Governor’s Surprising Move on Housing Loan Legislation Creates Stir

September 9, 2024

Governor Gavin Newsom has vetoed a bill that sought to provide housing loans to undocumented immigrants in California.

At a Glance

Gov. Gavin Newsom vetoed Assembly Bill 1840, which aimed to expand the California Dream for All program to undocumented immigrants.
Newsom cited the need to manage finite state funding within the broader budget context as the reason for his veto.
The bill was introduced to address California’s housing affordability crisis.
Republican lawmakers argued that housing assistance should prioritize legal residents.
The program previously awarded financial aid to 1,700 first-time homebuyers but exhausted its funds within 11 days.

Newsom’s Decision to Veto AB 1840

Governor Gavin Newsom recently exercised his veto power on Assembly Bill 1840, a proposal that would have allowed undocumented immigrants to apply for first-time homebuyer assistance through the California Dream for All program. In a statement, Newsom highlighted the need to manage the state’s finite resources within the annual budget.

“Given the finite funding available for CalHFA programs, expanding program eligibility must be carefully considered within the broader context of the annual state budget to ensure we manage our resources effectively,” Newsom’s veto message read. “For this reason, I am unable to sign this bill.”

Newsom’s veto of AB 1840 underscores the complexity of addressing California’s housing crisis while also managing economic constraints and public resources effectively.

The Controversy Surrounding AB 1840

Introduced by Assemblymember Joaquin Arambula, a Democrat from Fresno, AB 1840 aimed to provide homeownership opportunities to undocumented immigrants, a move that Arambula argued was about fairness. “AB 1840 is about providing an opportunity to hard-working, responsible people who dream of owning a home and passing that legacy to their children,” said Arambula. “And, that includes undocumented immigrants who have lived here for decades and pay their taxes.”

California Gov. Gavin Newsom vetoed a bill Friday that would have made some immigrants in the country illegally eligible for home loans backed by the state. https://t.co/skNUB9F6xj

— CBS Sacramento (@CBSSacramento) September 6, 2024

While the bill was intended to address the housing affordability crisis by preventing disqualification based on immigration status, it faced significant opposition. Republican lawmakers argued that state resources should prioritize legal residents. Republican state Sen. Brian Dahle stated, “We have Californians who are not undocumented immigrants, who need these services. We should take care of them first, before we expand it out.” –

Financial Constraints and Legislative Challenges

The California Dream for All program initially awarded financial aid to 1,700 first-time homebuyers but quickly exhausted its funds within 11 days. The state’s Department of Finance noted that no additional funds were appropriated for the program due to an expected state budget deficit in the tens of billions. Any future funding for the program would require approval from both the Legislature and the governor.

“California’s budget deficit continues to grow and Democratic lawmakers are so out of touch with everyday Californians that they are quite literally taking money away from law-abiding citizens, their own constituents, and handing it over as a free gift to people who broke federal law to cross the border illegally,” criticized a spokesperson.

Despite the intent behind AB 1840, Governor Newsom’s veto underscores the contentious and complex nature of addressing California’s housing crisis while managing limited state resources efficiently.

It’s important to note that this law applied to individuals with an ITIN tax ID who contribute to California’s general fund. These are tax paying Californians whose taxes fund the program.

Let’s not get it twisted and feed a anti-immigrant narrative that is divisive and harmful. https://t.co/HVLyAjHuTY

— Wendy Carrillo (@AsmCarrillo) September 6, 2024

The Broader Political Context

Newsom’s decision is also influenced by broader political considerations. His political alignment with Vice President Kamala Harris and potential backlash from various political groups added layers of complexity to his decision.

“A first-in-the-nation California proposal could make undocumented immigrants eligible for up to $150,000 in state-supported home loans just as immigration has become an incendiary topic in the presidential election.”

Governor Gavin Newsom has made a pivotal choice in vetoing AB 1840, reflecting the intricate balance of ethical imperatives and practical financial stewardship in California’s legislative landscape.