California’s affordable housing crisis is one of the greatest challenges facing our state. Every day, affordable housing developers work to find financing, assemble land, navigate regulations, and overcome countless obstacles to build the homes Californians desperately need. Solving this crisis will require significant private and public investment, and California cannot afford policies that risk driving away the capital needed to finance housing production. That’s why CCAH has taken a position opposing Prop 40, commonly known as “the wealth tax initiative” on the November ballot.
I understand why proposals like this gain attention and why some may question why CCAH would take a position on this measure, let alone an opposed position. Californians are frustrated by growing costs and economic inequality and want to see more resources directed toward important public priorities. But good intentions alone do not make good policy.
To that end, our opposition is rooted in the practical realities of how affordable housing is financed. Affordable housing development depends on a complex capital stack typically made up of public funding, soft money, private investment, traditional lending institutions, and tax credit equity. When policies create uncertainty about California’s investment climate or make it less attractive for capital to remain here, the ripple effects can be significant for housing production. From our perspective, the question is not whether affordable housing deserves more funding. It absolutely does. The question is whether this particular policy helps or hurts our ability to attract the investment needed to build affordable homes. After reviewing the measure through that lens, we believe the risks to housing production outweigh the potential benefits.
While it may be true that only a small number of wealthy individuals would be affected, policies do not exist in isolation. They send signals about California’s economic climate and future direction. When investors become uncertain about where to place capital, or businesses begin to evaluate opportunities elsewhere, affordable housing development can quickly feel the effects. Capital is mobile, and housing production depends on it staying put here in California. On June 16, I was quoted in Politico’s California Playbook saying “A wealth tax may sound appealing in theory, but in practice it risks pushing capital, jobs, and housing investment out of California. At a time when the state faces a severe housing shortage, policymakers should focus on attracting the resources needed to build affordable homes, not discouraging them.” I stand by that statement today.
The reality is that California is already struggling to build enough housing. Thousands of affordable units remain stalled because project financing is increasingly difficult to assemble. Developers face higher interest rates, escalating construction costs, labor shortages, insurance challenges, and funding gaps. We should be doing everything possible to attract investment and create certainty, not adding new reasons for capital to look elsewhere.
At CCAH, we evaluate policy through a housing lens by asking ourselves a simple question: Will this help us build and preserve more affordable homes? After reviewing this measure, we believe the answer is no. Our opposition to this initiative is not about protecting the wealthy. It is about protecting California’s ability to finance and build affordable housing. Our goal is more affordable homes, more opportunity, and more housing stability for Californians and we should be focused on policies that help make those outcomes possible.
In partnership,
