Assembly Bill 1335 Building Homes and Jobs

Assembly Bill 1335
Building Homes and Jobs Act (2015)
Speaker Toni G. Atkins
THE ISSUE: California’s housing costs are the highest in the nation and increasing rapidly. We
have a severe supply crisis. Roughly speaking, the state would have to double the number of new
homes created each year just to stop costs from rising and putting homeownership out of reach
for increasingly higher-income Californians.
THE SOLUTION: The answer is
to increase supply to meet the strong
demand, but because the reasons for
the housing shortfall are many and
complex, solving them will take
time. AB 1335 would help by
creating a stable, permanent source
of funding for housing for lowerincome home seekers. It would do
this with a $75 fee on the recording
of real-estate documents, capped at $225 per parcel. Crucially, transactions associated with
commercial and residential real-estate sales would be exempted from the fee. The fee would
generate hundreds of millions of dollars for the construction of new homes. This money will help
leverage billions of dollars in federal, local and bank investments.
AB 1335 is part of a package of actions—some completed, some proposed—aimed at the housing
crisis.
Already, last year, $100 million from the state general fund was allocated to housing and voters
passed Prop. 41 to fund new homes for veterans. Moreover, in the current budget year, $65 million
from cap-and-trade revenue was targeted at new transit-oriented housing. On an ongoing basis, 10
percent of all cap-and-trade revenue will be dedicated for this purpose. Thanks to growing receipts,
a larger expenditure on housing is expected in the next fiscal year.
Additionally, Assembly members are proposing to increase to $300 million the amount of money
the state can allocate to its Low Income Housing Tax Credit program (AB 35), use revenues from
the new Safe Neighborhoods and Schools Fund for the rapid rehousing of formerly incarcerated
individuals (AB 1056) and help California access federal low-income-housing dollars (AB 90).
These actions demonstrate a commitment to spread the responsibility among all Californians to
help solve the problem. Taken together, they comprise a first step in a larger effort to address the
overall housing-supply dilemma.
FOR MORE INFORMATION: Zack Olmstead, (916) 319-2078 or Zachary.Olmstead@asm.ca.gov
DISCUSSION: AB 1335 is the only part of the housing
package that directly increases the opportunity for
homeownership: Homeownership assistance, such as help
with down payments, is explicitly included as an allowable
use of the funding. A spending plan will be developed with
the help of housing-industry stakeholders. Under the bill’s
language, the plan will be targeted at providing new
housing opportunities for working Californians earning up
to 120 percent of area median income.
More broadly, these new rental and owned homes will
have a domino effect, relieving the pressure on the higher
levels of the housing market. Removing lower-income
workers from the demand pool will help keep costs down
for other first-time buyers, allowing more Californians to
pursue the dream of homeownership.
Branching out further still, AB 1335 will help boost the
economy, providing 29,000 new jobs for every $500
million spent on housing—good jobs that will help people
buy homes. Increased housing supply will also help
California attract and retain businesses, for which the cost
of workforce housing is a major issue.
That’s why organizations such as the California Building
Industry Association, Silicon Valley Leadership Group, the
Bay Area Council, the Los Angeles Business Council, the
Orange County Business Council and the San Diego
Regional Chamber of Commerce support AB 1335: They
understand that funding affordable housing is good for the
economy, and a stronger economy creates more
homebuyers.
New housing will reduce homelessness and its many
broader societal costs, and it will reduce the problem of
housing crowdedness, which contributes to a list of
negative impacts, including poor educational performance
among children living in overcrowded homes. A healthier,
better-educated populace, too, produces more
homebuyers.
All of this, for the low cost of a document-recording fee
that, again, does not include commercial or residential realestate sales and is only a piece of a comprehensive, shared
approach that taps a diverse pool of funding sources.
DIFFERENCES FROM SB
391:
 Additional language in
findings and declarations
requested by CA
Association of Realtors that
references investments
made in affordable housing
in 2014, demonstrating a
multi-source approach.
 A cap on the fee of $225
on a per parcel, per
transaction basis.
 A clearer, more expansive
list of eligible uses that
includes a reference to
down-payment assistance
being eligible, something
that was not in SB 391.
 Language to say that the
funding plan should include
targets of the total number
of affordable homes
created and preserved with
the funds.
 Inclusion of the creation of
an advisory body of experts
and stakeholders to help
develop the Building
Homes and Jobs
Investment Strategy,
including, but not limited
to, representatives from the
banking and financial
sector, real estate sector,
real estate and housing
developers and homeless
service providers.
 Inclusion of language to
“protect” the funds that
says if the fees are to be
used for a purpose not
authorized by the bill, then
they cannot be collected.