California is on the verge of pushing through another high-risk housing scheme—this time with taxpayers on the hook for billions if it fails. Senate Bill 750, dubbed the California Residential Mortgage Insurance Act, proposes a state-backed loan insurance program to encourage multifamily housing construction. Supporters are touting it as bold and innovative. But critics warn it’s reckless, unaccountable, and destined to benefit powerful developers while working Californians get left behind.

The bill, spearheaded by Democratic State Senator Dave Cortese, aims to eliminate financial risk for developers by offering state-backed insurance on construction loans. Developers would pay a premium capped at 2% to tap into the program. In theory, it’s meant to jumpstart housing projects stalled by high interest rates and risk-averse lenders.

On paper, it looks appealing: reduce financial hurdles, bring more housing online, and make it affordable. But longtime real estate consultant and Republican Party leader Steve Williams says it’s a ticking time bomb.

Williams, who penned a guest editorial for RedState, argues that while the bill is ambitious, it’s built on a foundation of false promises and fuzzy math. The biggest issue? Liability. If the economy tanks or projects default, taxpayers—not developers—will be on the hook.

Supporters claim it’ll be self-sustaining through premiums. But that assumes near-perfect performance across all insured projects, a bet no seasoned developer would ever make. And if they’re wrong, the California Housing Finance Agency (CalHFA) will need a bailout—meaning your tax dollars will clean up the mess.

Williams also warns that the program, like many in California, will end up benefiting only the most well-connected. Big developers with deep pockets and elite legal teams will be the first to capitalize. Smaller builders, local contractors, and struggling entrepreneurs? They’ll be buried under bureaucracy.

“Programs like this often end up favoring the best-connected and most resourced players,” Williams writes. “In trying to reduce housing inequality, we risk reinforcing a two-tier system where the little guys are locked out while the big firms cash in.”

That warning comes as trust in California’s housing management is at an all-time low. Between 2018 and 2023, the state spent $24 billion on homelessness. According to a 2024 state audit, they stopped tracking performance outcomes in 2021. After billions wasted and virtually no results, Sacramento wants even more power—this time, to underwrite high-risk loans.

Even more alarming, SB 750 would require a constitutional amendment to move forward. That means if it passes, it becomes almost impossible to fix—or kill—if it starts to collapse. Critics say that’s no accident. By baking this into the state constitution, lawmakers are shielding it from future scrutiny.

Williams calls that a dangerous precedent.

“Why are we considering enshrining an untested financial mechanism into the state’s constitution?” he asks. “This is not a bill that needs guardrails; it’s a bill that needs to be stopped.”

Rather than launching risky new programs, Williams says California should be overhauling its broken systems—reforming the California Environmental Quality Act (CEQA), cutting red tape in the permitting process, and enforcing transparency in how housing funds are actually spent.

SB 750 doesn’t solve the housing crisis. It hides it behind government guarantees and shifts risk away from those profiting and onto the public. California has already wasted billions. It can’t afford to gamble billions more.

Voters should reject this scheme. Legislators should demand accountability, not more layers of bureaucracy. And taxpayers must stand up before another “solution” becomes another financial sinkhole.