Media Contact

Danielle Bell


Bruce Mirken, Greenlining Institute Media Relations Director, 415-846-7758
Sylvia Aguilar, Managing Director, California Community Builders,, 510-868-0991
Matt Lewis, California YIMBY,

Oakland, Calif. California’s mortgage interest deduction for second homes has served as a tax break for the wealthy, costing taxpayers $230 million annually while only benefiting less than 3% of California homeowners. AB 946 by Assemblymember Alex Lee (D-San Jose) would end this tax break on what are primarily vacation homes and instead direct these funds to the California Housing Finance Agency (CalHFA) MyHome Assistance Program and other programs that support moderate-income homeownership. This change would make it possible for approximately 23,000 families to become first-time homebuyers.

California’s history of redlining has for decades restricted homeownership for communities of color. By helping moderate-income families become homeowners, AB 946 is a critical step in reversing the pervasive discriminatory practice that has denied generations of Black and Brown families the unique wealth-building power of homeownership. Only 30% of Californians can afford to buy a median-priced home, and as a result the state’s homeownership rate is the second lowest in the nation. Only 34.5% of Black people and 41.9% of Latinos are homeowners.

“Closing this loophole is common sense. It’s great that some families are able to buy a second home, but taxpayers should not have to foot the bill when most Californians can barely afford their first home.” said Adam Briones, Economic Equity Director, The Greenlining Institute. “Redirecting this critical funding will enable hard working Californians, including teachers, firefighters, nurses, service workers, and many others to buy their first home and live in the communities where they work.”

“California has the second-lowest homeownership rate in the country because working families cannot afford the $700K price of entry for a modest home,” said Brian Hanlon, CEO of California YIMBY. “Assemblymenber Alex Lee’s bill, along with efforts to accelerate homebuilding, will help more Californians afford a home and will reduce the racial wealth gap by enabling more Californians of color to build wealth through homeownership.”

“First-time homebuyer assistance programs boost homeownership and equalize opportunity — 65 to 70% of CalHFA first-time home loans go to communities of color,” said John Gamboa, President of California Community Builders. “Increasing investment in these programs by reallocating a subsidy benefiting those who can afford two homes is long past due.”

Elimination of the mortgage interest deduction on second homes would have no effect on most California homeowners and minimal financial impact on most of those who currently take advantage of the interest deduction on second homes. People who rent out their second home and use it as a residence for at least 14 days, or occupy the unit for 10% of the number of days it is rented out, whichever amount is greater, are not impacted by this change because they do not currently qualify for the mortgage interest deduction on a second home. Of the less than 2.8% of Californians who currently write off mortgage interest on vacation homes, the average owner would owe an additional $1,000 a year in taxes. The reallocation of this subsidy would create a $230 million loan and assistance pool to support first-time homebuyers.

“We need more common sense solutions to solve California’s housing crisis, and tackling a tax break for the fortunate Californians who own more than one of them just makes sense,” said Assemblymember Alex Lee. “Redirecting those funds can help open the door to homeownership for middle class families and it’s the right thing to do.”

CA first-time homeownership facts:

  • Saving enough money for a down payment is the largest obstacle to first-time homeownership in California, especially because rentals are generally more than 30% of household income.
  • In the 1960’s the average California home cost three times the average household income. Today it costs more than seven times more.

CalHFA borrower profile:

  • 71% of loans go to people making less than $100,000 annually.
  • 65-70% of CalHFA first-time home loans go to Black, Indigeneous, People of Color helping reverse historic redlining policies.
  • CalHFA’s operations are funded by revenues generated through its mortgage loan programs. $230 million in annual investments with compounding returns will result in more than 23,000 additional homeowners after only a few years.

Follow this link for the full text of AB 946.

#    #    # 

About The Greenlining Institute

Founded in 1993, The Greenlining Institute envisions a nation where communities of color thrive and race is never a barrier to economic opportunity. Because people of color will be the majority of our population by 2044, America will prosper only if communities of color prosper. Greenlining advances economic opportunity and empowerment for people of color through advocacy, community and coalition building, research, and leadership development. We work on a variety of major policy issues because economic opportunity doesn’t operate in a vacuum. Rather than seeing these issues as being in separate silos, Greenlining views them as interconnected threads in a web of opportunity.

About California Community Builders

California Community Builders’ mission is to reduce the homeownership gap as a means of closing the racial wealth gap. Through the promotion of affordable homeownership, we seek to mitigate one of the most egregious root causes of increasing poverty and widening the wealth gap experienced by communities of color in California. Across every social measurement, homeownership has proven to be the doorway and pathway out of poverty and into the benefits of the middle class including: improved incomes and wealth creation, improved education, better health, safer neighborhoods, entrepreneurship and a strengthened democracy.

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.