A proposal by three California Democratic lawmakers would create government subsidies in the housing market that would lead to hyper-inflation in housing prices. Proposal fails to address root causes of California’s housing crisis: lack of supply and government-imposed mandates, fees, and regulations.
Looking for affordable housing in California? You’ll be hard-pressed to find it and costs are only increasing.
California Democrats are proposing to introduce socialism into the housing market by creating massive taxpayer-funded subsidies. Like easy money given out through college loans that resulted in the cost of tuition spiking at schools across the country, critics say the proposal would lead to rampant housing cost spikes.
On February 25th, California Democrats unveiled a bill titled the “Housing for All Act of 2022,” aimed at funding affordable housing. The bill, sponsored by U.S. Senator Alex Padilla, Rep. Ted Lieu, and Rep. Salud Carbajal, would force taxpayers to borrow $532 billion to fund government housing subsidies over the next 10 years.
Carl DeMaio, chairman of Reform California, says that not a single penny of the Housing for All proposal deals with the root causes of the high price of housing in California. The two biggest drivers we must address are 1) lack of supply and 2) costly government mandates, regulations and fees on housing.
“These woke liberal politicians are throwing more and more money at the issue while hoping you don’t notice that they’re strangling the free market with overbearing mandates, regulations, fees, and processing times,” explained DeMaio. “The problem is entirely self-imposed by California Democrats and special-interests,” he continued.
In the past ten years, California has failed to keep pace with housing demand – with supply falling short every single year of demand. California needs to build more housing units – and currently faces a deficit of nearly 3-4 million housing units!
Even if a builder opts to try to build more housing, government makes it hard.
A recent study from John Burns Real Estate Consulting also shows even excluding land costs that it cost $500,000 more to build the same home in California ($800,000) versus Texas ($300,000) – all due to government mandates and fees.
According to housing expert Dean Wehrli, it can take over 10 years to obtain approval for building a housing community. The costs of these waiting periods are reflected in housing prices at as much as 23.4 percent of the total price. In addition to the wait, homebuilders are required to pay $25,000 to $75,000 in fees for building a single home in several areas of the state.
“These fees are all passed off onto homebuyers, and who do you think puts these waiting periods and fees in place?” asked DeMaio. “The liberal tax-and-spend politicians in Sacramento and your local government.”
DeMaio says the other element of high prices is fees and regulations for climate change and green energy policies.
For example, the California Energy Commission enacted building code Title 24 in 2020 to reduce greenhouse gas emissions. The code requires the use of solar for all new residential buildings three stories or less. The costs of compliance are passed onto home prices. Local governments have imposed new stormwater fees and even a Mileage Tax for housing projects based on the number of expected miles that would be driven by residents in a particular housing project.
A study by the Fermanian Business and Economic Institute at Point Loma Nazarene University shows that government regulation may explain, on average, 40 percent of housing costs. In San Diego, that figure jumps to 55.9 percent or $480,746 of the cost of a new $860,000 apartment or condo.
The impacts of high housing costs on working families in California have been devastating, says DeMaio.
The median California home, at $796,570, costs more than seven times what the average household earns. In Orange County, only 20 percent of residents would be able to purchase a median-priced single-family home. Nine out of ten Californians say these costs are a problem according to the Public Policy Institute of California. Even worse, nearly one in three Californians are considering fleeing to a more affordable state like Texas.
DeMaio and Reform California argue that the solution to the housing crisis isn’t to throw money down the drain as is being proposed in the Housing for All boondoggle bill, but to immediately expand housing supply and cut costly regulations and unnecessary mandates.
DeMaio says that process will begin by electing reform-minded candidates in the 2022 election who will work to restore the voice of Californians — not liberal special-interests — in our state government.That’s why DeMaio is urging all Californians to join the campaign today to flip key seats in the 2022 election and make California more affordable.
“We can cut the red tape and make housing as affordable as Texas — we just need candidates willing to do it,” says DeMaio. “That’s why we need your help today to recruit and elect these candidates in 2022,” he concluded.
Join the Fight: Flip Target Seats to Combat Rising Housing Costs
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