Calif. Senate Passes Fee To Fund New Affordable Housing

California has the most expensive real estate markets in the U.S., while state funds for affordable housing have largely dried up.

A proposal to create a new funding source passed the state Senate on Thursday.

The measure would add a $75 fee to most real estate documents--except when they involve purchase or sale of property--capped at $225. Developers building new units, banks foreclosing, and people refinancing their homes would be prime targets.

The bill’s author, Democratic Senator Toni Atkins, says the fee could draw in almost a billion dollars in new funding a year.

"This is a subsidy to help provide housing which then people will be able to remain in California—our kids, our grandkids, the people who work in our fields, the people who work in grocery stores," Atkins said before the vote.
 
Republican Senator John Moorlach criticized Democrats for seeking more revenue.

"It just seems that Sacramento can’t manage its money," Moorlach said. "When it has a project that’s underfunded, it just raises a tax."

Gov. Jerry Brown has been reluctant to subsidize housing. The state Legislative Analyst's Office primarily attributes high home prices to a lack of new units. Brown has favored addressing this by expediting approvals for new development. A deal with Democratic lawmakers to do that in exchange for funding affordable housing fell through last year.

The new fee passed by the required two-thirds majority, and now moves to the Assembly.