The housing affordability issue has been a dire one throughout the state of California for some time now, but perhaps there’s a light at the end of the tunnel.
Recently, the California State Senate approved a real estate transaction fee that could make as much as $300 million available in funding to build more affordable housing across the state.
Bill 27-12 has been passed and is now in the hands of the State Assembly. The legislation would impose a $75 fee on real estate transaction documents, including deeds and notices, with a limit of $225 per deal.
Approximately 1.5 million California families are in need of affordable housing. Even more disturbing is the state’s homelessness rate: of all homeless people in the country, 21.5% are in California, the largest share of all states.
Only thirty-two percent of households in the Golden State could afford to buy a median-priced home in the first quarter of 2017, down from 34% from the same time last year. Currently, the median single-family home price in California is $550,200, up 2.3% from April and up 5.8% from May 2016. That’s more than twice the national median home price of $266,200.
In terms of homeownership rates in the country, California ranks 49th. When it comes to affordability rates, California ranks 50th.
Such numbers have placed a great amount of pressure on the state to make the approval process for new construction much easier and more streamlined.
The legislature is aimed at getting rid of some of the hurdles that hinder adequate development, such as lowering the cost of building new homes, alleviating issues related to obtaining the necessary permits, and boosting affordable housing spending in the state.
Up until now, the current 50-year old state law – which was designed to help make housing affordable for all Californians – hasn’t been able to do enough to spark new home construction. From 2006 to 2014, less than half of the 1.5 million new homes that lawmakers said developers would have to construct were actually built.
Several housing bills have gone through legislature, but none have been able to pass both houses and get Democratic Gov. Jerry Brown’s approval. The new bill would not be applicable to commercial or residential transactions, but would apply to other real estate transactions, such as mortgages or refinancing.
At the end of the day, making California housing affordable for families will require new laws to be introduced and passed that can streamline the process to approve affordable housing projects. The new law will hopefully start paving the way to improve housing affordability in the state of California and help more families find it financially easier to get into the market.