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Key Takeaways from CCRE's Entry-Level Homeownership Panel
At CCRE’s April 28 panel, Rebuilding the California Dream: Pathways to Entry-Level Homeownership, moderator Phil Hawkins, C.A.R. CEO, guided a wide-ranging discussion on the market and policy restraints bottlenecking the onramps to homeownership in the state, as well as what can be done.
The panel featured:
Assemblyman Heath Flora, Minority Leader, California State Assembly
Senator Robert Hertzberg, Former California Senate Majority Leader & Assembly Speaker Emeritus
David Preiss, Partner, Holland & Knight
Emmanuel Proussaloglou, Co-Director, cityLAB UCLA
Senator Aisha Wahab, Assistant Majority Leader, California State Senate
Together, these state leaders, legal practitioners and housing experts discussed many factors impeding housing goals and outcomes across the state. Despite extensive legislative activity intended to spur housing production, meaningful gains in homeownership elude state residents, particularly for first-time buyers. As moderator Phil Hawkins observed at the outset, “I’m not sure anything’s working… we’re not seeing entry-level opportunities for homeowners.” This framing sets the tone for an incisive examination of California’s housing strategy.
The Need for Policies to Promote Homeownership
A central theme of the discussion was that recent state-level policy has not prioritized homeownership. Sen. Aisha Wahab explained that recent “policies have been more about development rather than homeownership or first-time home buyers.” Expanding rental supply may ease some market pressures, but it does not address the long-term objective of enabling wealth-building through ownership across many demographic sectors. In a state with relatively low homeownership rates, this imbalance has profound implications for inequality and economic mobility.
Affordability remains a key barrier, but the panel made clear that the challenge extends beyond headline home prices. Prospective buyers face a range of additional costs that complicate entry into the market. Sen. Wahab highlighted one such issue: HOA fees ranging anywhere from $500 to $700 a month. These recurring expenses, combined with high down payment requirements and rising construction costs, create a formidable barrier to entry. Even when down payment assistance programs exist, they are often limited in scale or constrained by eligibility requirements. Sen. Robert Hertzberg noted that such programs “have extraordinary conditions” and ultimately operate at too small a scale to meaningfully impact the broader market. As a result, many households remain locked out of homeownership despite having the income to sustain monthly payments.
Build What People Want
Another critical issue is the mismatch between what is being built and what prospective homeowners actually want. Much of California’s recent development has centered on large multifamily rental complexes, often in urban cores. Sen. Wahab underscored this point, stating, “we’re only developing multifamily complexes for renters, not home ownership opportunities.” Buyers frequently seek features such as parking, outdoor space, and layouts suitable for multigenerational living — needs that are not consistently met in current developments.
The regulatory environment further complicates the situation. California’s housing system is governed by a dense and evolving set of rules, which can be difficult to navigate even for experienced professionals. Emmanuel Proussaloglou explained, “every year there are dozens of state laws… it’s impossible to imagine a smaller developer really tracking all of these things.” This complexity disproportionately affects smaller developers, who often lack the resources to manage compliance. The result is a development landscape dominated by larger firms and large-scale projects, with fewer opportunities for the kinds of smaller, incremental developments that historically contributed to housing diversity.
This dynamic is closely tied to the decline of “missing middle” housing. David Preiss noted that this segment “hasn’t scaled enough to really bring in both larger developers as well as middle tier developers.” Missing middle housing — such as duplexes, triplexes, and townhomes — has traditionally provided more attainable entry points into homeownership. However, regulatory barriers, financing challenges, and legal risks have limited its production. Proussaloglou added that “that small-scale development ecosystem… isn’t really there anymore,” highlighting the structural nature of the issue.
In order to address this “missing middle” housing, Sen. Herzberg introduced a ballot initiative called the California Middle-Class Homeownership and Family Home Construction Act of 2026, which will be on the ballot in November. The measure, which C.A.R. supports, will authorize up to $25 billion in revenue bonds to offer secondary mortgages covering up to 17% of the purchase price of qualified new homes to help with the downpayment and some closing costs. Buyers would put forward a minimum of 3%, so that together the 20% downpayment eliminates the need for mortgage insurance. The measure would fund the program without the need for any taxpayer dollars. If passed, the measure is expected to spur new development by stimulating both buy-side demand and supply-side construction of middle-market homes.
Legal and financial risks also play a significant role in constraining development. The potential for litigation, particularly under environmental review laws such as the California Environmental Quality Act (CEQA), introduces uncertainty and cost. The financial impact can be substantial, especially for smaller projects. Additionally, construction defect liability has made condominium development less attractive, further reducing the availability of entry-level ownership options. These risks contribute to a system in which even well-intentioned policies struggle to produce tangible results.
State vs. Local Control
Some panelists also emphasized the importance of local context. Statewide policies often fail to account for regional differences in housing needs and preferences. Asm. Heath Flora observed that “a lot of legislation is intended well, but it doesn’t work in practicality,” particularly when applied uniformly across diverse communities.
Housing preferences in urban coastal areas differ markedly from those in inland regions, yet policy frameworks do not always reflect this variation. At the same time, local governments face financial constraints that shape their decisions. Development fees, for example, are often used to fund infrastructure, creating incentives that can increase the cost of new housing.
Amid these challenges, several panelists called for a renewed focus on the home buyer experience. Hertzberg framed the issue in practical terms: “What’s the experience of somebody who wants to buy a house? How do you make that simple… how do you reduce the risk?” This perspective shifts the conversation from abstract policy goals to the lived realities of individuals navigating the housing market. It suggests that effective solutions must address not only supply and cost, but also accessibility and usability. Simplifying the purchasing process, rethinking credit evaluation, and reducing upfront costs are all potential avenues for reform.
The Road Ahead
Looking forward, the discussion pointed to the need for a multi-pronged approach to revising housing policy. California’s challenges are multifaceted, spanning regulatory, financial, and social dimensions. Addressing each issue in isolation is unlikely to yield significant progress; instead, policymakers must consider how different elements of the system interact and design solutions accordingly. This includes supporting a wider range of housing types, enabling smaller developers to participate in the market, and aligning policy incentives with consumer demand.
To learn more about building pathways to homeownership in California, watch the full discussion.
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