California’s Middle-Class Housing Conundrum: A Former Legislative Leader’s Plan
A former state legislative leader, Bob Hertzberg, has voiced his concern that Democrats in Sacramento have been neglecting the housing needs of middle-class Californians. He believes that the focus on homelessness and affordable housing, which often requires taxpayer subsidies, has left the middle class behind. Hertzberg, who was an Assembly speaker and Senate majority leader, has proposed a ballot initiative for the 2026 election to help middle-class buyers purchase new homes.
The initiative would allow middle-class buyers to borrow most of their down payment, rather than having to pay 20% of the selling price in cash. For example, based on the July statewide median home price of $884,050, a buyer would only need to pay $26,522 (3% of the price) and borrow the remaining $150,289 (17% of the price). This would be in addition to the regular first mortgage on 80% of the selling price.
Addressing the Housing Shortage
Hertzberg’s plan aims to increase the housing supply by incentivizing the construction of new homes. He believes that this is “critically important” to addressing the state’s housing shortage. The program would be limited to new homes, including townhouses and condos, and would be available to buyers whose household income is less than 200% of the median for their local area.
The program would be administered by the California Housing Finance Agency and would be financed by the sale of $25 billion in revenue bonds. Borrowers would be required to repay their second mortgage if the home is sold or refinanced within 15 years. Hertzberg estimates that the program could generate up to 150,000 new homes, although this is still short of the millions of new homes needed to meet the state’s housing demands.
Expert Insights and Data
According to Dan Dunmoyer, president and chief executive of the California Building Industry Assn., the state needs to build 437,000 new homes annually to meet Governor Gavin Newsom’s original campaign promise of 3.5 million new homes by the time he leaves office. However, the current pace of construction is only about 112,000 new homes per year.
Hertzberg’s plan has been welcomed by some experts, who believe that it could help to address the state’s housing affordability crisis. As Hertzberg notes, “Home is where the wealth is. Home is a dream.” By helping middle-class Californians to purchase new homes, the program could help to create a more stable and prosperous future for these families.
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