In an attempt to provide a solution for California’s current housing affordability crisis, the California Association of REALTORS® presented its 2001 legislative agenda. The legislation, which is designed to help renters and first-time homebuyers and to increase the supply of housing throughout the state, is composed of three bills:
1) Mortgage Loan Insurance Bill: This bill separates the California Housing Loan Insurance Fund (CaHLIF) from the California Housing Finance Agency (CHFA), permitting CaHLIF to operate as an independent mortgage insurer and allowing it to compete more effectively with private mortgage insurers. This bill will primarily benefit first-time homebuyers who do not have the requisite 20 percent down payment.
2) Housing Reform and Incentives Bill: This bill will make it more difficult for local government to deny housing development projects for low-, very low-, and moderate-income households. Under this legislation, if a court finds that a local government has inappropriately disapproved a project, the court can order the local government to approve the development under the rules already established by the local government; award attorneys’ fees to developers who have not had the right or ability to recover them in the past; and award damages if the local government’s housing element is not in substantial compliance with the law.
3) Security Deposit Guarantee Bill: This bill sets up a voluntary program for landlords and tenants to assist tenants who do not have the requisite security deposit to move into rental housing. Under the bill, local governments may apply for an allocation and create a fund to serve as a guarantee that is available to landlords. If a tenant in the program defaults and there is not sufficient security deposit paid to cover the cost of arrears, damages, or other legitimate charges, the landlord may recover that security deposit from the fund.
Less than a third of California families are currently able to purchase a home due to the high cost of housing in the state. “The inability of California families to purchase homes of their own could be the Achilles’ heel of California’s economic development,” stated C.A.R. President Gary Thomas. “Even if the economy continues to forge ahead with productivity gains and low inflation, California is vulnerable to other areas of the country where housing is more affordable.”
The San Francisco Bay Area and Southern California are ranked near the bottom in terms of homeownership levels compared to other metropolitan areas in the U.S. According to data generated by C.A.R. economists, only 34 percent of the families in Los Angeles can afford to buy a median-priced home, and only 10 percent can afford it in San Francisco.
C.A.R., headquartered in Los Angeles, is one of the largest state trade organizations in the U.S., with more than 97,000 members dedicated to the advancement of professionalism in real estate.
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