Bill's $75 fee would add affordable housing
Carolyn Said | February 21, 2013
Money for affordable housing in California has been slashed even as rising rents and dwindling incomes make the need more acute, advocates say.
The California Homes and Jobs Act, SB391, introduced Wednesday by Sen. Mark DeSaulnier, D-Concord, would bring in about $525 million annually for affordable housing by imposing a $75 recording fee on real estate documents, excluding those related to sales.
California abolished redevelopment agencies during last year's budget crunch, wiping out over $1 billion a year for affordable housing. Another $500 million from bond measures passed in 2002 and 2006 has largely been depleted. At the same time, federal housing support has been cut back.
While the new measure will replace only about a third of the lost revenue, it's a critical first step, proponents said.
"It's really important that we get a revenue source so we can restart addressing our affordable housing needs," DeSaulnier said. "This is urgent. The average citizen in metropolitan areas of the state, despite the (real estate) implosion of 2008 and beyond, is paying more for housing, not less. We have some real affordable housing challenges in California."
The new money would have a multiplier effect, he said, helping to bring in $2.78 billion a year in federal funding and bank loans.
"With (the former money from redevelopment and state bonds) we were able to produce 3,000 to 4,000 affordable homes each year in the nine counties of the Bay Area," said Michael Lane, policy director at the Non-Profit Housing Association of Northern California, a trade group for Bay Area affordable housing developers. "If we don't replace these depleted and lost funds, we will only produce a few hundred affordable homes per year."
Mary Murtagh, CEO of nonprofit EAH Housing in San Rafael, which has built about 7,200 affordable units in California and Hawaii, had similar thoughts.
A sustainable source of revenue "is the lifeblood of the industry," she said. "Without it, construction will shrink radically."
Meanwhile, demand continues to soar, with about eight applicants for each new unit of affordable housing, she said.
The bill needs a two-thirds vote to pass. A similar measure introduced by DeSaulnier last year fell short by two votes. This year, the Legislature's Democratic supermajority may give it an extra edge, but no one takes that for granted. "I'm always sensitive to the fact that we have to be strategic about what we do with the supermajority," DeSaulnier said.
Gov. Jerry Brown's office did not return a call asking if he would sign the bill if it passes.
The California Bankers Association, which opposed the bill last year, now is taking a neutral stance. The California Mortgage Bankers Association said it does not yet have a position.
"This is a massive tax against property owners," said David Wolfe, legislative director of the Howard Jarvis Taxpayers Association. "These recording taxes are going to be detrimental to property owners up and down the state, especially when the housing market appears to be finally righting itself."
The California Association of Realtors supported last year's bill, once it was amended to remove fees on sales or real estate transfers. The bill also has some business support.
"When we survey our CEO members about the top impediments to doing business here, every year housing is the top vote-getter," said Shiloh Ballard, vice president of housing and community development for the Silicon Valley Leadership Group. "The more supply you create, whether affordable or market rate, helps to alleviate the problem for everyone on the income spectrum."
Her group also thinks it's "a huge benefit" that allocating more money for affordable housing would boost construction hiring. The bill's backers say it would create 29,000 jobs a year, largely in construction.
The new $75 fee would be collected by county recorders whenever a real estate document - other than those related to a sale - is recorded. Refinances, reconveyances, lot-line adjustments, notices of defaults, notices of trustee sale and quit-claim deeds are among the documents that would have the fee imposed. Such non-sale documents account for about three-quarters of real estate documents recorded.
The money would go into a homes and jobs trust fund to be appropriated by legislators. Typically, about a quarter to a third of such funds go toward down-payment assistance for low- and moderate-income families; the rest supports construction of new rental housing. The types of housing would address various needs, including low-income rentals, supportive housing for homeless people and farmworker housing.
California, which has some of the priciest housing in the nation, is "way behind many other less expensive states in terms of adopting a dedicated revenue source for affordable housing," Lane said.
"Many other states, including Washington, Oregon, Ohio, Missouri and Pennsylvania, use document recording fees as a dedicated revenue source for statewide housing trust funds."
Carolyn Said is a San Francisco Chronicle staff writer. E-mail: email@example.com Twitter: @csaid
Photo: Mary Murtagh is the CEO of the nonprofit EAH Housing in San Rafael. Photo: Sean Culligan, The Chronicle
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