California’s Senate Bill 750 Aims to Tackle Affordable Housing Crisis

News Summary

California is introducing Senate Bill 750 to amend the state constitution and use its credit to support affordable housing construction. By addressing longstanding financial barriers, this legislation aims to revive stalled projects and alleviate the housing crisis, currently affecting over 500,000 ready-to-build units. With significant challenges in the current housing market, including high borrowing costs and a decline in new housing starts, the bill seeks to provide guaranteed loans to developers. This initiative could transform vacant office spaces into residential units, promoting both housing development and economic growth.

California Takes Steps to Tackle Affordable Housing Crisis with Senate Bill 750

California is poised to make history by addressing a crucial barrier to affordable housing development through Senate Bill 750. This landmark legislation has the potential to remove a longstanding constitutional limitation that prevents the state from using its credit to support housing construction initiatives. The urgency behind this bill has been amplified as the state faces a significant affordable housing crisis, with more than 500,000 units of affordable housing ready to be constructed, yet stalled due to financial obstacles.

Constitutional Barriers and Financial Bottlenecks

Under the current California Constitution, the state is prohibited from leveraging its credit for backing loans or bonds aimed at housing projects. This has resulted in California lagging behind other states, such as New York and federal efforts, in facilitating new housing developments. The existing financing mechanisms are complicated and hinder progress, as high borrowing costs and elevated interest rates severely limit developers’ abilities to act on potential projects.

Senate Bill 750, also known as The California Housing Finance & Credit Act, proposes to allow the state to use its credit to back housing projects without affecting the general fund. This legislative move is designed to streamline financing for developers, enabling them to access guaranteed loans and municipal bonds, thereby revitalizing many affordable housing proposals currently enmeshed in financial bottlenecks.

Declining Housing Permits and Urgent Need for Action

The housing shortage is becoming increasingly evident, particularly in major urban centers throughout California. For instance, in Los Angeles, the issuance of new housing permits has sharply declined by 57% in the first quarter of 2025 compared to the same period last year. Statewide trends show that new housing starts have experienced a 17% drop, indicating a troubling pattern that necessitates immediate intervention.

With approximately 44% of California households consisting of renters, the pressure on the rental market continues to mount. Many residents find themselves “cost-burdened,” dedicating a significant portion of their income to rent—some even exceeding 50%. The pressing need for affordable housing has never been more critical, emphasizing the importance of legislative efforts like Senate Bill 750.

Successful Models and Economic Benefits

The proposed housing finance solution draws inspiration from the successful Health Facility Construction Loan Insurance Program initiated in the 1970s, which effectively supported the development of healthcare facilities. This existing program has guaranteed approximately $9 billion in loans and bonds, proving profitable for the state while imposing no costs on taxpayers.

Business stakeholders are actively exploring innovative approaches to mitigate the housing crisis, such as transforming underutilized office spaces into residential projects. With elevated office vacancy rates, particularly in downtown Los Angeles, the conversion of just ten key office buildings into housing could generate around $46 million in tax revenue and create over 3,800 residential units.

Potential Solutions and Building Code Changes

Despite its challenges, downtown Los Angeles remains a prime location for residential development, boasting an apartment occupancy rate of approximately 90%. To further encourage this trend, city officials are discussing financial incentives for developers to convert outdated office buildings into living spaces. Proposed changes to building codes would aim to simplify the conversion process for office buildings constructed after 1975, facilitating a more efficient transition from commercial to residential use.

As California grapples with a housing crisis, Senate Bill 750 offers a promising path forward. By removing constitutional barriers and fostering financial mechanisms, the state can unleash the construction of much-needed affordable housing. Addressing this issue will not only provide shelter for many California residents but also stimulate economic activity and enhance community welfare.

Deeper Dive: News & Info About This Topic

Additional Resources

• Los Angeles Times: Converting Downtown Offices to Housing
• Wikipedia: Housing in California
• Sacramento Bee: Opinion on Housing Crisis
• Google Search: California Housing Crisis
• Courthouse News: Reforms to Environmental Law and Housing
• Google Scholar: California Housing Crisis Solutions
• Newsweek: California’s Housing Crisis
• Encyclopedia Britannica: Housing Crisis
• San Francisco Chronicle: Housing Crisis Opinion
• Google News: California Housing