Real Estate Articles
2018 housing laws seek to alleviate California housing crisis
Governor Brown signs the affordable housing bill.
In 2017, the California Legislature passed a package of 15 bills that seeks to address the state's severe housing crisis. Signed by Gov. Brown, these bills specifically target the development of more affordable housing, provide funding, and require the quicker approval of housing development by local governments.
California's severe housing crisis stems from a shortage of affordable housing. The state needs to construct at least 180,000 new homes each year, but is only producing about 100,000. In the meantime, the economy is growing and while job growth is supposed to be a good thing, there are not enough homes for people to live in and it has caused home prices and rents to skyrocket. Seventy percent of Californians cannot afford a home, nearly 120,000 are homeless, and two-thirds of them are living on the streets.
Some new laws taking effect this year include Assemblyman Evan Low (D-Campbell)'s AB 1397, which tightens the standards for what constitute an adequate site under California's Housing Element Law by limiting the reliance of local governments on sites that do not have a realistic capacity to develop both affordable and market-rate housing.
California's Housing Element Law requires every local government to identify sufficient land, with appropriate zoning, to accommodate enough housing to meet its share of the regional housing need at all income levels. Unfortunately, current law has a number of gaps that allow jurisdictions to circumvent this obligation, relying on sites that are not available or feasible for residential development, especially multifamily development.
AB 1397 would require a stronger analysis before allowing sites with existing uses to be considered suitable for residential development, limit reliance on sites that are too large or too small and reliance on sites that have been recycled across multiple Housing Elements without developing as housing.
"Homeownership has become unattainable for far too many hardworking Californians," said Low. "The Legislature has taken an important step to address the housing crisis by reducing barriers to construction, creating incentives to development, and providing a dedicated source of funding for affordable housing."
Addressing funding is SB 2 by Sen. Toni Atkins (D-San Diego) and supported by the California Association of Realtors. SB 2 would impose a $75 to $225 fee on real estate transactions and is expected to generate as much as $258 million per year for low-income housing development and programs to combat homelessness. Home sales and commercial real estate sales are exempt from the bill.
Senate Bill 3, by Sen. Jim Beall (D-San Jose), would place a $4 billion bond on the November 2018 ballot. If approved by voters, $1 billion would be used to help military veterans purchase homes with low or no down payment at below-market interest rates. The other $3 billion would pay for affordable housing programs.
"For too long people in our communities have been priced out of a shrinking housing market because California lacked a comprehensive and coordinated plan that invests in affordable home creation and adopts strong regulatory reforms to support building," said Beall. "Senate Bill 3 gives California the opportunity to build $15 billion in much-needed affordable housing for working families, seniors, vets, and the homeless."
These and other bills in the housing package may not be enough to solve the state's housing problem, but the legislators are hopeful and appear to have the will to do something about it.
"I am proud to be part of this smart, multifaceted approach to solving one of our state's most pressing issues. No one should be denied a place to call home. This housing package will help make our Golden State shine bright again," said Low.
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Variations of this article have appeared in local area newspapers.
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