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California considering a first of its kind idea to boost factory-built housing
California’s proposed bill would have the state guarantee surety bonds to help factory-built housing overcome financial barriers and scale production, addressing a self-reinforcing industry challenge.
- Last week, Assemblymember Buffy Wicks and Assemblymember Juan Carrillo introduced Assembly Bill 2166 in California, proposing state-backed surety bonds to guarantee insurance payouts for factory-based housing developers and lenders.
- Industrialized construction often faces a "self-reinforcing cycle" where new factories cannot secure bonds, preventing them from attracting business or scaling production. This "doom loop" stalls development despite potential for faster, safer, lower-cost housing.
- Michael Merle, business development director at Idaho-based Autovol, said a bonded project "puts the developers and the lenders at ease." Bonds cost between three-quarters of a percentage point and 3% of contract costs.
- Ryan Cassidy, vice president of real estate at Mutual Housing California, prefers a "more direct" approach of simply funding projects. He argues this method would better support developers than the state-backed insurance proposal.
- The bill faces its first legislative committee hearing in late April. Tyler Pullen at the Terner Center for Housing Innovation notes the program could temporarily support early adopters while the industry builds its reputation.
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California considering a first of its kind idea to boost factory-built housing
In an effort to put a dent in the state’s housing shortage, California is considering something unprecedented: getting into the construction insurance business.
·United States
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California considering a first-of-its-kind idea to boost factory-built housing
This story was originally published by CalMatters. Sign up for its newsletters. In an effort to put a dent in the state’s housing shortage, California is considering something unprecedented: getting into the construction insurance business. Last week, Assemblymember Buffy Wicks, an Oakland Democrat, and a bipartisan coalition of lawmakers raised the curtain on a long-awaited package of bills meant to push developers toward cost-cutting innovati…
Coverage Details
Total News Sources15
Leaning Left3Leaning Right1Center1Last UpdatedBias Distribution60% Left
Bias Distribution
- 60% of the sources lean Left
60% Left
L 60%
C 20%
R 20%
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