California Attempts Housing Crisis Relief Through Regulatory Reform

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It’s no secret that California has a housing crisis, especially when it comes to affordable housing. The democrats in California has built housing bills that are not designed to save money. Instead, these bills create a plethora of additional fees for anyone who wants to build or buy and sell property. Instead of figuring out how to reduce the cost of doing real estate business, the California Democrats have done the opposite.

The Senate Bills

The first bill, Senate Bill 2, increases fees for filing real estate documents with county clerks. This bill is innocuously called “Building Homes and Jobs Act.” But, there is little that is innocuous about it. According to the wording of the bill, all filings for each real estate property would have a fee of $75, with the fees not to exceed $225 for each parcel. This is a hefty fee.

The money raised between the 2018 calendar year is already earmarked for two purposes. First, half of the money would go to local governments and the other half would go to the Department of Housing and Community Development for at-risk people experience homelessness. In the 2019 calendar year, the direction of money changes to the local government and the California Housing Finance Agency for low-income financing.

The second bill, Senate Bill 3, involves a ballot initiative to develop a bond for affordable housing. The bill also includes funding the CalVet Home Loan Program. The state government is looking for an addition $4 billion. One quarter of the bond would go to veteran housing. The other three-fourths would go to existing housing programs, infrastructure, and grant programs for affordable housing. The argument for this bill involves increases in homelessness in California, especially young people and veterans.

The third bill, Senate Bill 35, removes many of the steps that are involved in creating affordable housing. In most communities, affordable housing needs to be approved through a process that includes public input. This would no longer be the case as the government could approve new projects “by-right.” 

The Problems with the Senate Bills

As with every government bill, there are several details that should always be closely analyzed prior to making decisions. But, looking at the essence of the bills, it is easy to see the flaws. In Senate Bill 2, the fees appear to be excessive. There are so many costs associated with buying and selling property, which is part of the problem in California. By adding another fee, more money is taken out of the hands of people who already have problems finding affordable housing. The bill also has limited information about the way the fees will be spent. Yes, the bill clearly states where the money will go, but it does not clearly show how it will be spent.

Senate Bill 3 gives the residents of California a $4 billion bond to pay back. These are paid back through increased taxes. This is another bad idea. Yes, the fact that 25% of the bond goes to help veterans makes the bill sound like it is a good idea. Who doesn’t want to support veterans? But, the heart of the bill is not dedicated to veterans. This is the problem and the misleading nature of the bill. Why not just make the bill a $1 billion bond to support veterans? That would make it easier for taxpayers and voters to swallow.

Senate bill 35 is extremely problematic. This takes away the citizens’ ability to decide what will be built in their communities. Low-incoming housing can lower the value of housing in the vicinity. This is the problem that the bill is trying to curb and smart citizens will fight to keep their property values high. This bill seems to take away the right of people to use their freedom of speech.

What Should Be Done Instead

While it is noble that the California government is attempting to solve a massive problem, the government is not going about it in a way that makes sense. The State of California should not go it alone, instead there should be a partnership between the state and businesses. This would add balance without overburdening the people of California with excessive taxes and fees. By giving businessses the opportunity to be involved in solving the problem, they can make money while helping people in the community. A partnership would be a win-win situation for the public and private organizations as well as the people of California.