Legislative Day Focuses on Housing Affordability Concerns and California’s Drought
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C.A.R. President Chris Kutzkey told members this year marks 110 years of member involvement, when dedicated members began working for homeownership and the preservation of private property rights. C.A.R. currently has 180,000 members and is up against well-organized powerful special interests whose proposals hurt housing and homeownership.
“We are here to stand up for those who can’t speak for themselves,” said Kutzkey
Assembly Speaker Toni Atkins told REALTORS® she is passionate about affordable housing and has made it her priority. “Everything improves when housing is addressed,” said Atkins.
Atkins is championing an affordable housing finance package of bills and is the author of AB 1335, which would create a permanent source of affordable housing funding by levying a $75 fee on real estate transaction documents. C.A.R. opposed a similar bill last year, which did not pass.
Assembly Republican Leader Kristin Olsen also addressed the membership and pledged more can be done by unifying both parties in a common core. She said up until now housing has been approached in piecemeal ideas. She opposes AB 1335 and contends the bill merely addresses the symptoms.
“We need to get to the root of the problem,” Olsen said. She called on both parties to come up with a solution together.
At the joint luncheon with members of SILVAR, SAMCAR (San Mateo County Association of REALTORS®) and SCCAOR (Santa Clara County Association of REALTORS®), California State Controller Betty Yee shared her personal history. The child of Chinese immigrants, Yee handled the books in her family’s neighborhood laundry and dry cleaning business while growing up. She translated financial transaction for her parents and gained an understanding of the value of money.
“When before I minded the store for my parents; now, I’m minding the store for the state of California,” said Yee.
Yee said it is her responsibility to see that every public dollar that is being spent is not wasted. Today, California’s economic outlook looks good with a rainy day fund. For the fiscal year to date, General Fund receipts total almost $75 billion, about 2.1 percent greater than estimates. All three of the major sources of revenue – personal income tax, retail sales tax, and corporation tax – are higher than expected for the fiscal year so far.
The state is not out of the woods yet, said Yee, as there are those in the legislature who want to use that extra money to bring back programs cut during the downturn. Others are calling for comprehensive tax reform. She has appointed a Council of Economic Advisors to assess the impact of proposals on all taxpayers.
Yee sees a serious debate occurring front and center of the legislature on income inequality and the lack of affordable housing that could drag the economy. “We have got to address affordability. It’s an issue,” said Yee.
Yee added the drought and global climate change are serious issues that also need to be addressed. She praised REALTORS® for their professionalism and adherence to a code of ethics and invited them to join in the conversation and be part of the solution to these problems.
After lunch, SILVAR members met Assembly members Evan Low and Rich Gordon, State Senator Jerry Hill and staff of State Senator Jim Beall and asked their support on the following hot issues:
Vote YES on C.A.R. –sponsored bill AB 237 (Daly), which would require local governments to notify all property owners of an upcoming vote on a parcel tax, even if the owner doesn’t reside in the area. Property owners who pay the parcel taxes approved by the voters should have the right to be aware of an impending vote. AB 237 requires property owners to be informed by U.S. mail of all properties within their respective jurisdictions within one week of voting to place a proposed parcel tax on the local ballot.
Vote NO on SB 8 (Hertzberg) – Service Tax. C.A.R. is opposing legislation to impose a service tax, essentially a sales tax on services in California that includes real estate transaction services. Real estate transactions, which are “services intensive,” would be especially hard hit by a service tax. Services that would be taxable would include appraisal fees, brokerage fees, home inspections, Natural Hazard Disclosure (NHD) reports, pest control inspections, title insurance, escrow fees, loan origination fees, home warranty policies, home improvements to prepare a property for sale (e.g. including painting, carpet cleaning, landscaping and staging), and various legally-required retrofits. A service tax would significantly increase the cost of buying or selling a home and negatively affect housing affordability.
Vote NO on SB 364 (Leno) – Ellis Act Restrictions, which forces rental property owners to stay in the rental housing business for at least five years. SB 364 will substantially limit a property owner’s right to legitimately occupy their own property and creates an unreasonable and unjustified attack on property owners that legitimately want or need to go out of business. Though the bill only applies to San Francisco, C.A.R. is worried if it passes, it would open the door to other jurisdictions making the same request.
The legislators thanked REALTORS® for coming to Sacramento and personally speaking to them about the issues. They echoed the keynote speakers of the day concerns about the housing affordability issue and the drought.
Addressing REALTOR® concerns about SB 364, Gordon said the bill may be the solution for San Francisco, but it is not the solution for the state of California. A better approach is more housing, not just preserving some of the existing stock.
“At the end of the day, we need to create more housing opportunities and ways to get more housing – not just affordable and low cost housing, we need housing at all price ranges,” said Gordon.
Housing affordability is a critical and serious challenge for California, said the legislators. “We need to collectively solve these problems. It hurts me that the American dream is not attainable for generations after us. We have a crisis in the state of California – how to fund and make sure that we have the opportunity for good paying jobs to buy a house and live in the community we work in,” said Low.
On the drought, the legislators said there is a need to make drastic changes in how the system works, like recycling and desalination, instead of continued reliance on the snow-packed Sierras.
“This is a long haul. We need to make structural changes on how to deal with the issue,” said Hill.
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