Affordability continues to haunt homeowners and renters nationwide, especially Californians navigating one of the nation’s most unaffordable markets.
As Californians struggle to afford their homes, state legislators are scrambling to make the American Dream accessible for their constituents.
A recently introduced proposition may offer Californian renters some peace of mind, according to an article from NPR.
The proposition, Prop. 10, is billed as a local rent control initiative and it could potentially repeal the Costa Hawkins Act.
The Costa Hawkins Act prohibits rent control on the majority of housing built after the 1970s, preventing local cities from expanding rent control. It also allows for units to transition to free-market rates once rent-controlled tenants move, according to the article.
Although Prop. 10 will be presented to Californian voters this November, some claim the proposition distracts from the real issue: inventory.
From the article:
But Prop 10 has its detractors, including people who build low-income rental housing. Elizabeth Bluhm is a project manager at a San Diego-based nonprofit developer called Wakefield Housing.
She's worried that if Prop 10 passes, there could be a patchwork of cities with different rent control laws and limits, making "it very hard for developers to get things done efficiently," she says. "It just adds to the cost of development."
Bluhm says even just a little uncertainty threatens funding for a project because developers need to know how much rent they're going to bring in to cover their costs and ensure they don't go underwater. Private development firms like hers, she says, are on the front line of fixing the housing crisis because federal housing subsidies for the poor have steadily declined since the 1980s.
According to the article, the California Department of Housing and Community Development estimates there needs to be an increase of 1.8 million more units by 2025. Unfortunately, the rising cost of labor and materials is a major hindrance to development and new construction.
In August, the National Association of Homebuilders revealed that concerns about market affordability contributed to homebuilder confidence falling to its lowest level in 2018, according to the NAHB/Wells Fargo Housing Market Index.
Affordability seems to be negatively affecting the housing industry as a whole and although there might not be an immediate solution but come November, Californians will have the opportunity to bring its state some relief.
