‘Home Is Where the Wealth Is’: The Restoration of the American Dream

There’s no American dream without affordable housing. Unfortunately, in California a stifling bureaucracy has gotten in the way. The layers of competing special interests often result in an absence of meaningful housing  legislation. A ray of hope comes from Democratic former California Senate Majority Leader and Assembly Speaker Bob Hertzberg. Hertzberg is leveraging his years of work in the trenches of California politics to respond to the mounting pressures on middle-class Americans striving to own a home in our once golden state. 

After many attempts in the Legislature were stymied by competing demands of special interest groups, Hertzberg has taken the tough task of keeping our children in California into his own hands. By raising private funds to support the research and design of a completely different vision of funding middle-class housing, Hertzberg is attempting to bridge the gap between subsidized affordable housing and unaffordable market-rate options at little cost to California taxpayers. 

Over the past decades, soaring property prices, stagnant wage growth and limited housing supply have rendered homeownership a distant dream for many families who fall outside the reach of existing low-income assistance programs. Yet, Hertzberg’s vision, The Middle-Class Homeownership Act, is crafted to specifically target this population, namely the “missing middle,” those whose aspirations and financial realities are most at risk in the contemporary housing market, where the average income required to purchase a median priced home has hit nearly $300,000.

The heart of the Middle-Class Homeownership Act lies in its commitment to reversing the decline in middle-class homeownership rates. The Act takes a holistic view, looking not only at home purchase, but at long-term stability and wealth creation allowing subsequent generations to remain rooted in California. In essence, this act seeks to address the primary roadblocks to homeownership to those who are earning the median household income in California which stands at approximately $95,000 in a market where the median priced home is $900,000 — close to 10 times the average median salary.

“There is a war against the middle class in California”

The Middle-Class Homeownership Act encompasses a set of robust policy tools designed to tackle housing challenges from multiple angles. According to Hertzberg, it “creates revenue streams that avoid the ‘rich/poor divide.’” Specifically, this 2026 California ballot initiative is aimed at augmenting housing opportunities for middle-income families through a market-based bond program. This initiative addresses several impediments to homeownership and seeks to enhance the supply of middle-class homes by providing financial support and reforming legal and labor frameworks. 

Hertzberg laments the woeful dearth of homes in California. For this reason, the Middle-Class Homeownership Act will apply only to new construction because, as Hertzberg rightfully claims, “the whole point here is to increase supply.” Further, the initiative proposes a $25 billion bond fund to provide loans secured by second trust deeds to middle-class homebuyers. These loans would cover 17% of new home construction costs, enabling approximately $150 billion in new construction. In addition, the fund is designed to be revolving, meaning it will be replenished by repayments after sales or refinancing, thereby sustaining ongoing support for middle-class homebuyers without any cost to the California taxpayer.

“Home is Where the Wealth Is”

One of the primary obstacles to homeownership that Hertzberg identifies in the Middle-Class Homeownership Act is the unaffordability of down payments in California. Many potential buyers are simply unable to save the substantial amounts required for a down payment, which prevents them from entering the housing market relegating them to permanent renting and destroying their ability to build generational wealth through homeownership in their communities. The Middle-Class Homeownership Act would address this challenge by building in a 3% down payment program. To illustrate, if a new home cost $900,000, a traditional down payment of 20% would be $180,000. However, under this program, a person defined as middle class, or making up to 200% of the Area Median Income, would be able to put down 3%, or $27,000 as a down payment. In other words, the borrower of brand-new home defined as a middle-class domicile would receive a conventional 80/20 loan with 17% of the 20% needed from the program and the borrower putting up the remaining 3%. 

Historically restrictive government programs and credit scoring systems also exclude many potential buyers who might otherwise qualify for home loans. This initiative aims to simplify access to homeownership by reducing bureaucracy and addressing issues related to credit and fees, making it more attainable for a broader segment of the population. To further boost construction, the initiative includes specific legal and labor reforms. Liability concerns that deter building have been addressed by reforming laws to cap attorney fees and streamline dispute resolution processes. These changes are intended to reduce the legal risks and costs associated with construction, encouraging more developers to build middle-class housing. Labor standards have also been reformed to ensure fair pay for workers without imposing minimum wage requirements, creating a viable environment for developers to operate in many parts of California.

Hertzberg alludes to the strong public support for the bond initiative, with polling indicating approval ratings between 75% and 91%, to build momentum for this program. This support is attributed to the consumer-friendly design of the bond and the fact that it does not impose additional tax burdens on the public. The initiative also seeks funding from philanthropic and financial institutions that are willing to accept a modest 3% return on their investment. This approach positions the bond as a socially impactful investment, akin to war bonds, aimed at supporting the middle class.

In summary, Hertzberg is asking the fundamental question of how to fix a massive challenge with limited resources. Recognizing the enormity of the task ahead of him, he summarizes the quagmire of passing meaningful housing legislation in California by quoting a comedic exchange from “The Princess Bride” about the heroes’ lack of resources while trying to break into a castle.  “How do I fix things with a cloak and a wheelbarrow?” The Middle-Class Homeownership Act stands as a thoughtful, multifaceted effort to reaffirm the central place of homeownership in the American middle-class experience. By addressing affordability, accessibility, and sustainability—while also supporting communities — the Act sets forth a blueprint for restoring hope and opportunity to millions of families whose dreams of homeownership have been often shattered by the correlation between scarcity and high property values.  Should its provisions become law, the Act has the potential to shape a more inclusive and resilient housing market for generations to come. To learn more about the California Middle-Class Homeownership Act, please visit cahomescoalition.com.

Lisa Ansell is the Associate Director of the USC Casden Institute and Lecturer of Hebrew Language at Hebrew Union College-Jewish Institute of Religion Los Angeles.