State Legislature Opens New Pathways to Affordable Homeownership

SB 1123 will accelerate construction of smaller, affordable “starter“ homes

“We’re re-kindling the California dream”

SACRAMENTO — Today, the California State Legislature passed legislation that could re-kindle the dream of homeownership for tens of thousands of Californians. SB 1123, a bill by Senator Anna Caballero (Merced), updates SB 684 (passed in 2023) to make it easier to build multiple, small starter homes on residential lots currently zoned for just one house. 

California YIMBY, California Community Builders, the Central Valley Urban Institute, and LISC San Diego co-sponsored the bill.

Due to the housing shortage, California has one of the lowest rates of homeownership in the United States. The shortage has had a particularly high impact on communities of color, which have the lowest rates of homeownership – Latinos own homes at rates 19% lower than white Californians, while ownership rates among Black Californians are 26% lower. Much of this disparity dates back to the 1960s and 1970s, when local jurisdictions made it illegal to build small starter homes on most of their residentially-zoned land. 

“Many Californians feel like the California dream of homeownership is a cruel joke for them,” said Brian Hanlon, CEO of California YIMBY. “The lack of affordable starter homes has forced many hard-working Californians to delay or even give up on their dream of homeownership. But thanks to Sen. Anna Caballero, we’re hoping to revive the dream – SB 1123 could once again spur the construction of starter-homes, and give working-class Californians a shot at homeownership in the neighborhoods where they want to live, work, and raise a family.”

For decades, explicitly discriminatory housing policies in California’s local jurisdictions prevented non-white families from buying homes in resource-rich, single-family, neighborhoods. These policies, which include the exclusionary zoning that still applies on 95 percent of the residential land in the state, prohibit the construction of homes that would be affordable to more working-class residents and communities of color, like small-lot homes and condos. 

SB 1123 (Caballero) expands SB 684 (2023) to make it legal to build up to 10 homes on vacant lots in single-family zones by streamlining the approval process for these projects, and clarifies existing provisions to ensure that a variety of different lower-cost homeownership types and builders are eligible to use the bill.

About California YIMBY

California YIMBY is a community of neighbors who welcome more neighbors. We believe that an equitable California begins with abundant, secure, affordable housing. We focus on housing and land use policy at the state and local level to ensure grassroots organizers and city leaders have the tools they need to accelerate home building. Learn more: https://cayimby.org/