CA considering a first of its kind idea to boost factory-built housing

Key Points:

• California lawmakers, led by Assemblymember Buffy Wicks and a bipartisan coalition, introduced a package of bills aimed at promoting factory-based home construction to address the state's housing shortage by reducing costs and speeding up building times.
• Assembly Bill 2166 proposes that the state act as a reinsurer to guarantee insurance payouts for developers and lenders working with factory-built housing, addressing a key financial hurdle where new factories struggle to obtain surety bonds due to lack of track record.
• The bill seeks to break a "doom loop" where developers hesitate to use factory-built housing without bonding, factories can't get bonded without business, and projects fail, thus stalling industry growth and cost reductions in housing production.
• While the proposal is seen as innovative and potentially high-impact by housing experts, some industry stakeholders question whether state-backed insurance is the best incentive, suggesting direct financial support might be more effective for scaling factory-built housing.
• The legislation is unprecedented in California and faces questions about financial risk to taxpayers and long-term viability, with hopes that the state's involvement would be temporary until the factory-built housing industry matures and private insurers become more comfortable.