STATE PROPOSALS FOR PROMOTING HOUSING PRODUCTION AND AFFORDABILITY

Historically, when adequate housing is in short supply and citizens are unable to find a place to live close to their jobs and schools, rental property owners, in particular, face demand from interest groups and lawmakers to "help reduce the pressure." Immediate gratification, on the part of elected officials, is usually the "name of the game," especially when reelection is upon them, and/or tenant "horror stories" outweigh housing providers’ elation over the state of the economy. And it’s no surprise that "immediate gratification" measures come in the form of rent control proposals and various tenant protections to help ensure– as they will argue– that our homeless population does not increase and that tenants are not forced to live in overcrowded situations because they cannot afford to pay the rent. Whether or not you buy these arguments, they play well in the media and with city council. Long-term solutions are put on the table by rental housing providers and other interest groups who understand that rent control has never helped to build one new housing unit and that it, in fact, impedes further development and can give the local economy a black eye in the long run. Unfortunately, in this economy, the long-term solutions don’t get as much attention from local lawmakers who utilize the rental housing industry as the "fall guys."

Fortunately, there are some lawmakers in Sacramento who understand the big picture and know California’s need for housing. Here’s a look at what we expect this legislative session. We will keep you posted.

First and foremost, the California Apartment Association will sponsor legislation to put roadblocks in the way of local governments that pass laws to stop multi-family housing construction. This legislation is extremely important in light of our current housing imbalance.

Legislation will also be introduced to impose fiscal sanctions on local governments if they fail to comply with state housing element law. Under current state law, each local government is required to update the housing element of its general plan every five years. In order to comply with state law, local planners must articulate - within their housing elements - programs for meeting the community’s housing needs, and they must identify land that is appropriately zoned to facilitate the development of housing that is affordable to all segments of the community.

We also anticipate legislation to increase the amount of state tax credits available for low-income housing from $50 million to $70 million per year.

Legislation will be introduced to increase the amount of state grants and loans available for property owners who turn existing commercial property into rental housing units.

Through a system of financial awards, local governments will also be encouraged to produce housing in their communities.

We will see legislation that calls for a statewide study on fees paid to the city, county, or special districts by a developer or builder who constructs new housing.

Legislation will also present various incentives to developers who construct new housing.

A resolution may also come forward from the California Legislature that encourages Congress and the President to consider a return to the pre-1986 depreciation tables so that rental property owners may depreciate their property interests over a shorter period of time.