State bill proposes fee to deal with affordable housing issue

A bill seeking to create a permanent source of funding for low-income housing is slated to go before the Assembly Appropriations Committee Thursday, one hurdle among many it'll have to clear for passage.

If passed, advocates said Assembly Bill 1335 could make a dent in Southern California's housing crisis.

The bill would add a $75 fee to some real estate transfers and put that money into a fund for development of below-market-rate properties. The fee would not apply to home sales, but rather situations where a property is transferred between family members or in and out of trusts.

"It'd be a big, honking hairy deal," said Alan Greenlee, executive director of the Southern California Association of Nonprofit Housing. "L.A. County particularly — California generally — are suffering from an extreme lack of homes that are affordable and at the same time, there's been a significant reduction in the public financing that's been made available to do this kind of development."

The state's redevelopment agencies dissolved in 2012 amid concerns they mismanaged money, leaving a major gap in funding for development of subsidized housing for California's poor.

That, combined with the expiration of a swath of bond measures enacted years ago, has cost Los Angeles County alone a half billion dollars a year less in investment for affordable housing, Greenlee said, making Los Angles and Orange counties the "overcrowding epicenter" of the country, with too many people packed into too small units to make the rent.

Only one in four projects that applies for public funds gets it, he said.

Assembly Speaker Toni Atkins (D-San Diego), who introduced the bill along with a package of affordable housing proposals, said the bills would produce a combined $300-500 million annually for low-income developments.

"California is going to increase population, so housing costs are going to get more and more out of reach - and I'm talking rents and home ownership," Atkins said.

It will require support from two thirds of the legislature to pass, meaning some Republicans would need to get on board. Assembly Republican Leader Kristin Olsen has said she'll oppose the bill because it addresses symptoms of the housing crisis, rather than the core problems.

It's not the first time this has been attempted--previous incarnations of the bill have died in past years, for lack of support of the California Association of Realtors.

Alex Creel, chief lobbyist for the group, said after negotiations with Atkins, the Realtors are supporting the proposal. Changes include capping the fees at $225 per transaction, adding an oversight board to the fund that includes Realtors, and setting aside 20 percent of the fund for owner-occupied developments.

Atkins said her preference would have been to include home sale transactions, which many other states do. That was in the original bill but was pulled out during negotiations.

"This is good policy and it is the right thing to do given our crisis that we have, but it's also politics," she said.

The Los Angeles County Board of Supervisors backed the bill. But Orange County's board voted to oppose it, saying the associated administrative costs are a waste of taxpayer dollars.

“AB 1335 will massively increase costs for working Californians to record real estate documents and could force them to choose between recording the documents they need to protect their property or having to spend their hard-earned dollars on other necessities to support themselves and their families," Orange County Supervisor Michelle Steel said in a statement to KPCC. "Instead of growing government and increasing costs on hard-working Californians, the State should focus on reducing regulations to make it easier to build truly affordable housing options for all.”

Atkins said the message she's taking to Republicans is the same message she's taking to members of her own party.

"I think it's a matter of showing them what their communities can get," she said, from the cities to the rural areas. "There's not a community up and down this state that doesn't say that they're in crisis right now because of housing availability and prices."

Greenlee said the fund would touch a population that largely remains ignored by safety net institutions.

Recent interest in housing homeless veterans and the chronically homeless has brought some more resources to aid the very, very poor but the working poor haven't gotten as much attention.

"The sector in between the really desperately needy and the really rich folks--that needs some help, too," he said.

An earlier version of this story incorrectly referred to the California Association of Realtors. KPCC regrets the error.