Bob Hertzberg: Prop 37 unlocks homeownership for middle class Californians
Throughout my years serving in the California legislature, one issue has dominated hearing after hearing: the inability of working Californians to afford homes. Nurses, teachers, veterans and small business owners face mounting obstacles as inflated prices and rising living costs place homeownership increasingly out of reach.
California leads the nation in innovation, with world-class universities, cutting-edge technology and groundbreaking research. Yet we have failed on what matters most—providing the security, comfort and safety that comes with owning a home. California's homeownership rate stands at just 55.8 percent, among the lowest in the nation, while median home values have exceeded double the national average for 13 consecutive years.
This is why I am championing Proposition 37, a citizen-initiated measure that qualified for the ballot in April 2026 after collecting more than 546,000 valid signatures. The proposition creates a straightforward solution to expand homeownership for middle-class families by enabling purchases with 3 percent down payments while stimulating new housing construction across California—all without taxpayer expense.
Breaking down the affordability barrier
The numbers tell a stark story. California's median home price reaches $800,000, while the national median sits at $356,000. Traditional financing requires 20 percent down—approximately $160,000 statewide. In Los Angeles County, that figure climbs to $176,000. In Orange County, it jumps to $211,000. A family earning the median income would need more than two decades to save such amounts.
Under Proposition 37, qualified prospective homeowners could save the required 3 percent in under five years. This represents real money and genuine commitment, but it falls within reach for disciplined families ready to buy.
The California Housing Finance Agency would administer the program, offering eligible buyers fixed-rate second mortgages covering up to 17 percent of the purchase price. Qualified homes must be newly constructed and priced below approximately $1.5 million, ensuring the program serves middle-income buyers rather than luxury purchasers.
Sound financing without taxpayer risk
When consulting housing experts and industry professionals, I prioritized getting the financing structure right. Proposition 37 employs state revenue bonds, not general obligation bonds—a critical distinction. Revenue bonds are repaid from project revenues and borrower payments rather than tax revenues, and they do not require voter approval in California.
Both the nonpartisan Legislative Analyst's Office and the Department of Finance confirm: Proposition 37 carries no cost to taxpayers. The bonds must be fully repaid by investors and home borrowers. No general fund backstop exists, and no surprise bills await down the line.
Addressing California's housing shortage
I have long argued that helping people buy homes without increasing supply merely drives prices higher. California faces a housing shortage estimated between 1 million and 3.5 million units, according to various analyses. The California Department of Housing and Community Development projects the state must plan for more than 2.5 million homes by 2031, including at least one million for lower-income households.
Proposition 37 tackles this directly by encouraging new single-family construction. Housing analysts project the initiative could generate more than 190,000 new homes, creating inventory for buyers and employment for construction workers while stimulating economic activity statewide.
The measure also includes provisions allowing housing developers to adopt higher labor standards in exchange for more flexible construction-defect rules, potentially removing additional barriers to new development.
Built-in accountability and protections
Proposition 37 is not a blank check. Borrowers must be California residents, meet income requirements, contribute at least 3 percent down, make monthly payments and occupy the home as their primary residence. The program requires annual state audits and includes consumer protections such as strict limits on bank fees and no early payoff penalties. Families participating in this program deserve fair treatment, and the measure guarantees it in writing.
No single solution will resolve California's affordability crisis overnight. The state needs more housing of every type, at every price point, in every market. But Proposition 37 represents a concrete step forward, offering tens of thousands of hardworking Californians the opportunity to own homes, build equity and remain in the communities they serve. After years of listening to what Californians need, I recognize a workable solution when I see one.
