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New Report Shows Legislature’s “Housing Day” Won’t Increase Affordability – Pacific Research Institute

New Report Shows Legislature’s “Housing Day” Won’t Increase Affordability

California’s Legislature made a run at fixing the state’s housing crisis as the session was ending a bit more than a month ago. But it won’t solve anything next year, as home prices are expected to rise in 2018. In fact, lawmakers’ poor-faith effort isn’t likely to help moderate home prices ever.

The California Association of Realtors released in the middle of October its forecast for next year, and the expectation is that the median price of a home will increase 4.2 percent to $561,000, up from $539,000 this year. That’s a little more than half the predicted 7.2 percent jump for 2017, and is the smallest increase in years. It’s a blip compared to the 11.6 percent increase in 2012 and the 27.5 percent spike in 2013. Yet, as the association says, the home affordability crisis remains one of the state’s “slow-moving disasters.”

The last hours of the just-finished session could have been called “Housing Day,” as 15 housing bills were passed by the Legislature. In all, more than 130 were introduced over the term. But the one change that would make an impact — reform of the California Environmental Quality Act — was absent. Instead, lawmakers gave us legislation such as Senate Bill 2, the so-called Building Homes and Jobs Act, which will levy a $75 tax on every real estate transaction and consequently increase the cost of homes.

Lawmakers also left us Senate Bill 3, a $4 billion housing bond. Should the bond be approved next year, $3 billion “would be used to finance various existing housing programs, as well as infill infrastructure financing and affordable housing matching grant programs.” The remaining $1 billion would be directed toward “a specified program for farm, home, and mobile home purchase assistance for veterans.”

This is a legislative fantasy. As Assemblyman Jay Obernolte, a Republican from Hesperia, said during the SB 3 floor debate, “we can’t spend our way out of this problem with government spending.” He also noted in August in a San Bernardino Sun August op-ed that SB 3 “would increase state debt and do nothing to help our middle-income families.”

And so, it goes with almost every bill, housing related or not, passed in Sacramento. Public debt goes up, taxpayers are gouged, regulators are loosed. There’s no justice, equity, or fairness in these proposals. If this trend continues, one day there will be many more ex-Californians than Californians. Only then will the housing shortage become a housing surplus.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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