California is currently facing a serious shortage of affordable housing. The housing crunch is impacting individuals and businesses in all parts of the state. Businesses are having trouble attracting and retaining employees and individuals face longer commute times and overcrowding, among a host of other issues. To combat the affordable housing crisis, the California Legislature recently passed the Building Homes and Jobs Act. Effective immediately, the Act adds a new section to the Government Code (Section 27388.1) and a new chapter to the Health and Safety Code (Division 31, Part 2, Chapter 2.5).
Effective January 1, 2018, the Act imposes a $75.00 fee for the recording of certain real estate documents like HOA governing documents and collection documents (i.e. CC&Rs, liens, notices of default, etc.) and cannot exceed $225.00 per transaction. The fees generated from the Act will be made available to local governments and the Governor’s Office of Planning and Research through the creation of the Building Homes and Jobs Trust Fund (“Fund”). The Fund will be managed by the California State Treasury.
The following text is directly from the act itself.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known as the Building Homes and Jobs Act.
(a) The Legislature finds and declares that having a healthy housing market that provides an adequate supply of homes affordable to Californians at all income levels is critical to the economic prosperity and quality of life in the state.
(b) The Legislature further finds and declares all of the following:
- Funding approved by the state’s voters in 2002 and 2006, as of June 2015, has financed the construction, rehabilitation, and preservation of over 14,000 shelter spaces and 245,000 affordable homes. These numbers include thousands of supportive homes for people experiencing homelessness. In addition, these funds have helped tens of thousands of families become or remain homeowners. Nearly all of the voter-approved funding for affordable housing has been awarded.The requirement in the Community Redevelopment Law that redevelopment agencies set aside 20 percent of tax increment for affordable housing generated roughly $1 billion per year. With the elimination of redevelopment agencies, this funding stream has disappeared.
- In 2014, the Legislature committed 10 percent of ongoing cap-and-trade funds for affordable housing that reduces greenhouse gas emissions and dedicated $100 million in one-time funding for affordable multifamily and permanent supportive housing. In addition, the people of California thoughtfully approved the repurposing of $600 million in already committed bond funds for the creation of affordable rental and permanent supportive housing for veterans through the passage of Proposition 41.
- In 2015, the Legislature approved $2 billion in revenue bonds for the construction and rehabilitation of permanent supportive housing for homeless individuals with mental illness through the “No Place Like Home” initiative and increased funding for the CalWORKs Housing Support Program to $47 million per year. Another $45 million was directed to Emergency Solutions Grants to fund rapid rehousing, outreach, shelters, and homeless prevention and $10 million was provided to reduce homelessness among families who are part of the child welfare system.
- Despite these investments, the need for affordable housing in the State of California greatly exceeds the available resources, demonstrated by the Public Policy Institute of California finding that, as of January 2016, 31.5 percent of mortgaged homeowners and 47 percent of all renters are spending more than 35 percent of their household incomes on housing.
- California has 12 percent of the United States population, but 20 percent of its homeless population. California has the highest percentage of unsheltered homeless in the nation, with 64 percent of homeless Californians not having shelter. California has 24 percent of the nation’s homeless veterans population and one-third of the nation’s chronically homeless population. California also has the largest population of unaccompanied homeless children and youth, with 28 percent of the national total.
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