Housing and real estate related initiatives and plans are dominating the state and national conversation around affordability, availability and plans for the future. Below is the outcome of the California and national elections are as it pertains to housing and real estate.
Results of California Housing Initiatives
Of the three California real estate related propositions only one passed. Good news is that residents over 55 and residents who lost their homes to wildfires will be able to get a property tax incentive.
We hope in the long run, this change provides more inventory in the East Bay housing market as homeowners who have stayed in their homes for years due to their favorable tax base, can now move anywhere in California and take their tax base with them.
The outcome of the 2020 election on all three of the real estate related propositions.
Proposition 15 – Change Tax Assessment For Commercial Property – Failed
The ballot measure to partially dismantle California’s longtime system of tying property taxes to the last sales price failed to pass. The measure would have reassessed commercial and industrial properties every three years. Residential property would have remained under current rules.
Proposition 19 -Tax Assessment Tranfers -Passed
Proposition 19 will give Californians 55 or older a big property tax break when buying a new home. To fund the new tax break, the measure would curtail a separate tax break Californians may receive on homes inherited from parents and grandparents. Only inherited properties used as primary homes or farms would be eligible for property tax savings. The Proposition also allows homeowners who lose their homes in a wildfire or natural disaster to transfer their property tax base to a replacement home anywhere in the state. That’s important because in California, homeowners pay their property tax based on the value of a home when they buy it, therefore, buying a new home could cause a family’s property tax bill to skyrocket.The Proposition also establishes a fire protection services fund.
Proposition 21- Expand Local Government Authority To Enact Rent Control on Residential Property – Failed
The initiative would have modified the 25-year-old law to allow cities to control rents on apartments built after 1995, or earlier in cities that had rent control laws before Costa-Hawkins passed. The initiative would have allowed cities to limit rent hikes when eligible apartments became vacant. Opponents argued against Proposition 21 contending that rent control would slow homebuilding and hurt the investments of small landlords.
National Election Outcome- Biden’s Plan For Housing
The Biden campaign’s housing proposal pinpointed the issue of lack of housing supply as the driving force behind the affordability crisis. In response, Biden has pledged to invest $640 billion in housing over the next 10 years. Among other things, the plan would provide “financial assistance to help hard-working Americans buy or rent safe, quality housing.”
The plan also calls for increasing supply via “investments in resilience, energy efficiency, and accessibility of homes.” Moreover, it promises more construction and the refurbishment of affordable housing units through the establishment of a $100 billion Affordable Housing Fund, which will include a $20 billion investment in the federal government’s Housing Trust Fund, among other investments.
Rentals and Evictions
Biden’s plan for rentals and renters calls for local “eviction diversion programs” that will include mediation, payment plans and financial literacy education programs. He also wants to pass legislation put forward by Majority Whip James E. Clyburn and Senator Michael Bennet that would help tenants facing eviction get legal assistance.
In an earlier version of his plan to beat COVID-19, Biden also stated that “no one should face foreclosure or eviction because they are affected by the COVID-19 crisis,” calling for mortgage and rental relief for people impacted by the outbreak.
Biden has said that if elected he will roll back Trump’s tax cuts, presumably including deduction rules for things like mortgage interest and local and state taxes. His plan also specifically states that his overall $640 billion investment in housing will be “paid for by raising taxes on corporations and large financial institutions.”
Berkeley Hills Realty is an active proponent in housing issues, as we believe that homes create the backbone of our community.