On September 29, 2017 California Governor Jerry Brown finalized the state’s most robust package of housing reform in recent history. The 15 bills signed into law included a new fee on real estate transactions and a $4-billion bond on the 2018 ballot. Lawmakers hope the two measures alone will raise close to $1 billion per year in the near term to construct more affordable housing across the state. — Neil Shekhter, founder of NMS Properties, a Los Angeles and Santa Monica based real estate firm, discusses the potential immediate and long-term effects of the new pieces of housing legislation.
“Today California begins a pivot from a housing-last policy to a housing-first policy,” Senator Scott Wiener (San Francisco), who wrote one of the key measures, said shortly after the Governor penned his signature. The state has been experiencing an increasing housing issue for several years now - - developers need to build 180,000 homes each year beyond what is already planned in order to keep pace with California’s population growth. Funds from the bond, pending its approval by voters in November 2018, and the new real estate fee are estimated to finance an additional 14,000 units, meaning there is still much work to be done. Neil Shekhter explained that this year’s package is only the start of what lawmakers plan to accomplish, noting that Assemblyman Richard Bloom (Santa Monica), who authored multiple bills, told reporters, “We will keep working this issue for as long as we need to.”
Most of the funds raised by the new legislation would go toward helping pay for the development of new homes for low-income residents, defined as people earning 60 percent or less of the median income in a given community. In Los Angeles, that means a family of four having a combined intake lower than $54,060 per year. Other measures will go toward new construction to benefit the homeless and farmworkers, with a small percentage of funds reserved to help pay for middle class housing. The state senate would also like to make it as easier and more affordable for developers to build. As a result, many burdensome regulations, including some local governments’ lengthy approval processes, are being whittled down in the new rules. Shekhter explained that both of the major bills also include marked efforts to subsidize homebuilding -- half of what is raised under the real estate transaction fee in the first year will go to cities and counties to update neighborhood development blueprints and other planning documents, and $1 billion of the bond will be allocated to home loans for veterans.
Neil Shekhter is the CEO of NMS Properties, a privately owned real estate management firm that specializes in multi-family and mixed-use properties in the Greater Los Angeles Area and in Santa Monica. Founded by Shekhter in 1988, NMS currently manages more than 70 properties.
Neil Shekhter - Founder and CEO of NMS Properties: http://www.neilshekhternews.com
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