S. E. Williams
California is in the grip of a mounting affordable housing crisis despite efforts up and down the state to break through barriers in order to build more reasonably priced housing units.
Renters up and down the state are being priced out of the market. Seniors, middle-class families and the working poor are feeling the pains associated with a severe shortage of affordable homes and apartments in the state as housing values have climbed to levels not seen since before the Great Recession.
Some may be shocked to learn the median cost of housing in the state has exceeded $500,000—more than twice the national average. So, it is not surprising that California has the third-lowest home ownership rate and the fourth highest rents in the nation.
The high cost of rent directly impacts one’s ability to save enough for a down-payment to purchase a home and has left renters in an impossible and untenable situation. In other words, as housing supplies continue to shrink, housing prices continue to rise, rental rates continue to increase leaving renters unable to save for a down payment to purchase a home and the cycle continues.
Sadly, nearly a third of California renters spend more than 50 percent of their income on rent—research shows that when one’s rent exceeds more than 30 percent of their income it becomes a financial burden.
California Board of Equalization Member Jerome E. Horton and State Assemblyman Miguel Santiago. Their efforts have resulted in the introduction of legislation (AB2833) to increase the nonrefundable renter’s credit to the greater of $60 allowed under current law or 10 percent of the median rent in the county where the property is occupied for individuals and $120 under current law, or 20 percent of the median rent in the county where the property is occupied for joint filers, heads of households, and surviving spouses.
As renters are required to spend more on housing they have less to spend on other necessities further impacting the local economy.
“The cost of renting an apartment or home in California is as high as it’s ever been. In fact, many millennials are moving from California because the dream of affordable housing seems so unlikely. It’s necessary we do something to lower the cost of renting one’s residence in this state,” Horton said.
The average rent in California has increased 60 percent over the past 20 years. The flat “renter’s credit” amount has not been adjusted since it was enacted in 1972.
In commenting on the importance of AB2833 Santiago said, “With the rising cost of rental housing in California, the expansion of the renter’s credit can increase access to housing for low-income families.”
In February, the Orange County Register reported that renters now out-number homeowners in San Bernardino County and in several other regions in the state as well. Renters and others are encouraged to call the Assembly Standing Committee on Appropriations at (916) 651-4101 and express their support for AB 2833 (Santiago) to increase the renter’s credit.