California’s housing experiment: Make it easier to buy a home without making the home itself cheaper.

California just approved a $25 billion housing experiment that lets buyers borrow most of their down payment. Create more demand on weaker borrowers. What could go wrong?

And that, kids, is how price of homes goes up due to Govt intervention. Same as price of education and healthcare.

— Aseem (@aseemchandra) November 6, 2026

Today, California voters approved Proposition 37 with 61.4% of the vote, authorizing up to $25 billion in revenue bonds to finance as much as 17% of the purchase price of qualifying newly built homes. Buyers contribute at least 3% themselves. On an $800,000 house, that’s $24,000 upfront and another $136,000 borrowed through a second mortgage. The program is aimed at households earning up to twice their area’s median income, and the loans must be repaid through monthly mortgage payments. But that’s only part of California’s housing borrowing spree. Voters also approved Proposition 1, authorizing another $11.25 billion in bonds for affordable housing, homelessness programs and rental construction. Meanwhile, California’s housing affordability crisis remains so severe that only about 19% of households could afford a median-priced home in the third quarter of 2026. Realtors contributed $14.8 million to the Proposition 37 campaign, while a separate group, Building a Better California, contributed $6 million. The state is now betting that billions in additional financing will help solve a housing crisis driven partly by prices and a shortage of homes. But if buyers have access to more borrowed money while supply remains constrained, how much of that assistance will simply get absorbed into higher home prices?

Not only are they giving loans to people who probably can’t carry them, they’re exempting the builders from construction defect liability in exchange for higher labor standards for the carpenter’s union (higher wages, higher fines for violations).

So they’re building shitty…

— Elizabeth Barcohana (@E_Barcohana) November 6, 2026

Proposition 37 election results: https://www.kqed.org/elections/results/california/proposition-37

Official Proposition 37 details and $25 billion bond authorization: https://quickguidetoprops.sos.ca.gov/propositions/2026-11-03/37

Legislative Analyst’s breakdown of the second mortgage and repayment structure: https://www.lao.ca.gov/BallotAnalysis/Proposition?number=37&year=2026