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C.A.R. Legislative Update

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With the Legislature up and running in full force, this week we share an update on three CALIFORNIA ASSOCIATION OF REALTORS® sponsored bills. For two of the bills, the focus is to help ensure transparency on the costs attached to housing and housing production. For the third, the focus is to help reduce the costs to construct affordable housing.

AB 119 (Salas) Special Districts: Fee Transparency

Direct fees on residential parcels of land have been a growing local government finance tool since the creation of Mello-Roos and the establishment of benefit assessment districts. These districts allow special fees to be imposed on property owners to finance public improvements like park maintenance, water, electricity, sewage and drainage, infrastructure and more. AB 119 would create more transparency for the buyer about these fees before entering into the transaction. It would require the County Auditor/Controller to post the combined direct levies accessed on real property along with the current tax rate on their website. Additionally, if a County Auditor/Controller posts the contact information for each direct levy accessed within their jurisdiction, that notice shall also include a range fees accessed on individual parcels of real property subject to the special district’s assessment.

 

AB 244 (Blanca Rubio) Updating California’s Affordable Housing Cost Study

Home production cost increases are often passed along to buyers in the form of higher home prices. Sponsored by C.A.R., AB 244 would require the state’s housing agencies to update the California Cost Study, last released in October 2014, to provide actual costs to constructing affordable and market rate housing. This transparency of these costs is crucial to solving the state’s housing supply crisis. 

 

AB 571 (Mayes) Density Bonus: Fee Reduction to Construct Below Market Rate Unit

Fees and costs associated with the construction of affordable units are often passed along to buyers in the form of higher home prices or can increase the amount of subsidy needed to build affordable housing units. Sponsored by C.A.R., AB 571 prohibits local governments from assessing affordable housing fees on the deed restricted affordable units contained within a density bonus application. Affordable deed restricted housing should not be required to pay a fee intended to construct other affordable housing as it simply increases the cost of the affordable housing being built. This fee only serves to increase costs to construct deed restricted affordable housing, making it less likely that developers maximize the affordable unit set aside within their density bonus application.


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