Affordable housing advocates across California are scrambling for alternative sources of funding following the closure of the state’s redevelopment agencies last February. A state law upheld by the California Supreme Court mandated the dismantling, which aims to redirect billions in property tax earnings held by the redevelopment agencies (RDAs) back to local governments to help close a huge gap in the state’s general fund. Housing advocates are now pinning their hopes on state legislation for a new source of funds, a statewide housing trust fund, which will be a permanent source of funding for affordable housing. State Senate President pro tem Darrel Steinberg (D-Sacramento) and Mark DeSaulnier (D-Concord) introduced Senate Bill 1220, which will charge a $75-fee per document recording of non-sale real estate transactions — maps, easements, liens, title changes and notices of default. Funds collected will go to the dedicated state housing trust fund. Thirty-nine states have such trust funds, but California has none. Supporters estimate that the fee collection could raise “$300 million in years with low activity and $722 million in high-activity years.” The trust fund will support the construction of affordable housing, the renovation of distressed housing stock, and foreclosure prevention and homebuyer assistance programs.
The California Association of Realtors dropped its opposition to the bill once it was made clear that the purchase and transfer of residential and commercial property will be exempt from the fee.