Costa Mesa residents looking to buy their first homes could apply for a grant or loan through a proposed program funded by cannabis tax dollars.
The City Council will consider on Tuesday, June 16, establishing a two-year pilot that would help current and former residents put down roots in the city using revenues generated by Measure Q, a 2020 ballot initiative that authorized a 7% local tax on cannabis businesses.
The city allocated 0.5% of that revenue source to a fund for first-time homebuyers, who can be either residents or graduates of the Newport-Mesa Unified School District. The city began funding for the program in 2022, and there is now enough money built up to try the pilot, city staff said.
City leaders have long discussed the challenges renters and first-time homebuyers face in Costa Mesa, which has a median home purchase price of $1.4 million, according to data from Redfin. The council passed a no-fault eviction ordinance in 2023 that prevents landlords from evicting tenants during renovations, property sales and other circumstances.
Under the homebuyer program, the city could provide assistance to each applicant in the form of a one-time grant or loan of $25,000 to $35,000, city staff said. Applicants could use the money to buy single-family detached homes, townhouses, condos or manufactured homes. Though not required by Measure Q, the city could limit assistance to residents making less than 150% to 250% of the area median income.
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Applicants who receive a grant or loan would be encouraged to make the home their primary residence for at least five years to “ensure that program funds support long-term homeownership rather than short-term investments,” city staff said.
Since the homebuyer program would be funded by cannabis tax revenue, it would not have an impact on the city’s general fund, city staff said in a report. The fund for the program receives roughly a quarter of a million dollars in Measure Q revenue a year and currently has a balance of $550,000.
Costa Mesa is projected to make an estimated $3.6 million in cannabis tax revenue this year, a 6% increase from the previous year, according to the city’s 2025-26 budget. Most of that money — 6.5% of the 7% tax — is allocated to the city’s general fund, which is pays for day-to-day operations such as the police and fire departments, parks and other services. A small portion will go toward funding art and culture programs, such as large-scale public artworks and free concerts and performances at city parks.
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