California considers state-backed insurance to boost factory-built housing

California lawmakers introduced a package of bills to promote factory-built housing, including Assembly Bill 2166 which would have the state act as a re-insurer for certain surety bond payouts; the bill is scheduled for its first legislative committee hearing in late April.

California lawmakers have unveiled a package of bills intended to encourage factory-built housing and address the state's housing shortage. One bill in the package, Assembly Bill 2166, would have the state act as a re-insurer in certain extreme cases to guarantee part of surety bond payouts. The proposal is framed as a way to break a cycle in which new factories cannot obtain bonds, cannot win projects, and therefore cannot build a track record. Key points: - Assembly Bill 2166, authored by Assemblymembers Buffy Wicks and Juan Carrillo, would have the state cover a portion of surety bond payouts in specified extreme circumstances; the size of that portion and qualifying conditions are not yet determined. - The bill is part of a broader bipartisan package aimed at encouraging off-site, factory-based construction to speed building and lower costs as a response to the housing shortage. - The measure is proposed but not passed and is scheduled for its first legislative committee hearing in late April; the potential fiscal exposure for taxpayers has not been established. Summary: The bills are intended to reduce financial and regulatory barriers to factory-built housing by making surety coverage easier to obtain, which backers say may help new manufacturers gain business and scale production. The proposal raises open questions about cost, scope and temporary versus long-term roles for the state, and its immediate next step is the committee hearing set for late April.