California’s Democrat-controlled legislature wants to solve the state’s housing crisis by increasing taxes and fees on real estate to fund more affordable housing.
State Senator Toni Atkins (D-San Diego) is sponsoring Senate Bill 2 (SB-2), known as the “Building Homes and Jobs Act,” which proposes that every real estate parcel will pay a minimum $75 fee for any one of a number of real estate transactions. The maximum amount of fees per transaction is set at $225.
Atkins told the Sacramento Bee that her fee bill will address California’s housing crisis by providing about $250 million a year in subsidies to build affordable housing. She blames the current housing shortage on Democrat Governor Jerry Brown’s 2011 elimination of over 400 redevelopment districts,which had helped finance affordable housing and rental assistance for 60 years.
Breitbart News reported three months ago that there were over 100 housing bills that had been introduced in the state legislature this year that promise to increase the amount of affordable housing through more taxes or fees.
Democrat legislators have become emboldened on raising taxes for social priorities, after state voters in November approved continuing the nation’s highest income tax, increasing a tobacco tax, and establishing a marijuana tax.
More importantly for Democrats, about 80 percent of the approximately 430 local tax sales, property, and user fee increases to support issuing more bonds passed in the 2016 election, according to the California Local Government Finance Almanac.
With voters more open to tax increases, the California Department of Housing and Community Development (DHCD) published a report, titled “California’s Housing Future: Challenges and Opportunities,” which highlights that the home ownership rate in California, at 53.4 percent, is the lowest since the 1940s.
The agency estimated that the state faces a one million home shortfall, because “during the last ten years, California housing production averaged fewer than 80,000 new homes each year, and ongoing production continues to fall far below the projected need of 180,000 additional homes annually.”
DHCD stated that the heaviest housing burden has fallen on California’s renters, with more than 3 million households now paying more than 30 percent of their incomes toward rent, and 1.5 million households paying more than 50 percent of their incomes toward rent.
Although the vast majority of the 100 housing bills in Sacramento propose more taxes and fees to spur housing, a non-partisan California Legislative Analyst’s Office (LAO) 2015 study blamed the vast array of state, municipal and school development fees as one of the reasons California housing prices and rents are about three times the national average.
The LAO found that California local government 2012 development fees (excluding school and water–related fees) were just over $22,000 per single–family home. That was almost four times the national average at the time of $6,000. Furthermore, the LAO found that California’s building codes and standards are considered “more comprehensive and prescriptive, often requiring more expensive materials and labor” to achieve certain energy efficiency goals.
California real estate developers contacted by Breitbart News stated that the total cost per single-family home for development fees, environmental compliance, and school facility fees can easily exceed $100,000 in most of the state, and $200,000 on the coast.