California's government has far too many special-interest programs. The Cal-Vet program was established after World War I to help veterans buy homes. Since a large number of Californians stood to benefit from that program, politicians were only too happy to adopt it.
The Legislative Analyst tells us that the Cal-Vet program costs taxpayers nothing. However, if the payments made by participating veterans do not fully cover the principal and interest payments on the bonds, the taxpayers would have to pay the difference.
Unfortunately, California's real estate boom ended a few years ago. Back in the 1980s people could turn big profits on their homes. Not anymore. The economy has grown worse, allowing fewer Californians to buy homes. In both Los Angeles and Orange Counties, only 15 percent of residents can afford the median priced home. Bank foreclosures on properties are at an all-time high. Proposition 206 will tell wannabe homeowners that their taxes will subsidize Cal-Vet loans.
Veterans, especially those who served in combat situations, deserve our appreciation. In fact, the federal government provides extensive veterans' benefits. The Department of Veterans Affairs is a Cabinet department the same as the Treasury and Justice Departments. One veterans' benefit is the VA home-loan program. We don't need an expensive duplicate program at the state level.
Proposition 206 seems unnecessary as well. Currently many lenders are offering home loans with as little as 3% or 5% down for buyers with good credit. Veterans, along with everyone else, can apply. If a veteran's credit isn't good enough to qualify with a regular lender, then maybe he or she is too great a risk for the taxpayers. Prop. 206 makes every one of us a co-signer to veterans' housing loans. With any home loan, if the homeowner can't pay, the lender is left holding the bag.
It's a matter of fairness. The government should not play favorites and give special privileges to veterans. The current poor state of California's real estate market suggests that many veterans will default on these loans. Then we all have to pay.
Vote NO on Proposition 206.
Real Estate Broker, Glendale
Member, State Executive Committee,
Libertarian Party of California