As you well know, the need for affordable housing in the state of California is severe. In fact, according to the National Low Income Housing Coalition’s 2017 study, a California household must earn $30.92 per hour (working 40 hours a week) to afford a 2-bedroom home without paying more than 30% of their income. Just last year California’s 2-bedroom affordability was at $28.59 per hour. While the affordable housing crisis isn’t anything new, two new bills aimed at housing development and affordability has made its way up the ranks.
Heading to the governor’s desk and supported by the California Apartment Association, SB 680 would extend the boundaries where Bay Area Rapid Transport (BART) can pursue commercial, residential or mixed development from a quarter to a half-mile of its stations. The transportation company estimates that by extending the distance an additional 7,000 units could be built in the Bay area by 2040.
Meanwhile, SB 2 has cleared the Senate and will now move on to the Assembly. According to the Los Angeles Times, this bill could provide roughly $250 million a year in new funding for low-income housing development by adding a $75 fee to all real estate transactions (like mortgage refinances). Currently, home and commercial property sales are exempted from this fee. From the money generated from this fee, 20% would be required to go towards affordable owner-occupied workforce housing and 10% to housing purposes for agricultural workers and their families. The remaining 70% will be expended for affordable housing, home ownership opportunities, and housing-related programs.
Some other California bills that haven’t quite progressed far, but you should still be looking out for:
- SB 35
This bill would place requirements on local governments (such as how many units the area must develop annually). SB 35 also aims at streamlining the development approval process state-wide by limiting the local governments from imposing parking standards and other requirements. It also limits the use of conditional use permits.
- AB 71
Introduced by Assemblyman David Chiu (D-San Francisco), this bill would end a California tax break that allows homeowners to deduct the interest from their mortgage on their second home. AB 71 would then direct a percentage of those funds towards the development of qualified low-income housing.
While the housing crisis isn’t going to go away anytime soon, legislators are hoping to make a dent at the overwhelming lack of housing developments through these proposed bills. As you continue to manage your rental properties, be sure to incorporate quality and thorough tenant screening into your rental process.
What do you think about these bills? Any you support or oppose? Let us know in the comment section below and be sure to subscribe!
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