State lawmakers are now making moves to alleviate California’s soaring rents and home prices. The bills being deliberated cover permanent housing for the homeless, new zoning rules to allow apartments on BART parking lots, and workarounds for the $10,000 federal cap on state and local tax deductions.
Assembly Bill 2162 would fast-track housing developments for the homeless and disabled that can be delayed or derailed by local politics. The bill would also allow for affordable leases on apartments.
Assembly Bill 2923 aims to allow housing development on BART’s parking lots. David Chiu, who leads the Assembly’s housing committee, states that “Given the twin housing and congestion crises, building housing next to major transit is simply common sense.” However, this bill faces stiff opposition from many of the affected cities.
Senate Bill 227 seeks to create a workaround the on $10,000 cap on state and local tax deductions that came about as a result of the federal overhaul of the tax code earlier this year. The bill would allow for Californians to make contributions to school districts, charter schools, and community colleges in exchange for state tax credits, which could be fully deducted from their federal taxes.
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Huntington Beach Assemblyman Travis Allen, Republican: Allen has a goal for developers to build at least 1 million new homes in his first four years as governor. He believes the state needs to strip away many of the regulations around home building, which he says would allow developers to increase the housing supply. He doesn’t support subsidizing low-income housing, arguing developers will build for people of all incomes if taxes and fees are lower.
The Huntington Beach Republican is also opposed to a potential November ballot measure to allow for the expansion of rent control. He believes rent control leads to housing shortages and says he’d work to eliminate all existing rent control policies across the state.
State Treasurer John Chiang, Democrat: Of all the candidates, Chiang is calling for the most government spending on housing. He would set a goal for the state to help finance 1.6 million homes for low- and moderate-income Californians from 2019 to 2030. He has also proposed a future $9-billion bond measure to subsidize new low-income construction, property tax breaks for developers who agree to set aside part of their projects for low-income families and additional tax revenue to cities that approve more housing.
Chiang is opposed to the potential rent control ballot measure, and believes that the state could change Costa-Hawkins, the law prohibiting the expansion of rent control, to allow for its broader use in certain circumstances.
Businessman John Cox, Republican: Cox, who owns a real estate investment and property management company, has a goal for developers to build 3 million new homes over the next decade. He said that the state needs to reduce regulations on builders, including replacing its primary environmental law governing development, the California Environmental Quality Act, with a less comprehensive measure. Cox also wants to allow Californians to be able to take the property tax benefits they receive under Proposition 13 with them when they move. In addition, Cox is against a potential November ballot measure to help rent control expansion.
Former state schools chief Delaine Eastin, Democrat:Eastin would set a goal of developers building 1 million new homes in her first four years in office, and would prioritize construction around transit hubs. She wants to rezone a lot more land for housing, including current commercial properties, increasing land available for duplexes and townhomes, and making it easier to build homes on smaller lots.
Of the top candidates in the race, Eastin has been the most supportive of expanding rent control as well as advocating for the repeal of the Ellis Act, which allows for the eviction of rent-controlled tenants if landlords convert their buildings to for-sale condominiums.
Lt. Gov. Gavin Newsom, Democrat: Newsom wants developers to build 3.5 million homes from when he takes office through 2025, which would be an unprecedented building boom compared with modern California history. He wants a fivefold increase in a state tax credit to finance low-income housing, bringing the state budget cost to $500 million a year. And Newsom supports eliminating regulations that he contends make it difficult for developers to produce middle-income homes.
Newsom is against the potential rent control ballot measure and believes that the Costa-Hawkins law should be changed to add more renter protections.
Former Los Angeles Mayor Antonio Villaraigosa, Democrat: Like Newsom, Villaraigosa calls for building 3.5 million new homes through 2025. He wants to create a new version of a program that allows cities and counties to set aside some property tax dollars to help finance low-income housing. And he plans to set up a $10-billion revolving loan fund to help homeowners convert garages into separate houses or build stand-alone second units in their backyards.
Villaraigosa is against the potential rent control ballot measure and says that he would use potential changes to Costa-Hawkins as a bargaining chip in a larger package of policies to address housing affordability.
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The Most Expensive
San Francisco, CA rent, similar to last month, remained at $3,400 and as the most expensive in the metro.
Mountain View, CA was second with rent climbing $10 to $3,110.
Emeryville, CA ranked as third with rent at $2,790.
The Least Expensive
Vallejo, CA rent dropped $70 to $1,420 and continued to be the least expensive.
Santa Rosa, CA was second with one bedrooms priced at $1,570.
Napa, CA ranked as third with rent falling $50 to $1,650.
Growth rate, Yearly 1 Bedroom Rent Evolution
The Fastest Growing (Y/Y%)
Emeryville, CA had the fastest growing rent since this time last year, up 15.8%.
Mountain View, CA was close behind as second with rent climbing 15.6%.
South San Francisco, CA ranked as third with rent jumping 14.5%.
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Through shifting control of land use policy from local to regional governments, Senate Bill 827 wants to reduce the Golden State’s cost of housing.
State Senator Scott Wiener, the movement’s champion in the California Senate, has proposed a new bill SB 827, that, if passed, would compel California cities to allow dense, mid-rise housing within walking distance of most transit. The bill would affect large swaths of Los Angeles, San Francisco, and Oakland, and other locations farther afield, near rail stations and along bus routes. If SB 827 passes, it would be the most important step in decades toward upping the state’s housing supply in substantial numbers.
Opponents of the bill portray it as seizing control over neighborhoods from local planners, and they are not entirely wrong. The bill shifts power over an important aspect of land use policy from local decision makers to the state. Indeed, that is the proposal’s greatest strength.
SB 827 shifts power over an important but specific aspect of land use policy—housing density near transit—from the local level to the regional one. Moreover, it does so without otherwise intruding on cities’ autonomy. There is no need to over-constrain local land use policy by overriding it even when its effects don’t transcend municipal boundaries. Of course, the devil is almost always in the details and it certainly will be in the case of SB 827 too, but in shifting control over a defined aspect of land use from the local level to the regional one, this bill gets the overarching principle right.
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Mortgage rates surged to their highest level in almost five years this week.
Unlike the extremely mild and uneventful day-to-day changes seen for most of the past 2 months, rates are actually putting some distance between themselves and the March plateau.
Whereas a well-qualified borrower with 25% down may have been quoted a conventional 30 yr fixed rate of 4.5% a few weeks ago, they’d already be looking at 4.75% today for most lenders. Of course this can vary a bit from lender to lender, but the point is that all lenders have experienced that sort of delta.
Today’s Most Prevalent Rates – 4/26/2018
30YR FIXED – 4.58%
FHA/VA – 4.25%-4.5%
15 YEAR FIXED – 4.02%
5 YEAR ARMS – 3.74%
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