A $25 billion statewide bond measure headed for the November 2026 ballot could pave the way for middle income Davis families to purchase new homes in Village Farms Davis with only a 3 percent down payment via an innovative new statewide program that would create no cost burdens for City of Davis or California taxpayers.
Backers of the measure have already submitted 920,000 signatures to send the California Middle Class Homeownership and Family Home Construction Act to the voters, well in excess of the 546,652 signatures needed to qualify it for a November 3, 2026 vote. About 2,300 registered voters in Yolo County signed petitions to send the measure to the voters.
“We are excited about this promising new ballot initiative,” said Sandy Whitcombe of the Yes on V campaign. “If it passes, this program could be the key for the many young families who can afford monthly payments for a modest home but haven’t been able to save up tens of thousands of dollars for a 20 percent down payment — a goal post that keeps moving further away from them as home prices increase. Village Farms Davis was designed with a diverse mix of new housing options for the missing middle, and it appears most of the homes would qualify for this downpayment assistance.”
The full text of the measure can be found via the link below. It would authorize the issuance of new state revenue bonds that would be sold to spur the development of additional housing within the financial reach of middle income families.
Currently, down payment requirements of as much as 20 percent are a formidable barrier for middle income families wishing to buy a home. The ballot initiative would help overcome that problem by providing down payment assistance equal to 17 percent of the purchase price of a new home. Homebuyers would make a separate 3 percent down payment out of their own pockets. A family would be obligated to pay back the state assistance it received over time, but at a much lower interest rate (perhaps 3 percent annually) than conventional loans (now about 6 percent).
The initiative would benefit future Village Farms Davis homebuyers. The majority of the homes planned there (over 1,000) would range in size from 900 to 1,600 square feet. Based on current housing market conditions, with home costs in Davis averaging $500 per square foot, expected home values would range from $450,000 to $800,000.
Absent this new program, a conventional loan to buy a home in the middle of that range, or $625,000, might require a 20 percent or $125,000 down payment. This measure would allow that family to close escrow with a $19,000 down payment. They would be obligated to repay that 17% contribution over time, but would overcome what, for many families, is a crushing barrier to home ownership — the up-front six-figure cost of a down payment.
The initiative generally permits a family earning up to 200 percent of the average monthly income of their county of residence to qualify for this kind of down payment assistance. Accordingly, a family of four in Yolo County with an annual income of as much as $271,800 could get down payment help under this measure. However, families with much lower income levels would also benefit from this new program.
In the example above involving the purchase of a new $625,000 home in Village Farms Davis, an annual gross income of about $160,000 a year would be sufficient for them to buy that home and pay their loans, property taxes and homeowners’ insurance. That’s an affordable 30 percent of their monthly income for a family earning about 20 percent above the county average.
Similarly, with the help of this new program, a family of four could buy a $450,000 starter home in Village Farms Davis with an annual gross income of $135,900 — the average income of families in Yolo County. The combined cost of their loans, property taxes and homeowners’ insurance would be a very affordable 27 percent of their monthly income.
The ballot initiative only applies to purchases of new homes, not existing ones, and the price of any homes bought under this new state program would be capped (in Yolo County, at a little over $1 million). The purchasers must have been California residents for at least a year and must occupy their new home, not buy it and then rent it out. But program participants would not have to be first-time homebuyers, as other such programs often require.
Will this initiative pass? It has a very strong chance of succeeding. The ballot campaign is being led by an LA political powerhouse, former Assembly Speaker and former Senate leader Bobby Hertzberg. Hertzberg has assembled a formidable coalition to campaign for the measure that includes housing advocates, realtors, bankers, builders, and the carpenters union. Polling shows it has strong voter support, driven, undoubtedly, by widespread public concern over the affordability of housing in California.
The nonpartisan Legislative Analyst’s Office found that the bond measure would have no direct fiscal impact on state and local government costs. That’s because it would be financed with revenue bonds paid back entirely by homebuyers, not taxpayers, who would also cover all costs for the state agency that would administer the program. The passage of Herzberg’s measure could also allow the City of Davis to finally ditch the idea of creating and running its own down payment program at a time when the city is dealing with a multi-million dollar funding shortfall.
A separate $10 billion housing bond by the Legislature will also likely to go before statewide voters in November. It would use state taxpayer funds to provide affordable housing assistance mainly for low-income Californians. Herzberg also supports that measure, believing that it is important to help both low- and middle-income families harmed by California’s persistent failure to build enough new homes.
The Hertzberg measure mandates that his new program be put in place within a year after voter approval, or by 2028. That’s just about perfect timing for Village Farms. The measure allows local builders to voluntarily opt into the program and put Davis homebuyers at the head of the line for state help.
This stunning surprise move by Herzberg and his allies to qualify this innovative measure for the ballot has handed City of Davis voters an unparalleled opportunity. If voters greenlight Village Farms and Hertzberg’s measure, the door would be wide open for many middle income families to obtain generous down payment assistance and buy a new home here. The measure would likewise benefit Willowgrove, another local housing proposal, as well as some other housing projects that are planned.
Lest we forget, there’s an additional side-benefit of all this: The arrival of a number of new Davis families would almost certainly result over time in a surge of new student enrollment into Davis schools that could thwart the closure of Patwin and Birch Lane.
Dan Carson is a former Davis City Council member and city commissioner with a 45-year career in journalism and state and local government service.
What could go wrong? This has the smell of 2008.
Where would the state loan be in line if the home goes into foreclosure?
And why would this program only be for brand new homes?
So doing a quick dive into who is backing this initiative I came across this:
“backed by the California Association of Realtors, union carpenter groups and the initiative is led by “Building a Better California” committee.
So now I see why it’s for new homes only.
Looking into “Building a Better California” it’s a whole other can of worms:
“Building a Better California
This political action committee, officially formed in January, has emerged as a major anti-tax group for tech executives and other business leaders. The group, focused on regulatory reforms that would ameliorate the state’s housing crisis, is also sponsoring three tax-related initiatives that, if they qualify for the ballot and are approved by voters, would compete with various parts of the billionaire tax. Building a Better California is paying a whopping $15 bounty for signatures on its proposals (more than three times the going rate last fall).
Building a Better California has reported $35 million in contributions, with $20 million donated by Sergey Brin, co-founder of Google. Other supporters include former Google CEO Eric Schmidt ($2 million), Stripe CEO Patrick Collison ($2 million), and venture capitalists John Doerr ($2 million) and Michael Moritz ($2 million). Moritz is also chairman of The San Francisco Standard.”
https://sfstandard.com/2026/03/09/california-billionaire-tax-2026-supporters-opponents/
“The arrival of a number of new Davis families would almost certainly result over time in a surge of new student enrollment into Davis schools that could thwart the closure of Patwin and Birch Lane.”
Families with kids aren’t going to move to a 900 square foot attached house – “full stop” as they say.
But again, where are these families supposedly coming FROM? And what impact would that have on THOSE school districts – the majority of which are likely facing declining enrollment as well? (Or, do supporters of sprawl simply not care about that?)
We already know what the cost of new builds are in Davis, since it’s occurring right now. $795K for an attached house with a tight/long shared driveway, and $890K for a detached house (Pole Line Terrace and Harvest Glen, respectively). With essentially no yards, of course.
“Families aren’t going to move to a 900 square foot attached house ”
I did.
I probably would too, if I got a subsidized deal like you did.
But that’s not available for most (and even then, I’m not sure that most families would be willing to do so). Those who pay market rate are going to compare what they can get in the pre-existing housing market, vs. a new house (in Davis or Woodland). And they’ll pick Woodland due to the price differential and ability to send their kids to DJUSD, regardless. The evidence for that already exists.
Though as previously noted, the best deal would be a pre-existing house in Davis.
That’s not to say that a 900 square foot attached unit won’t sell – it just won’t be to a “family”. (More likely, it will be occupied by a UCD student.)
The average new home is now 2,163 square feet. A 1600 SF house has 4 bedrooms which is sufficient for a family, which is within the range that the article mentions. A 1300 SF house has 3 bedrooms. A two bedroom at 900 SF is sufficient for a young family just starting out. This targets new housing that hasn’t been built for a long time because these households have been closed out of the market.
https://fred.stlouisfed.org/series/COMPSFLAM1FQ
“A two bedroom at 900 SF is sufficient for a young family just starting out.”
That’s what’s known in the “industry” as b.s.
If ANYONE buys a house like that, they’d better not be planning to have kids (unless they want to pay a lot of realtor and other fees when they move in a couple of years).
There’s no such thing as a “starter home”. That’s an industry-created term. There’s only “houses”.
If it was up to the realtor association, everyone would start out in a “starter home”, then move up to a “family home”, then downsize back to a “starter home”. Paying 6 commissions along the way (buyer/seller agents), as well as a lot of other fees/costs.
Hertzberg said he deliberately structured the measure to stimulate a sizable private sector investment in the construction of housing for middle income families. Each 17 percent of down payment assistance provided up front with the revenue bonds leverages a 3 percent downpayment from that homebuyer and the equivalent of 80 percent from the builder. So that $25 billion over time results in a $150 billion investment in housing, ultimately all paid back by the beneficiaries in monthly mortgage payments. Ultimately such an expansion of housing availability can indirectly help make housing more affordable for buyers of existing housing.
CHFA has a stellar track record of running a number of different housing programs. And the language of the bond measure states explicitly that taxpayers are not on the hook if a recipient fails to make payments, resulting in a foreclosure. This is a revenue bond issue, not a general obligation bond issue. It’s up to voters to decide if they want to support this. Early polling suggests they will.
So, if homebuyers are ultimately responsible for paying it back, how does that make the housing more affordable? (Other than a potentially artificially-low interest rate?) And if the interest rate is artificially low, who would be buying the bonds?
And as Keith asked, why is this only reserved for “new” housing?
I answered Keith’s question about why the measure was focused on new housing above just before you posted, Ron.
As explained above, the benefit to a program participant is that they would be able to get into a home without having to amass a six-figure down payment. It is a real barrier to many middle income families.
I see – it’s to spur construction (not necessarily to help homebuyers, since the vast majority of sales are for pre-existing housing). So in this case, the backers have decided to try to juice the market in support of new housing (which competes with pre-existing housing). If I was trying to sell a house, I’d find this to be an unfair practice.
Overall, it sounds like what Keith noted – encouraging people to buy houses they actually can’t afford (and possibly even driving up the price). I would also suspect that since an additional market-rate loan would be required, those lenders aren’t going to be too keen on having a second mortgage on a property right from the start.
I would also think that there’s some kind of cost of administration, regarding these proposed loans.
And if there is another housing meltdown (upside-down equity), it would be interesting to know “who” exactly loses in that scenario.
Yes, we need new housing so this is targeted at new housing. We have a housing cost crisis created by a lack of sufficient supply. This measure is intended to address that problem.
An important difference is that the subprime crisis in 2008 was created in large part by adjustable rate mortgages (ARM) that suddenly increased the cost of housing for owners. For this proposal to work, the lenders must be required to issue only fixed rate mortgages. Those mortgages will assure owners of constant housing costs. I presume that these loans may have higher interest rates to reflect a different credit risk profile.
“Yes, we need new housing so this is targeted at new housing. We have a housing cost crisis created by a lack of sufficient supply. This measure is intended to address that problem.”
This is perhaps the biggest, most-corrupt lie ever told. There is no lack of supply. There’s a university study which proves that, and it was created several years ago at this point (before a LOT more housing was constructed despite “no” population growth).
Ever notice how the housing shortage people never tell you how they come up with that lie?
As always, like most of these initiatives, you have to follow the money.
That’s the first thing I look at these days. Most initiatives that end up on a ballot do so because of some group’s self-interest; not the public’s interest at large.
There’s almost no “grass roots” effort in politics, anymore. Not sure there ever really was, but it seemed at least somewhat better in the “old days”.
In “Rebels Without a Cause” (on PBS), the development interests didn’t initially understand that they were fighting people who weren’t being paid (and also couldn’t essentially be “paid off”) – but were nevertheless exceedingly committed to the “cause”.
The difference here, though, is that this expansion of housing availability will occur without a taxpayer subsidy but will instead occur through the private sector purchase of revenue bonds.
Saving enough for a down payment is a big obstacle for new home buyers. Down payment assistance programs have been around for a long time. They work. This appears to be a workable model and would be very helpful for getting new home buyers into the difficult Davis market.
Back in a few hours to go on an Easter bike ride with my sons. Happy Easter.
” . . . create no cost burdens for City of Davis or California taxpayers . . . ”
Oh Bulls**t . . . what a fraud and what a scam.
“California Middle Class Homeownership and Family Home Construction Act”
When I read a name like that, I vote NO. Creating free stuff for people! It should be called the “Housing Market Tipping and Crashing Act”.
You can’t create free money. And this only goes for NEW – so who does that benefit? The UNIONS and the DEVELOPERS, not the single-house owners. And since NEW will now be SUBSIDIZED, the price of OLD homes will have to be lowered in value to compete with the new stock.
So people up to a certain income will be able to get this MASSIVE discount, and people above that income but not MASSIVELY RICH will be SCREWED. Another government program that screws people above the magic line the government creates, in order to fund everyone below who can’t afford it. Once again, an incentive to be a little successful, but not too successful. You aren’t screwing the rich, you are screwing working people above a certain income range. You are distorting the market in order to pander to your voting base. For shame.
And seriously, trying to promote Village Farms in June using a terrible initiative that might or might not pass half-a-year later? For shame.
And seriously Village Farms people — why are you using Dan Carson as a promoter of your project in any way whatsoever? Are you mad? We have not forgotten the last time he ‘promoted’ a project; and he’s a main reason that last project failed to pass. Way to shoot yourselves in the foot.
REALITY CHECK
Dan Carson said … ”A family would be obligated to pay back the state assistance it received over time, but at a much lower interest rate (perhaps 3 percent annually) than conventional loans (now about 6 percent).”
and
” The nonpartisan Legislative Analyst’s Office found that the bond measure would have no direct fiscal impact on state and local government costs. That’s because it would be financed with revenue bonds paid back entirely by homebuyers, not taxpayers, who would also cover all costs for the state agency that would administer the program.”
To reality check the collective meaning of those two statements, I started by checking what the current interest rate is for State of California bonds. Here is what I found. As of March 31, 2026, California municipal bond yields show a 1-year return of 4.29% for general obligation bonds, with 3-year returns around 5.74%.. Both those rate percentages are higher than Dan’s 3% speculation, and when you add in the costs of the State agency that would administer the program, the 4.29% almost surely goes well over 5% and the 5.74% goes well over 6%.
Those realities indicate that Dan’s hopes are spin more than anything else.
Bob Hertzberg, the lead author of the initiative who is working directly with prospective bond investors, disagrees. He says they may be able to sell bonds with interest rates as low as 2 percent:
“Many Giving Pledge individuals, tech companies, social impact funds and foundations have prioritized resources for housing. Our expectation is that once this Measure passes, we will ask these investors to buy the Revenue Bonds at a deeply discounted rate of 2-3%. Instead of building new rental housing, investors could buy the Revenue Bonds and allow homebuyers to reduce their mortgage and make monthly payments more affordable. The idea is there is a “war on the middle class” and these bonds are “war bonds,” so-to-speak. This is an opportunity for philanthropic entities to help create a shared prosperity with the middle class.”
Here’s information on the Giving Pledge organization he references: “Founded by Warren Buffett, Melinda French Gates, and Bill Gates, the Giving Pledge launched in 2010 to unlock resources to address the world’s most urgent issues. Since then, more than 250 of the world’s wealthiest philanthropists from 30 countries have made that promise….The Giving Pledge is a promise by the world’s wealthiest philanthropists to give the majority of their wealth to charitable causes in their lifetime or wills.” Buffett has promised to donate 99 percent of his assets to charity in his lifetime. Another major Giving Pledge by just a single less well-known billionaire, Chuck Feeney, was for $8 billion.
The measure states that bond proceeds could be used for CHFA administrative costs, mainly for administering the bonds themselves, and for creating a reserve fund to address any loan foreclosures. Bond rates would not be increased for this and state taxpayers will not bear any costs.
By design, the banks who underwrite the loans would handle by far most of the administrative work for implementing this loan program. The beneficiaries of the down payment assistance would pay a flat loan application fee of $290, so those costs would not affect the bond rates either. The origination fee would be the equivalent of .05%. Why would a banks assist a public program in this way? Doing so qualifies them to receive credit under the Community Reinvestment Act. The Community Reinvestment Act (CRA) of 1977 is a US federal law designed to encourage depository institutions to help meet the credit needs of their entire communities, particularly low- and moderate-income (LMI) neighborhoods. It requires regulators to assess how banks serve their areas and to consider this record during applications for mergers or branches.
Current rates for long-term bonds do seem to be up a little, with some indications that the Iran War is affecting these investments. That will probably not be the case by the time the first tranche of these bonds is sold sometime in 2028. The data is clear that AAA-rated borrowers like the State of California get superior rates that are far below conventional interest rates paid by homebuyers. These bonds will likely be sold over many years, not all at once.
The repayments of the home purchase assistance provided under this program that will begin almost immediately upon implementation of the program will go back in the pool for new loans. This money too would be available to offset any program administrative costs.
Be sure you are looking at coupon rates, the actual interest rates stamped on bond coupons sold to investors, in considering the borrowing costs affecting future participants in this program, not some yield data that measures the future financial return to bond investors. That data is largely irrelevant to the costs for participating homebuyers. Also, long-term borrowing rates are what’s relevant here.
Dan Carson tends to look at life as a glass overflowing. That is definitely true in this case. I admire his optimism, but a little realism is in order.
For example long-term bond rates are typically higher than short-term bond rates. Investors demand higher yields (interest rates) to lock in their money for longer periods, which involves greater risk regarding inflation, interest rate fluctuations, and issuer default. Short-term bonds offer lower returns but higher liquidity and lower risk.
Unless I am misunderstanding the Herzberg proposal, these will definitely be long-term bonds … IF the measure passes
I agree with Matt. There’s almost no way this initiative doesn’t end up costing the taxpayer. It looks like it’s an attempt by the tech billionaires to shift the public away from the 5% wealth tax proposal which will cost them dearly.
Interesting. Keith are you for the wealth tax?