Microbubbles can be found in different metros across the country, but pending legislation could help ease the burden on the housing market, according to an Op Ed from the LA Times.
California is one state where the effects of inventory shortage and rising home prices are strangling the housing market. As Zillow reports, the median home price for existing homes on the market is $499,000, and the median home value is $505,800. Year-over-year, home prices have risen 7.4 percent, and Zillow estimates they will continue to increase 2.4 percent over the next year.
According to California Association of Realtors President Geoff McIntosh, inventory is also a major problem. “A lack of available homes for sale continues to be the largest single factor influencing California’s housing market,” said McIntosh. “With active listings 13.5 percent lower than last June, we’ve now experienced a full two years in which active listings have fallen on a year-over-year basis and the lowest inventory level this year. Would-be sellers aren’t listing their homes as many of them would also face an inventory challenge if they were to turn around and buy another property.”
Three bills have been presented in the California State Legislature, according to the Op Ed, that could help with the state’s housing troubles by aiding affordable housing initiatives: SB-35, planning and zoning, affordable housing, streamlined approval process; SB-2, Building Homes and Jobs Act; and SB-3, Veterans and Affordable Housing Bond Act of 2018.
SB-35 aims to streamline the process for approval for zoning requests. It would require the city or county to, “adopt a general plan for land use development within its boundaries that includes, among other things, a housing element.” The bill would also require an annual report to the legislative body. The bill has been amended five times in the assembly, with the most recent amendment having taken place on September 1.SB-2 would establish permanent sources of funding to be put toward affordable housing in the form of a $75 fee for the, “recording of every real estate instrument, paper, or notice required or permitted by law to be recorded, per each single transaction per single parcel of real property, not to exceed $225.” The revenue generated would be sent back to the state on a quarterly basis.
SB-3 would authorize bonds totaling $4 billion to assist in affordable housing for low- and very low-income households, of which $3 billion would finance “finance various existing housing programs, as well as infill infrastructure financing and affordable housing matching grant programs.”
If passed, California voters would vote on the bill on November 6, 2018. Pending an affirmative vote, the bill would go into immediate effect.