SACRAMENTO, Calif./September 16, 2017 (AP)(StlRealEstate.News) — California lawmakers sent Gov. Jerry Brown a package of bills Friday aimed at easing the state’s affordable housing crisis, but a boom in building won’t happen immediately.
The three major pieces of the deal include a $4 billion housing bond, a new $75 fee on real estate transaction documents, and a bill to streamline building regulations that can hamper developers looking to construct low-cost apartments and homes. Brown plans to sign them.
California lacks an estimated 1.5 million affordable housing units compared to demand — a situation that is contributing to the growth of the homeless population.
It’s also home to 21 of the nation’s 30 most expensive rental housing markets. Efforts to spur building, enforce existing housing law and create a funding source for more affordable projects have struggled in the Legislature in recent years.
“We need to do our part and stop creating reasons why we can’t fix things,” Democratic Sen. Ben Hueso of San Diego said. “When you talk to the people of California they are concerned, and more and more concerned, that they have no affordable place to live.”
Still, a flurry of new houses isn’t likely to pop up for at least a few years. The primary source of money — the $4 billion bond — needs to win support from voters next year. If it does, backers say it can be released quickly because it will go toward already existing programs.
“We have to make a convincing case before the voters,” Senate President Pro Tem Kevin de Leon noted during a press conference celebrating the deal’s passage.
Likewise, the $200 to $300 million expected to be raised annually through the real estate fee won’t hit communities immediately.
Tyrone Buckley, policy director for Housing California, called the bills a “great first start” even though he doesn’t expect to see dollars rolling out until 2019.
“All of the bills that passed today are long-term goals and things that seemed nearly impossible as early as last year,” Buckley said.
Beyond the funding, a third key bill aims to add teeth to state housing laws that are rarely enforced. The state sets guidelines on how many housing units, and for what income levels, communities should have but often doesn’t make sure those goals are followed.
A bill by Democratic Sen. Scott Wiener will expedite the approval process for developers who want to build in communities that haven’t been hitting those targets. The streamlined process would make it harder for local governments to put up environmental or other regulatory roadblocks on low-income housing projects that some residents might not want. His bill takes effect Jan. 1 and the state still has to decide which communities will be eligible for streamlining.
“We have to have basic standards and accountability so local communities don’t just decide to opt out,” Wiener said.
The funding bills passed largely along party lines in both the Senate and the Assembly. In the lower chamber, Republican Brian Maienschein of San Diego backed the new real estate transaction fee, while Democrat Sabrina Cervantes opposed it after a dramatic hour in which several other Democrats wavered on whether to support it.
In the Senate, meanwhile, every Democrat backed the real estate fee. Republican Sens. Anthony Cannella, Janet Nguyen and Scott Wilk joined all 27 Democrats in backing the $4 billion bond, which sets aside $1 billion for veterans housing.
Most Republicans argued against hitting voters with yet another fee after lawmakers passed a gas tax hike already this year.
The $75 fee will apply to real estate transaction documents, exempting sales but including things like refinancing a mortgage. It would cap the fee at $225 per transaction.
“I believe that we are shortchanging the middle income, the average, hardworking Californians with this imposed fee,” Republican Sen. Jim Nielsen said.
The $200 to $300 million expected to come in annually from the fee is still far less than the $1 billion local communities used to get under a redevelopment program halted in 2012.
In the first year, half of that money will go toward efforts to reduce homelessness, while the remaining half will aid communities in updating their planning and zoning laws. After that, 70 percent of the money will go to local communities for housing projects.
By KATHLEEN RONAYNE , Associated Press