With the recent dissolution of more than 400 redevelopment agencies across the state, support for affordable housing will be diminished by at least $1 billion annually.
To make up the shortfall, a Bay Area lawmaker is proposing to impose a $75 fee on documents recorded by real estate agents in the state to raise about $700 million annually.
Initially, the California Association of Realtors opposed the bill but modifications to it have now made the legislation more palatable for real estate agents since the fee will neither be imposed on the transfer or sale of real property nor will it impose a transfer tax in the form of a point-of-sale document recording fee.
The fee will be imposed on other documents, however, such as grant deeds or notices of default.
The Housing Opportunity and Market Stabilization Trust Fund, Senate Bill 1220, authored by state Sen. Mark DeSaulnier, D-Concord, has the broad support of affordable housing advocates including the Housing Leadership Council of San Mateo County, Silicon Valley Leadership Group and Foster City-based MidPen Housing.
It is opposed by the California Taxpayers Association, however, since the documents and proposed fees have no relation whatsoever to affordable housing, said spokesman David Kline.
"They call it a fee but it is a tax,” Kline told the Daily Journal Wednesday.
Affordable housing should be paid for out of the state’s general fund, Kline said, weighed equally with other state programs.
"It’s not good fiscal policy,” Kline said.
The legislation will be heard in the Transportation and Housing Committee next week.
Assemblyman Jerry Hill, D-San Mateo, told the Daily Journal he "likes Mark’s bill.”
The state is also working on ensuring that billions set aside for affordable housing collected by redevelopment agencies over the years will still go toward the construction of new affordable housing units, Hill said.
RDAs were required to set aside 20 percent of all tax proceeds for affordable housing and Assembly Bill 1585, co-authored by Hill, will allow for low- and moderate-income housing funds from a dissolved RDA to be transferred to successor agencies, generally the city, to be applied toward building affordable housing.
San Mateo County is one of the least affordable in the state in the rental market, said Joshua Hugg, program director with the Housing Leadership Council of San Mateo County.
DeSaulnier’s legislation does not replace the loss of RDA funds, Hugg said, but will help fill the gap.
"We are strong supporters of the legislation,” Hugg said.
The HOMeS Trust Fund will require two thirds support in the Legislature for passage.
DeSaulnier told the Daily Journal it will "be a challenge to pass” with the two-thirds requirement.
"Areas like San Mateo, Contra Costa and San Francisco counties need affordable housing,” DeSaulnier said. "Otherwise, people will be commuting farther to work and they just can’t afford it.”
The need for affordable housing is high in San Mateo County and the Bay Area. Last year, MidPen Housing opened Peninsula Station in San Mateo, a 68-unit family housing project that had more than 1,300 applicants.
Assemblywoman Fiona Ma, D-San Francisco, has introduced legislation, AB 585, to create tax increment financing zones within a half mile of a transit hub.
The bill includes a 20 percent set aside for affordable housing, similar to the RDA laws.
Ma supports DeSaulnier’s bill.
"I completely support this bill and others like it to create and preserve affordable housing around the state,” Ma wrote the Daily Journal in an email. "San Francisco has always been a leader in providing affordable housing options to working families. SB 1220 continues the important work that redevelopment agencies made to grow our economies and keep our communities strong.”
DeSaulnier does not like raising fees or taxes generally, especially when the economy is sluggish, but said the legislation will help to create jobs and provide housing for those most in need.
Bill Silverfarb can be reached by email: email@example.com or by phone: (650) 344-5200 ext. 106.