By Steve Williams

California’s housing crisis is now decades in the making. With affordability out of reach for many and new construction lagging far behind demand, state leaders are understandably under pressure to try something — anything — that might work. Enter SB 750, the California Residential Mortgage Insurance Act, authored by State Senator Dave Cortese (D). This proposal would create a state-backed loan insurance program for multifamily housing, administered by the California Housing Finance Agency (CalHFA). Developers would pay premiums, capped at 2 percent, to insure their construction and permanent loans, with the goal of unlocking capital and incentivizing new housing production.

As someone with experience in both business and public policy, notably in real estate development and land use consulting, I understand the urgent need for financing tools that catalyze housing. SB 750 is creative, even bold. While the ambition is admirable, the bill raises serious red flags. Before California embraces this proposal, we need to ask some hard questions about trust, risk, and accountability.

On paper, SB 750 offers promise. By removing a layer of financial uncertainty, it could help unfreeze stalled projects and attract investment, especially in a high-interest-rate environment where lenders have grown cautious. Streamlining capital stacks and offering credit enhancement through state-backed insurance could meaningfully improve the feasibility of many projects. The logic is sound: if the state helps reduce risk, developers can build more affordably and quickly.

But critics, including those who’ve watched years of failed housing efforts from the state, are right to be skeptical. First, there’s the matter of financial liability. While SB 750 supporters claim the program would be self-sustaining through developer-paid premiums, the state would ultimately be the guarantor. If insured projects default — particularly during an economic downturn — it’s California taxpayers who may be left holding the bag. We cannot ignore the possibility that the state could be dragged into another long-term financial obligation it’s unprepared to manage.

Second, there’s a fairness concern. Programs like this often end up favoring the best-connected and most resourced players — typically large developers with the staff, attorneys, and institutional muscle to maneuver through complex state programs. That’s not just speculation; it’s historically proven. In trying to reduce housing inequality, we risk reinforcing a two-tier system where the little guys are locked out while the big firms cash in.

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Then there’s the issue of trust. Can we really rely on the state to administer a financially complex program when it has shown such poor track records with existing housing and homelessness funds? According to a 2024 report by the California State Auditor, the state spent $24 billion on homelessness between 2018 and 2023, with little to show for it. In fact, the report highlighted that the state stopped even tracking performance metrics in 2021. If billions can be spent without oversight, why should we believe this time will be different? If the state can’t competently manage programs already in place, handing it even more responsibility — let alone underwriting risk — is not just questionable, it’s reckless.

Moreover, SB 750 can’t even proceed without a constitutional amendment, which would require approval by both the Legislature and voters. That alone should prompt deeper scrutiny. Why are we considering enshrining an untested financial mechanism into the state’s constitution? Doing so ties the hands of future lawmakers and makes it exponentially harder to revise or repeal the program should things go wrong.

This is not a bill that needs guardrails; it’s a bill that needs to be stopped. SB 750 shifts financial risk onto taxpayers without addressing the real structural problems behind California’s housing crisis. We don’t need another untested, bureaucratically administered program with vague promises and no clear accountability. Rather than creating new layers of complexity and liability, the state should focus on streamlining existing processes, enforcing transparency in how current housing dollars are spent, and empowering local solutions.

That includes reforming CEQA, streamlining the entitlement and permit process, and ensuring rigorous oversight of existing public funds before requesting more. California can’t afford another initiative that becomes a financial sinkhole. Legislators and voters must reject SB 750 to protect taxpayers and insist on sustainable solutions — not more rigged schemes.

 Steve Williams is a seasoned technology, real estate, and land use professional and an Executive Board member of the Republican Party of Los Angeles County. Follow him on X (formerly Twitter): https://x.com/SteveAWilliamsX