I’m introducing a Senate bill to address California’s housing crisis | Opinion
For the first time in our state’s history, California has the chance to remove a constitutional barrier that has been getting in the way of us solving our housing crisis. And the best part is that it won’t cost taxpayers a dime.
Since the 19th century, California’s Constitution has prohibited the state from using its own credit to back loans or bonds for housing construction. As a result, unlike the state of New York or even our own federal government, California has been unable to step in and support housing development, sitting on the sidelines while high interest rates and unstable markets scare off private investment.
It’s hard to believe that there are over 500,000 affordable housing units ready to be built in California, but they’re stuck in the pipeline — trapped in a financing bottleneck, stalled by soaring borrowing costs and a system too complex to navigate.
California can’t afford to stay stuck.
That’s why I’m authoring Senate Bill 750 and pursuing a constitutional amendment that will let voters decide if they want to unlock billions in investment to finally jumpstart stalled projects and build countless affordable homes, by using California’s credit to back housing construction. SB 750, The California Housing Finance & Credit Act, is a first-of-its-kind housing finance solution that would use the state’s credit — not our general fund — to guarantee loans and municipal bonds for housing developers. By doing so, we’d cut through red tape and revive stalled affordable housing projects (mixed-use, single-family, for-sale and for-rent) without adding to our state’s budget deficit.
Despite sweeping proclamations that pretty much every community in California needs more housing, data on the construction of new housing is outright dismal.
Case in point: In the City of Los Angeles, the issuance of permits to build new housing has plunged by 57% in the first quarter of 2025 compared to the year prior. A big part of that is due to persistently high interest rates, which make new construction near impossible to pencil out.
Statewide, new housing starts were down 17% from last year. If this negative direction holds, California residents, already struggling to keep up with limited housing supply and increasing rents, will get steamrolled.
Consider this: Renters now dominate the market in California. Approximately 44% of California households are renters — and that number is rising. The renting trend is particularly high in major urban centers like Los Angeles, San Diego, San Jose and San Francisco, where renters form a majority. The high cost of homeownership, including mortgage payments and down payments, contributes to this trend, pushing many residents toward renting.
Renters also tend to be younger, more racially diverse and have lower incomes than homeowners. And in California, renters are “cost-burdened,” meaning they spend a large percentage of their income on rent, with some spending over 50%.
While SB 750 and its constitutional amendment are novel in housing finance, California is already home to a similar program, the Health Facility Construction Loan Insurance Program, established in the 1970s. That program has insured billions in loans and municipal bond issuances for the development of health care facilities. In fact, this program has guaranteed $9 billion in private financing across hundreds of projects, driving down the cost of debt by using California’s credit to build life-saving health care facilities across the state.
The program charges modest fees to borrowers, and has generated more than $100 million in profit for the state. Not only does this program not cost the state or taxpayer anything, it actually makes money.
We can do the same for building affordable housing.
Sen. Dave Cortese represents District 15, encompassing much of Santa Clara County in the heart of Silicon Valley.