How Does California Address the Affordable Housing Crising text in a miniature house and pile of coins on the top of a blueprint

California is the golden state but that doesn’t mean it doesn’t have its share of problems. Affordable housing seems to be one of the big problems.

Last year’s fires in northern and southern California exacerbated the problem. To help alleviate the housing affordability crisis, fifteen new bills were signed into law last September by Governor Jerry Brown. One bill included the ability of local governments to require developers to include affordable rental units in new construction. Another will try to tackle the housing supply shortage by making it more difficult for cities to ignore the shortage of housing based on reports they receive every eight years stating what they need to build to meet regional housing needs. In October, Governor Brown signed an executive order to ban price gouging in rent increases in wake of the North Bay fires. While the order was originally for 30-days, it was extended to April 18, 2018.

The law prohibits the raising of the price of rental housing by more than 10 percent after an emergency has been declared. Last year President Trump and Governor Brown declared the fires a state of emergency. Violators of the law could face up to one year in Jail, $10,000 fine or both.

In Sacramento an attempt to repeal a law restricting rent control died earlier in January. The law known as Costa Hawkins prohibits 15 cities from imposing rent control on condominiums, single family homes or apartments built after 1995 or in some cases much earlier.

In cities such as Oakland and Berkley that adopted rent control in 1980, the cutoff states that anything built afterward cannot be subject to rent control. Costa Hawkins also prohibits cities from dictating how much a property owner can raise the price after a tenant moves out, a policy knows as vacancy control. If repealed, a tenant who moved in a property more than 15 years ago and was subject to rent control and was only paying $750, the owner couldn’t increase the rent by more than the allowed amount regardless of what the current market rental rate once the tenant vacates. If a comparable property is renting for $1500, the owner can’t increase the rent to match that amount. S/he would only be able to increase it by the amount the city dictates.

A wooden carved house and a incrementing piles of coins beside itCloser to home, rents in the central valley continue to increase. A recent search for a two-bedroom apartment on Craigslist in Modesto showed prices starting at $1100. Prospective tenants squawk at the rates stating there aren’t enough paying jobs to afford that kind of premium. On the other hand, owners say they invest upwards of $10,000 to update properties with new flooring, granite countertops, designer paints, new appliances, etc to meet the demands of the consumers not to mention pay increased taxes and maintenance costs. The changing landscape will certainly affect both renters and investors. Proponents of the Costa Hawkins have promised to repeal the law by getting it onto the ballot this year by going directly to the voters, without the intervention of state officials.

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