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Rent control, property taxes and taller apartment buildings: California considers major housing bills in 2018

Source: The Mercury News

The state’s housing crisis is back on the agenda as California lawmakers return to work after a months-long recess. Proposals floated on the first week of the year would bring major changes to laws governing property taxes, rent control, and local zoning rules. Senate Democrats are also proposing a work-around for the recent GOP tax overhaul, which set a $10,000 cap on state and local tax deductions.

Making sense of the story

  • Deduction cap: A bill introduced Thursday would allow Californians to instead donate to the state, receiving a dollar-for-dollar tax credit, so they can — in theory — deduct the full amount from their federal taxes. There is no cap on deductions for charitable contributions.
  • Rent control fight: Should California repeal a landmark 1995 law that keeps local rent control ordinances in check? The law, known as Costa Hawkins, blocks cities from applying rent-control policies to homes built after 1995 or to single-family homes. It is hugely popular among landlords, but some advocacy groups for renters are demanding that the state lift those restrictions, allowing cities to address runaway rents as they see fit.
  • New tax breaks for homeowners? Proposition 13, passed in 1978, keeps annual property tax increases to a minimum, even if a house quadruples in value, until a property changes hands. The California Association of Realtors is gathering signatures to qualify an initiative that would let those over 55 take their low property tax base with them anywhere in the state, as many times as they move.
  • Down payment help: Assemblyman Marc Steinorth is bringing back a revised version of a proposal he introduced last year: to help aspiring first-time home buyers save up for a down payment with a special savings plan. The money would be withdrawn, tax-free, as with a Roth IRA or 529 college savings plan.
  • Homeowner Bill of Rights: Portions of this 5-year-old state law expired Jan. 1, and Senator Jim Beall has introduced legislation — Senate Bill 818 — to renew mortgage and foreclosure protections, such as the right to appeal when a loan modification application is denied.
  • More apartment buildings: Senator Scott Wiener is set to introduce Senate Bill 827, which would require cities to allow denser housing developments to be built within a half mile of transit hubs.
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