Earlier this week, Governor Gavin Newsom unveiled the California Comeback Plan. This plan encompasses several pieces of legislation that outlines a comprehensive strategy to combat the housing crisis. This marks an enormous legislative effort to control these costs.
What’s in it?
The plan includes provisions from several bills, working together to come to a $22 billion investment. Overall, the plan from the governor’s office emphasizes four “key areas,” which are:
- Easing the ability to build new homes
- Removing obstacles to affordable housing projects
- Highlighting the principles of fair housing
- Increasing accountability for local governments
The governor’s office hopes these efforts will slow the skyrocketing real estate costs in the Golden State, creating more equitable and affordable home solutions.
Some of the budgetary notes include plans to build:
- 84,000 affordable homes
- 44,000 new units and beds to assist the homeless
- $850 million in incentives for smart growth
- $100 million to programs promoting homeownership
Additionally, municipalities must meet strict goals to demonstrate their progress in the key areas above.
How will this affect the current market?
This is an ambitious, wide-reaching plan that will inject money into an underserved market in the area. There is no way to tell, at this time, if the efforts will find success. If it is successful, we may see the end of the sky-high home and property prices we’ve seen in California over the years.
The ability to build more homes for lower-income brackets can still be highly lucrative. While eye-popping real estate prices are always of interest to builders, a volume-centric strategy can also yield strong outcomes.
Watching the market, watching the future.
As with any massive spending package at the state or federal level, patience is a virtue. While we aren’t sure what will happen soon, wise investors will position themselves to benefit from whatever comes.