id":11941,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/11940\/revisions\/11941"}],"wp:attachment":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/media?parent=11940"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/categories?post=11940"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/tags?post=11940"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}