California’s rent relief law is only a “non-factored factor” in the market for new homes, a top housing official said.
That’s despite a state law passed in 2014 allowing landlords to avoid paying rent in California by buying or renting from others.
Gavin Newsom, who signed the law, said in an interview with The Associated Press he doesn’t think it is a factor in how prices are set.
“I would say that’s a non-factor,” Newsom said.
“This is a state-by-state issue, and there are a lot of states that do this, and a lot that don’t.
It’s a very, very complicated thing.”
He said he believes it will take some time for landlords to adjust to the law.
“It’s a little bit more complicated than a mortgage or a credit card, it’s a real estate transaction, so we have a long way to go,” Newsome said.
The law was originally passed in February 2015 as part of a package of bills designed to curb California’s spiraling cost of living crisis.
The measure created a rebate program to help lower-income residents buy homes and reduce the state’s property tax burden.
It also allows homeowners to deduct the cost of new home construction from their taxes.
The new law also made it illegal for landlords or other owners to reduce their rents to a certain percentage of the home’s value.
It allows them to deduct from their property taxes that percentage from the value of their new homes.
The Legislature approved the measure in January 2016 and then passed another law in April to provide up to $1 million in rebate payments to the state.
The money, which can be used to pay for the construction of new homes and the purchase of affordable housing, is aimed at helping the state reduce its $2.5 billion budget deficit and save $3.7 billion in 2019.
“As you might imagine, it wasn’t the most popular bill in the Legislature,” said Eric Leung, president of the California Home Builders Association, which represents the state homebuilders.
“But it’s important that we do everything we can to protect our industry from the current crisis.”
Leung said the rebate payments help pay for a lot more than building homes.
“You can buy a new home, but if you have a mortgage, you have to make sure you don’t have any debt,” he said.
Newsom has said the law is the biggest barrier to homeownership in the state and has said he wants to see the rebate program expanded to cover the cost for all of the states estimated $9 billion budget shortfall.
Leung and other critics say the rebate is not enough to solve the state s housing crisis, which they say has ballooned over the past decade due to a shortage of housing, a surge in new housing construction and an aging population.
The rebate program has cost the state $3 billion since the program was enacted, and Leung estimated the costs could top $8 billion by 2031.
“In the long term, this is going to be a huge problem for California,” Leung told the AP.
The state has been able to find help for some homeowners who were priced out of the market and for those who were already struggling, he said, but many people still have trouble paying rent or mortgage interest.
Leeng said the state is trying to expand the rebate and said it could eventually cover the costs for every Californian.
Leong and other supporters say the program has helped lower the cost and pushed the number of people who have homes in the Bay Area to record levels.
They also point to research by the nonpartisan Joint Center for Housing Studies that showed California’s median home price reached $1.05 million in 2016, the highest in the nation.
The group said a recent study by the Center for American Progress found California homeowners who lost their homes in 2016 and are still trying to pay rent paid less than the median rent for the region of $3,500 a month.
“California is on track to have a $3 trillion housing bubble in just a few years,” said Alex Wubbels, president and CEO of the Bay State Housing Association.
“So we’re going to have to build more housing if we want to keep the bubble going.”