California Legislators Agree on Affordable Housing

The critical housing shortage experienced across the Golden State will get some relief in the next few years thanks to three pieces of legislation that will fund several affordable housing projects. Billions of dollars will be appropriated for the purpose of building more than 70,000 new housing units for low-income and middle class families that have been priced out of the real estate market in regions such as Southern California, Silicon Valley and the Bay Area.

Although news of the legislative approvals were welcomed by many California Democrats and Republicans alike, critics are concerned about the revenue collection measures that these construction projects require. Two such measures include new real estate fees as well as taxes on sales of fossil fuels.

The problem some legislators are seeing with the new legislation is that their constituents have already been taxed a couple of times this year for the purpose of funding other projects. The new real estate transaction fee would add between $75 to $225 each time a home buyer goes to the closing table. Lawmakers have explained that the new fees are necessary because funding is no longer coming from redevelopment agencies that promoted residential and sspecial zoning projects.

Part of the funds that will be acquired from the new taxes and fees would be immediately put to use to address the growing issue of homelessness. Although cities such as San Diego have been successful in helping homeless residents find permanent addresses, other communities are facing uphill battles in this regard.

Aside from revenue collection, the new legislation will also create new bonds that will drive the state deeper into debt; however, investors have shown positive interest in these financial instruments since productivity in California is expected to keep increasing.

There is a lot more work to be done in addition to funding the intended $5 billion packages. Building affordable housing will also entail land acquisition measures that will be subject to environmental impact studies, and lawmakers still have to figure out how to tackle the exorbitant rental market in a way that does not ruffle feathers among California homeowners and real estate investors.

The affordable housing projects will also be subject to municipal approval, and this means convincing residents that their property values will not be affected by the proposed developments. To this effect, one bill seeks to streamline the process of approving construction permits for these projects.



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