California Budget Deal Keeps First Time Homeowner Funding

Unlike the past couple years, when California politicians were blessed with record budget surpluses, ahead of the 2023-24 fiscal year budget state leaders have been forced to reckon with a $32 billion deficit.

That shortfall led to weeks of difficult talks, which broke through late on Monday when Gov. Gavin Newsom and top Democratic legislators announced they had reached a deal.

“We started our budget process this time around with tough economic challenges, but one overarching goal: to protect California’s progress,” state Sen. President Pro Tem Toni Atkins said in a statement. “This budget does exactly that.”

And that progress, apparently, extends to several housing and development measures.

One is the state’s “Dream For All” program, a down payment assistance program for first-time homebuyers that was so popular it was drained this year within two weeks of opening. The program, in which the state fronted homebuyers money in exchange for an ownership share, had a $300 million budget. Earlier this year Newsom had floated reducing it as a cost-saving measure, but the new budget deal includes another $200 million to revamp the program, Cal Matters reported.

That program isn’t the only provision in the proposed budget for first-time homebuyers. The state’s CalHome program — administered by the Department of Housing & Community Development to provide grants to local agencies and nonprofits for housing rehabilitation and technical counseling — also got $50 million.

The budget also includes another $50 million for a grant program that helps homeowners build ADUs — a move that’s very much in line with state politicians’ multi-year push to encourage more development of the granny flats.

In recent weeks the budget discussions between Newsom and Democratic leaders had mostly been hung up because of a late push by the governor for new legislation to ease CEQA requirements in order to streamline major infrastructure projects. In a compromise, the governor agreed to remove a controversial $16 billion underground water tunnel project from the legislation.

The budget deal also adds $1 billion into a statewide homelessness fund, the same amount allocated the previous two years.