Proposition 37: What California's Downpayment Loan Measure Would Mean for Jewish Families

The LA Jewish Home

7 hours ago

3 min read

Supporters of a statewide ballot measure argue that many working Californians can afford a monthly mortgage payment but cannot save enough for the down payment. For Jewish families who want to live near their shul, their children's school and their parents, that gap is a familiar one.

Proposition 37, on the November 3 statewide ballot, is aimed at that gap. It would create a state program offering loans to help middle-income Californians cover the down payment on a newly built home.

The measure has drawn attention in Jewish communal writing. On October 15, the Jewish Journal published a commentary connecting Proposition 37 to the future of Jewish life in Los Angeles, arguing that housing costs affect whether younger families can stay near grandparents, whether educators can live near schools, and whether congregations can keep generations together.

The last day to register to vote in the November 3 election is Monday, October 19. Californians who miss that deadline can still register and vote conditionally at a county elections office or vote center through Election Day, according to the Secretary of State.

What Proposition 37 would do

According to the Legislative Analyst's Office and the official voter guide, the measure would:

Authorize up to $25 billion in revenue bonds. The California Housing Finance Agency (CalHFA) would decide how much to issue and over what period.
Create a "middle-class homeownership loan." Each loan could cover up to 17% of the home's price, as a fixed-rate second mortgage. Buyers would still need to put down at least 3%.
Require repayment. This is a loan, not a grant. Homeowners' monthly payments would repay the bond investors and cover the program's administrative costs. CalHFA would be required to keep interest costs for buyers as low as possible.
Apply only to new homes. Eligible homes are new construction or the first sale of converted nonresidential property, and the buyer must be the first purchaser. Prices must fall below a cap of about $1 million to $1.5 million, depending on the county, adjusted each year.
Set buyer requirements. Borrowers must have lived in California for one year, live in the home, and earn less than twice their area's median income.

The measure also lets developers choose a "qualified builder option," which requires higher labor standards in exchange for different construction defect rules.

The Legislative Analyst found no direct cost to the state or local governments, because homebuyers' payments, not the General Fund, would repay the bonds.

Who supports it, and what is still unknown

The ballot argument in favor was signed by Danny Curtin of the California Conference of Carpenters, CalHFA board member Fiona Ma, and David West of the California State Commanders Veterans Council. It lists the California Teachers Association and the United Nurses Association of California among supporters, and quotes State Controller Malia Cohen saying the loans would be funded by private bond investors and repaid by borrowers rather than taxpayers. No argument against Proposition 37 was submitted for the voter guide.

The Legislative Analyst flagged three things that cannot be known yet:

How much demand there will be from investors to buy the bonds
How the cost of these loans to homebuyers will compare with other down payment assistance programs
Whether the program will actually lead to more homes being built and bought

The Los Angeles Jewish picture

The housing pressure on local Jewish families has been documented before. Writing in the Jewish Journal in August, Lisa Ansell, associate director of the USC Casden Institute, cited the 2021 Study of Jewish LA: 27% of Jewish households in Los Angeles spent at least 30% of their income on housing, rising to 59% among households that described themselves as financially struggling. She noted that observant families must live within walking distance of a shul, often in the region's most expensive neighborhoods.

Because Proposition 37 applies only to newly built homes under a county price cap, a key question for Jewish families is whether such homes will be available in or near the neighborhoods where they daven and send their children to school. The official analyses do not address that question, and they do not say when buyers could begin applying if the measure passes.