A controversial bill stirs debate in California. Will this bold move help or hurt the state’s financial future?
A Controversial Expansion
A bill authored by Fresno Democrat Joaquin Arambula seeks to expand the California Dream program to include all undocumented immigrants.
California Dream for All
The “California Dream for All” program is a state initiative designed to help first-time home buyers in California. The goal is to make homeownership more affordable by offering financial assistance.
Denying Opportunity?
Assemblymember Arambula says excluding “undocumented individuals” from programs like these denies them an opportunity to achieve financial security and personal stability.
Awaiting Senate Deliberation
The bill in question — AB 1840 — has passed on the Assembly floor and is awaiting Senate deliberation, where it is being met by staunch opposition, especially from Republicans.
Republican Pushback
“Assembly Bill 1840 is an insult to California citizens who are being left behind and priced out of homeownership. I’m all for helping first-time homebuyers, but give priority to those here in our state legally,” said State Sen. Briah Dahle in response to the bill.
Budget Concerns
The state Appropriations Committee has also expressed concern about the financial strain the bill will cause on the budget allocated to the program. Analysis shows that this cost could amount to millions annually.
Current Program Struggles
Even without the expansion to undocumented migrants, the numbers on the current state of things in the program are not exactly great.
Overwhelming Demand
This year alone, 18,000 people applied for the loan provisioned by this program. Only 1,700 got approved for a loan of up to $150,000. This highly improper ratio is a testament to the inadequacies the program is currently facing.
A Short History of California Dream for All
These issues have been coming for a long time. The program, California Dream For All, started in 2023. At its inception, $300 million was pumped into the program to help about 2,300 applicants. This budget was exhausted in just 11 days.
A Long-Term Gamble to Recoup Loans
The loan can be recouped if the home buyers decide to sell sometime soon. When this happens, recipients will have to pay the original loan amount as up to 20% of any increase in the home’s value.
The Migrant Surge Problem
The number of undocumented migrants flooding the state does not bode well for the bill that seeks an expansion to cover this ever-increasing population. Especially given the fact that Texas has moved to reinforce its borders.
Operation Lone Star
The action, dubbed Operation Lone Star, sought to put mechanisms in place to deny undocumented migrants from crossing into the country illegally, particularly from places vulnerable locations like Eagle Pass.
Migrants Redirect to California
With Texas staving off migrants from its borders, the distraught individuals have no choice but to redirect to Arizona and California borders. Further increasing the undocumented migrant population in these states.
Abbott’s Political Stunt
To add to this, Governor Greg Abbot keeps bussing migrants to sanctuary states like California. The culmination of these circumstances further surges the undocumented migrant population, which this housing program is supposed to cater to, according to the bill being advanced by the Fresno Assemblymember.
California’s Income Loss Problem
The coffers of the Golden State are also in a tough bind. Reports show that the state lost $2 billion in income tax due to outmigration. California currently tops the list of population loss due to State-to-State outmigration.
A Growing Strain on California’s Budget
The combined effect of California’s income loss and increasing migrant population further corroborates the analysis put forward by the Appropriations Committee regarding the financial bind the state could face should it pass this bill into law.
Not The First Time
AB 1840 is not the first bill to extend social and economic benefits to undocumented migrants. In December of last year, California became the first state in the union to expand its taxpayer-funded health insurance program — MediCal — to include undocumented migrants living in the state.
The High Cost of Healthcare Expansion
The cost of this healthcare expansion is expected to reach $3.4 billion this year as over 700,000 newly qualified migrants signed up for the program. With the situation at the border, more are expected to arrive, and this would drive costs even more as the program includes expensive procedures such as gender-affirming care.
Learning from History
President George W. Bush’s American Dream Downpayment Fund — a home down payment assistance program for low-income individuals — is often cited as a key factor in fueling the housing bubble that led to the 2007-2008 global financial crisis.
Will History Repeat Itself?
As California considers expanding similar programs to undocumented immigrants, could history repeat itself? This bill raises concerns about the potential long-term consequences for both the housing market and the state’s financial health.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.