Another in the growing list of “Dumbest Ideas Ever”, California is proposing (amongst a host of other idiotic reparation ideas) a program in which the state would co-purchase a home with you!

In a wacked idea that could go wrong for a whole host of reasons, California Democrats think this is the way to bridge the home-ownership gap between white people and black folks, who may or may not have been descendants of slaves in America. From CalMatters:

“Senate Democrats have a more radical idea. Under their pandemic recovery budget blueprint released last month, the state would partner with first-time homebuyers to buy through what they’re dubbing “California Dream for All.” The state would pay, and own, up to 45% of the home, cutting the purchase price for people by nearly half. For example, a family could buy a $400,000 home for $220,000 under the program.”

After I quit laughing, I couldn’t help but think, for the 9,867,000th time… I’m so glad I’m freaking out of that state!!  Firstly, where in BFE California can you find a house for $400,000 anyway??!!

A million years ago, I lived in Beautiful Downtown Burbank for over a decade.  Towards the end, I spent a year with an internal dialogue shouting “GET OUT NOW”.  I had many of these conversations out loud with my mother; so often in fact, that at one point she asked me: “Baby, I have to ask.  Is the law after you??”

I just explained that all I wanted as a divorced woman in her mid-30’s was to buy a home and get on with my life.  And there was no way in hell that was going to happen in Los Angeles.  For example, I asked my landlord what it might cost to buy her out of the duplex we shared.  Mind you, this was a 1940’s house that had been subdivided, re-combined, subdivided again, and needed electrical work for days just to untangle where her electricity ended and mine began.  She told me it was just less than a million dollars.  Ummm, no. And that was in 2005.

Over the years, I have kept an eye out for random California legislation that boggles the mind. I think the first was when they banned the plastic shopping bags. Then it was the plastic straws. Then it was the tiny plastic shampoo bottles. Like seriously, I just remember thinking, in what dystopian world do these politicians want their citizenry to live in?  Do they lay awake at night thinking of new ways to suck the joy out of life?

I mean these aren’t as crazy as having to get a permit in San Diego or Carmel in order to wear shoes higher than 2 inches!  Or in Berkeley, beware the lost canary!  You can’t call for your little baby until after 7 a.m.  In San Francisco, it is not legal to carry bread, cakes, or pastries that are intended for human consumption in open baskets or exposed containers. But just in case you are too stupid to tie your own shoes, California actually passed a bill mandating companies WARN YOU that “Drilling, sawing, sanding or machining wood products can expose you to wood dust”! I $#&! you not.

In more recent times, just in case the illegal immigrants skipping thru the desert don’t find the bread crumbs the California Assembly left for them, they decided (in their infinite wisdom) to induce them over with tax credits.   Yes, in 2020, AB 1876 passed, making California’s Earned Income Tax Credit available to all [illegal] immigrant tax filers.  I mean, that might only impact about 12 families a year, ’cause how many illegal immigrants are really looking to draw attention to themselves by filing their taxes???  But still. As they create sanctuary cities and tax incentives…what do you think happens?  They create a flood of new impoverished people that need housing.

“Caution Economic Refugees” by jonathan mcintosh via Creative Commons, cropped and modified

But besides being one of the largest transfers of wealth from one set of citizens to another, (a salvo of guilt by government mandate) how is this not going to go all kinds of sideways if passed? Close your eyes and imagine it:

Little Johnny and Little Sally stick out their hand to Grandpa Government to buy a 1200 square foot cottage for the low, low price of a million dollars. If California is going to cover 45%, that means the loan would be $550,000.  Of course, let’s not forget that California is going to chip in $11K of the $20K down payment. In total, Grandpa Gov’t is shelling out $461,000 towards their home. In exchange for this little investment, the government intends to essentially co-own the house with you. What could go wrong with that?

The happy little couple is still responsible for 100% of the maintenance costs, property taxes, and insurance premiums. 

1. What happens if they can’t/won’t maintain said home? 
2. What if they use it for a meth lab and it blows up? 
3. What if they can’t afford those taxes and insurance over time? 
4. What is the process for de-coupling the loan if it goes into foreclosure?
5. How hard will it be for someone to sell this co-owned home with the government? 
6. What happens if they want to get divorced?
7. What if the home-buyer dies? 
8. Can this joint venture even be passed on to an heir?
9. What developers are going to cash in on these government sponsored units?  Because there is no way in California that there won’t be graft along the way…
10. Hold my beer!

“Bang head here!” by patrickdevries2003 via Creative Commons, cropped and modified

Or, let’s try this on as another reason this is stupid beyond all measure: THIS WILL ONLY INCREASE DEMAND in an already supply restricted situation. As a result, prices will only continue to go up and continue to keep the average home-buyer outpriced from the market. Even WITH Grandpa Government’s help.

As Reason Magazine points out:

“[T]his new program would produce no improvement in housing affordability, and potentially make the problem worse for those who don’t end up qualifying for subsidies. It would also be a massive gift to current homeowners who’d see the value of their own homes increase, exacerbating the racial wealth gaps the program is intended to eliminate.”

Senate Democrats released their budget priorities for this year. Here are the main housing elements: pic.twitter.com/PTq0Zy7D6q

— Louis Mirante (@louismirante) April 14, 2021

If the California Assembly were serious at all about making homes more affordable, they would make it easier to build new houses! It’s really that simple. 

California has some of the most restrictive zoning laws in the country.  Of the top 10 restrictive cities in the country, California has three, with San Francisco coming in at #1.

California flat out doesn’t build enough homes to keep up with demand.  As local news KQED reports below – for every 1000 moving into the state, only 300 homes get built.  Why you might ask?

Because the Democrat-led assembly in 1978 (this is during Governor Moonbeam Jerry Brown’s FIRST term) passed Proposition 13.  Prop 13 caps how much local governments can collect from property taxes.    

“Imagine you’re a city, sitting on a huge plot of vacant land. You could zone that land for housing or for commercial use, like a hotel or a Target. Your city obviously needs more housing — prices are sky high.”

What do think they would do? Choose the commercial tax opportunity which isn’t limited by Proposition 13?  Of course they would! No soup for you!

They make it mind numbingly difficult to get approval for new construction:

• –Multiple layers of government review
• –Lots of opportunity for residents to shout “Not in my backyard!”
• –Mandatory environmental impact studies that can take 2 1/2 years to complete
• –Local growth inhibiters that expressly limit the number of new homes that can be built each year

I mean, if you do everything wrong… and I mean EVERTHING wrong in your policy-making to make housing prices unattainable this is what it would look like. And now they just want to make it WORSE by incentivizing more demand on the backs of the tax-payer.

Look, over and over again, we have seen where Government Good Intentions lead to horrible unintended consequences. For example, we’ve watched that play out with sky high college tuition, Obamacare and the ever-increasing premiums, and the “War on Poverty.” 

As Ronald Reagan once said, “The most terrifying words in the English language are: I’m from the government and I’m here to help.”  Whatever cockamamie idea this Assembly cooks up for reparations is going to be KRAZY, but this part in particular will have the exact opposite effect of what they intend.

Feature Photo: “Day 4 – Paying off debt” by quaziefoto via Creative Commons, cropped and modified