The housing package passed by California lawmakers is the biggest thing they've done in years. But it won't lower your rent
“Three California measures have passed, Senate Bills 2, Senate Bill 3, and Senate Bill 35, comprise the key parts of the housing deal. Under SB 2, those refinancing their homes or filing other real estate documents — aside from home and commercial property sales — will pay a fee of $75 with a maximum of $225 paid per transaction. The measure is expected to raise about $250 million a year to finance the construction of affordable housing.
What are your thought of this? Read this article below!
California lawmakers sped to the close of the legislative session on Friday, addressing one of their signature issues with a sweeping package of bills aiming to address the state’s crippling housing costs.
The bills expect to raise billions in funding to help finance the construction thousands of new homes for the state’s low-income residents. They also attempt to ease local regulations on home building — a necessary move, lawmakers said, to help middle-class Californians who are now overwhelmed by costs.
“I’ve read study after study after study outlining this crisis,” said Assemblyman Richard Bloom (D-Santa Monica), one of the leading legislators on housing issues. “We’re here to do something about it.”
Three measures, Senate Bills 2, 3 and 35, comprise the key parts of the housing deal. Under SB 2, those refinancing their homes or filing other real estate documents — aside from home and commercial property sales — will pay a starting fee of $75 with a maximum of $225 paid per transaction. The measure is expected to raise about $250 million a year to finance the construction of affordable housing.
SB 3 places a bond measure on the November 2018 statewide ballot with $3 billion set aside to also finance low-income development, and an additional $1 billion for veterans home loans. SB 35 would require cities and counties to limit environmental, planning and other reviews on land already zoned for a developer’s proposed amount of housing.
Gov. Jerry Brown is expected to sign the three bills.
“This comprehensive approach does what’s long been needed in California — build new homes and improve access to housing,” Brown said in a joint statement over the summer with Assembly Speaker Anthony Rendon and Senate President Pro Tem Kevin de León.
Housing was one of many major issues lawmakers addressed before adjourning for the year, including legislation that would make California a so-called sanctuary state for immigrants here illegally and a bill to move up the 2018 presidential primary to the spring.
Growing housing costs have touched every part of California. The state’s median home value of $505,800 is more than 2½ times the national average, and nearly 2 million residents pay more than half their income on rent.
Just this week, the U.S. Census bureau revealed that one in five Californians is living in poverty — the nation’s highest rate — once accounting for housing and other costs of living.
“The poverty rate in California, everyone talks about it,” said state Sen. Toni Atkins (D-San Diego), author of SB 2. “Look at everything we do. For child care, for education, for minimum wage, for health care. All those things are significant. And because of housing costs, it negates all those good things.”
This year’s decision represents lawmakers’ largest attempt to address the problem in recent memory. In 2011, at the height of the state’s budget crisis, legislators ended an urban renewal program that contributed billions of dollars to finance low-income housing. Ever since, lawmakers introduced a version of SB 2 every year to no avail. Last year, other major housing legislation crumbled after Brown and lawmakers couldn’t agree to a final deal.
Even though lawmakers hailed Friday’s votes as historic, the bills won’t put much of a dent in California’s affordability problems. The state will remain billions of dollars short annually of the money needed to finance new homes for the neediest Californians, according to state and third-party estimates of the legislation. Similarly, tens of thousands of additional new homes will be needed each year simply to keep pace with population growth.
Opponents of the legislation noted that the state’s problems are so large that it would be prohibitively expensive to address them with new taxpayer spending.
“The numbers prove that this is simply not the case,” Assemblyman Jay Obernolte (R-Big Bear Lake) said during debate on SB 2 Thursday evening.
Despite the bills’ limited effects, the votes were far from assured. Rendon held the roll call vote on SB 2 open for nearly an hour Thursday evening as the measure was two votes short of a two-thirds supermajority threshold needed for passage. SB 2 passed after Rendon held beer-fueled lobbying efforts off the floor of the Assembly with two Democrats who were holding out, and thanks to a Republican assemblyman who unexpectedly voted in favor.
The lawmaker, Brian Maienschein of San Diego, said his decision was motivated by an outbreak of hepatitis A in his city, which has killed 16 homeless residents in recent months. Maienschein, who worked on homelessness issues at the United Way in San Diego prior to his election, said he didn’t like forcing homeowners to pay more, but the problem had reached emergency levels.
“This is a public health crisis,” Maienschein said. “Our economy is at risk. And everyone in San Diego’s quality of life is affected by this.”
Republican lawmakers also raised sharp objections to SB 3, the housing bond. GOP legislators who are military veterans argued that legislative leaders included $1 billion for veterans’ home loans only to engender sympathy from voters at the ballot box.
“We have taken the image of a veteran and wrapped this other item in the flag,” Assemblyman Rocky Chavez (R-Oceanside) said during debate Thursday night. “Ladies and gentlemen, as a veteran I find that offensive.”
Atkins attributed part of the difficulty in securing the votes for a housing package to fatigue among Democrats, who voted earlier this year to increase the gas tax and extend cap and trade, the state’s primary program to combat climate change. Like SB 2, both those measures required two-thirds supermajorities, and Democrats vulnerable to reelection battles next year were wary of a third such decision.
The lone Democrat who voted against SB 2, Sabrina Cervantes of Riverside, called the bill“a regressive tax that disproportionately affects the middle class.”
“It took a lot of effort,” Atkins said. “But it was time.”
NATIONAL FLOOD INSURANCE PROGRAM SET TO EXPIRE
The current authorization for the National Flood Insurance Program is set to expire at the end of September 2017. Both the National Association of REALTORS® and the California Association of REALTORS® are working with Congress to pass a long-term extension. So far, the House Financial Services Committee has passed a package of bills that would extend the NFIP and make reforms to financially strengthen it. N.A.R. is working with members of Congress to improve those bills.
If Congress does not pass a long-term extension to the program, C.A.R. and N.A.R. are hopeful Congress will pass a short-term extension that allows them to continue to work on a larger reform package that includes a long-term extension.
Lets hope they get this figured out quickly!
Securing your online accounts is vitally important. The consequences of being hacked can be great — someone could lock you out of your email account. If that account is used for password recovery for your other accounts, then a hacker could get access to all of those as well. There are a few basic things that you should make sure you do to protect your email account:
1. Provide a secondary email address for recovery.
2. Provide a phone number for password recovery.
3. Turn on 2 Factor Authentication.
Turning on 2 Factor Authentication is the most important thing to do. Even if someone does guess your password, they will still need the six digit code from Google authenticator on your phone or tablet, and that will stop hackers cold.
If you do end up getting hacked, the first thing to do is create a new email address. Then sign into all of your other online accounts and change the password recovery email address to the one you just created. You should also contact the company's support and have them verify your identity in another way. While recovery questions are rather insecure themselves, if you did set them up, they could help prove your identify as well.
Facebook recently has implemented a new security measure where you can designate three trusted contacts for password recovery. If you forget your password, Facebook will send each friend a code, and you'll need to get all three codes to get back into your account. I recommends reading these three articles on what can happen when your accounts are hacked:
Kevin Roos: I dared two expert hackers to destroy my life. Here's what happened.
Mat Honan: How I Resurrected My Digital Life After an Epic Hacking
What we give away when we log on to a public Wi-Fi network
The REALTOR® Party is a powerful alliance of REALTORS® and REALTOR® Associations working to protect and promote homeownership and property interests. The REALTOR® Party speaks with one voice to advance public policies and candidates that build strong communities and promote a vibrant business environment.
Why Inventory Is the Lowest It’s Been in 20 Years
By Suzanne De Vita
Housing demand continues to outstrip supply, with shortages now at their worst in 20 years. Why?
The answer is simple: Homeowners are happy where they are, according to a new survey by realtor.com®. Sixty-three percent of homeowners surveyed say their current house meets their needs, with baby boomer homeowners especially unwilling to move—a problem for succeeding generations, who are missing out on the 33 million condos and single-family houses boomers currently own. An overwhelming 85 percent of boomers surveyed have no plans to list their home for sale in the next year, with 72 percent reporting that their existing house suits their needs. Sixty-five percent of Gen X homeowners and 52 percent of millennial homeowners echoed the same sentiment.
Homeowners overall also see no need to uproot, the survey shows. Sixteen percent are not moving up due to their low mortgage interest rate (and 13 percent due to their low property taxes), 15 percent are remaining in place because they recently bought their home (a reason reported by 27 percent of millennial homeowners), and another 13 percent are staying put to make upgrades.
“Life events drive real estate transactions,” says Danielle Hale, chief economist for realtor.com. “When the majority of homeowners feel their family needs are being met by their current home, there is nothing compelling them to put their home on the market.”
Many are hesitant to sell, as well, because they know how high-priced and scarce homes are.
“Boomers indeed hold the key to those homes the market desperately needs, both in the urban condo and the detached suburban home segment,” Hale says. “But with a strong economy and rising home prices, there’s really no reason for established homeowners to sell in the short term. Although downsizing might be on the minds of boomers, they face the same inventory shortages and price increases plaguing millennials.”
Fifty-nine percent of millennial homeowners surveyed have no plans to list their home for sale in the next year, but 35 percent do—and, of those, 60 percent are looking to trade up. If their plans pan out, the housing market could gain a boost in entry-level stock.
“The housing shortage forced many first-time homebuyers to consider smaller homes and condos as a way to literally get their foot in the door,” says Hale. “Our survey data reveals that we may see more of these homes hitting the market in the next year, but whether these owners actually list will depend on whether they can find another home.”
More than 60 percent of the real estate brokers in RISMedia’s 2017 Power Broker Survey reported limited inventory as their most challenging issue.
Are you feeling the urge to tackle home maintenance this season? While you're probably up on the basics of spring-cleaning, like washing windows, cleaning blinds and shampooing rugs, there are several areas you may overlook.
Looking to buy or sell your home give me a call and I can help.
Take advantage of the first-time homebuyer tax credit for 2016 this tax season.
The tax landscape changes yearly. Congress meets occasionally to review and adjust the tax code, so first-time homebuyers must stay on their toes to understand year-to-year tax changes.
The government provides tax breaks for existing and new homeowners to incentivize buying homes. Homeownership offers multiple home tax deductions, tax credits and other breaks that aren't available to those who rent. If you bought your first home in 2016 — or you're hoping to buy one in 2017 — it can pay to familiarize yourself with first-time homebuyer tax credits so you can take advantage of tax breaks that lower your tax bill.
iStock.com / kroachHome Mortgage Interest DeductionThe mortgage interest deduction is one of the biggest home tax breaks and is a crucial new homeowner tax credit. It covers interest paid on loans of up to $1 million, or $500,000 if you're married but filing a separate return.
The deduction can be especially beneficial for borrowers with new loans because interest charges on mortgages are typically steeper in the early years of the mortgage's term.
"The way loan amortization works, your first payments have the highest ratio of interest to principal," said Andrew Christakos, an accredited investment fiduciary with Westfield Wealth Management in Westfield, N.J.
You must itemize on Schedule A of your tax return to claim the home mortgage interest deduction. To do so, add up all deductible expenses for the year, including those related to homeownership as well as other categories. Claiming the mortgage interest deduction can save you tax dollars if your itemized deductions are greater than your standard deduction.
Don't miss this new homebuyer tax credit. Your loan provider should send you Form 1098 shortly after the tax year ends. It will show the amount of interest you paid the previous year.
iStock.com / HailshadowMortgage Interest CreditThe federal government's mortgage interest credit provides another opportunity for first-time homebuyers to claim a tax break for the mortgage interest they paid. Unlike the mortgage interest deduction — which reduces your taxable income — this mortgage interest credit directly counts against your tax bill, lowering what you owe.
"It's a little-known but very cool program," said Deb Tomaro, a Bloomington, Ind.-based broker with RE/MAX Acclaimed Properties. "Depending on the purchase price of your home, a buyer can get 20 to 30 percent of the interest they pay every year back as a straight tax credit."
For example, imagine you prepare a return and find that you owe the IRS $1,000 in taxes. However, completing IRS Form 8396 for the mortgage interest credit shows that you're eligible for a $1,000 credit. In that situation, you can apply the credit and not owe the IRS anything.
The credit is not refundable, so you won't receive a check if the credit is larger than what you owe in taxes.
To be eligible for this strategic tax break, a state or local government must have issued you a Mortgage Credit Certificate. Typically, this certificate is issued at the time you originate the mortgage. The certificate tells you how much interest you can claim as a credit. If you also claim a mortgage interest deduction when you file your taxes, you must reduce the credit by that amount — no double-dipping is allowed.
Before You File: Tax Breaks for 2017
weRpix / Shutterstock.comMortgage Points DeductionYou can also deduct what you pay in points to obtain the mortgage loan in the first place. Mortgage points are prepaid interest that can help a borrower qualify for a lower interest rate over the life of the loan. And, they can qualify for a tax deduction as well.
"Most homeowners overlook the deduction of points they pay to secure a mortgage loan," said Yvette Best, controller and senior tax accountant at Best Services Unlimited, a tax preparation company based in Fayetteville, Ga. "Buying points to lower the interest rate on your mortgage loan is one of the best tax breaks available right now. The return on investment is twofold because you get to deduct the cost of the points and the amount on interest paid in the same year as the home purchase."
You must itemize on your return to claim this deduction, and your settlement disclosure statement must specifically cite these fees as "points." Your home loan must be for $1 million or less, just as with the mortgage interest deduction.
iStock.com / jygalleryTax-Free IRA WithdrawalsSaving money for a down payment and closing costs is a major consideration for most people when they're getting ready to buy a home. The IRS says you can pull funds from your IRA to help.
"First-time homebuyers who break into their IRAs to come up with the down payment do not have to pay the 10 percent penalty normally applied to withdrawals taken before age 59½," said Lisa Greene-Lewis, a certified public accountant and blog editor at TurboTax. "This incentive applies to current homeowners as well because you're eligible for first-time buyer status if you haven't owned a home in two years."
You can take up to $10,000 from your IRA without penalty to buy a home, although you'll still need to pay taxes on the money. Your 401k plan does not qualify for the exception to the 10 percent penalty.
designer491 / Shutterstock.comProperty Tax DeductionProperty taxes are one of the many lucrative tax breaks for first-time homebuyers. Taxpayers who itemize deductions on Schedule A are also eligible to deduct real estate taxes paid on a primary residence, said Laurie Samay, a New York-based certified financial planner with Palisades Hudson Financial Group.
You can deduct property taxes paid during the year for which you're filing. If you purchase a home midway through the tax year, you can claim all taxes paid from the date of sale onward.
Don't Miss: 10 Little-Known Tax Deductions
Patryk Kosmider / Shutterstock.comHome Improvement Tax BreaksImprovements you make to a home can qualify for a tax break. If you use a home equity loan or other loan secured by your home to finance improvements, the loan will qualify for the same mortgage interest deductions as your main mortgage.
Keeping track of capital improvements to the home also can help you out when you sell the home. If your home sells for more than you paid for it -- your tax or cost basis — that extra money can be considered taxable income at capital gains rates subject to certain thresholds and rules. But home improvements can lower your taxes by increasing your tax basis.
"You can include the cost of improvements made to the property in the cost basis of the property when you're determining any capital gains on the sale," Christakos said. "Make sure you keep your receipts for major improvements so you can prove the costs you claim."
Elena Elisseeva / Shutterstock.comHome Energy Tax CreditsNow for the bad news: Two property-related home improvement tax credits have been eliminated as of Jan. 1, 2017. That means both credits will no longer apply beginning with the 2017 tax year.
"The 30 percent Residential Energy Property Tax Credit applies to the cost of installing these products, including labor and installation, but must be taken in the year the item was placed in service," said Jayson Mullin, founder of Top Tax Defenders in Houston.
Keep all receipts and contracts from the installation, and file for this credit using Form 5695. This benefit is for existing homeowners and can also be claimed as a first-time homebuyer credit.
In 2015 they parted ways with with Listhub which was their contracted provider of all the data on available listings. Have you noticed that over the past 2 years Zillow simple didn't have all the available listings and their data is frequently incorrect?
Now, Zillow is trying to force participation with their website from all the multiple listing services and directly with brokerages like our RE/MAX offices.
Quite honestly, Zillow does not feature every listing on the MLS and rarely are their "zestimates" correct.
(please go to bottom of zillow website, click on zestimates, scroll down. It shows they are off on their zestimates by 5, 10, and even 20-30% on the values of homes- yikes!)
Although Zillow can be a fun tool to play with for many buyers and sellers, REALTORs are consistently having to correct the errors of the poor information they provide to our clients.
Please understand that Zillow is an information gathering tool and NOT a multiple listing service. Keep in mind their data is often incorrect and rely on your real estate professional to keep you up-to-date with the most current listings on the market.
Please consult with your local expert here.
Thank you JD Moshier
Fall Maintenance Tips:
In case of an emergency, all the adults in your household should know where the following controls are located and how to turn them off: