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Newsom’s $100B Plan Bodes Well for the California Housing Market

The Real Deal

Everything Real Estate in the San Fernando Valley
Monday May 17, 2021
Newsom’s $100B Plan Bodes Well for the California Housing Market

While this blog is not the place to discuss the nuances of macroeconomics, suffice it to say that most markets benefit whenever there is a massive influx of money to a given ecosystem. In our case, the market is the housing market, the ecosystem is California, and the massive influx of money is the result of the embattled Governor Newsom’s $1.5B in proposed grants to small businesses; this would increase the total grant funding to small business to $4B.
Under the proposed program, small businesses could receive up to $25k, and the state anticipates that approximately 150,000 small businesses will receive these grants, provided the California Legislature approves the funding. This comes on the heels of a $575M grant program.
The current plan ($100B) announced earlier this week and funded by the state's $76B surplus in the next fiscal year, to address the state’s rampant housing shortage (around $5.2B to cover back rent, good news landlords!) and $5.2B to cover a round of $600 stimulus payments to California residents.
To tie this all together, this benefits the housing market in two ways, one direct and the other indirect. In a direct sense, business owners, as a demographic, are higher income earners and therefore likely candidates to purchase a new home. Indirectly, this grant program may assist California’s economy in regaining some stability. The more stable the economic outlook, the more people are willing to make large purchases (like homes). Thus, from the perspective of the housing market, this is all very good news.
At the Chernov Team we understand that knowledge is power, and knowledge of how policy decisions impact the housing market as a whole is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.

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