California leaders can expand homeownership opportunities. Here’s how | Opinion

California’s housing crisis commands attention from every level of government ― from local officials and state leaders to gubernatorial candidates. Yet, the conversation rarely centers on one of the most powerful solutions we have: clear, attainable pathways to homeownership. There’s more that legislators to do as they reconvene for the year.

Homeownership is not simply an asset; it is one of the most effective ways to provide true housing security, reduce economic disparities, build generational wealth and foster stable, thriving communities. As our state leaders work to expand housing supply of all types, they must also prioritize creating homeownership opportunities for today’s working Californians.

Homeownership remains the most reliable engine of generational wealth for working families. Over the past 33 years, California homeowners built approximately $165,000 in household net worth per capita (compared to roughly $6,000 for those who did not own a home during the same time period).

California’s diverse population, of which communities of color now represent the majority of residents and homebuyers, deserves the same opportunity to build wealth through homeownership that previous generations enjoyed. Homeownership helps Californians put down roots, raise families and invest in the California Dream.

But today, that dream is slipping out of reach. More than 80% of California families cannot afford to purchase a median-priced home, and the income needed for a first-time buyer has nearly doubled in the past five years — from under $70,000 to over $130,000. In comparison, however, wages have barely budged.

This affordability crisis is also affecting the nation as a whole, with the average age of first-time homebuyers reaching a record high ― now over 40 years old. Meanwhile, the median cost of a single-family home in California has jumped 24%, from about $712,000 to $884,000 over the last five years. Buyers who entered the market in November 2020 realized major equity gains, while millions of Californians remain priced out of homeownership.

The widening gap between incomes and the cost of housing is not just a household concern, it is a threat to California’s long-term economic stability. When essential workers can’t afford to live in the communities they serve, communities suffer. Families who can afford to purchase a home elsewhere, but not here, are leaving California altogether. Communities thrive when the people who serve them can put down roots and participate fully in civic life.

The California Association of Realtors, where I serve as president, appreciates the focus our state leaders have put on the urgency of the housing crisis. And while progress has been made, we encourage lawmakers to pursue targeted strategies to meaningfully expand homeownership opportunities.

Owner-occupied housing

First, make it easier to build owner-occupied housing. Frivolous litigation is delaying projects that are already approved, adding years of delay and making homes even more expensive. The legislature can address this by expanding California’s anti-Strategic Lawsuit Against Public Participation law protections for affordable housing to cover all housing types and deter meritless lawsuits intended solely to block construction.

In addition, the state should prioritize infrastructure investments that directly impact development of owner-occupied homes across the regions.

Protect existing housing

Second, protect the existing housing supply from corporate and institutional buyers who often rob first-time homebuyers of their chance to buy a home.

Gov. Gavin Newsom’s recent comments on corporate ownership recognize that families cannot compete with Wall Street for homes. Lawmakers should explore incentives that encourage institutional holders to transition single-family homes back to owner-occupancy, opening pathways that have narrowed in recent years.

Innovative initiatives

Third, help families take the first step toward ownership by continuing to fund innovative initiatives like the California Dream for All shared-equity program, which provides down payment assistance and reclaims funds after resale, making ownership attainable for first-generation and first-time homebuyers.

Low-interest financing programs, matched savings mechanisms and targeted tax incentives can also help close the affordability gap.

The California Association of Realtors represents 190,000 real estate professionals throughout the state committed to partnering with policymakers to expand homeownership, strengthen communities and ensure California remains a place of opportunity for the next generation.

Tamara Suminski is president of the California Association of Realtors and is an accomplished Southern California broker and realtor with over two decades of experience in real estate.