Californians who own a second home could lose the ability to deduct interest on that mortgage from their state taxes, according to a bill introduced last week in the California State Assembly, The Los Angeles Times reported.
The move would impact the roughly 31,000 Californians who got the tax break in 2015 at a cost to the state of $300 million. The bill, AB 71, calls for directing those funds to an existing program that finances affordable housing through tax credits.
- Previous attempts at wide-reaching legislation to combat the state’s affordable housing crisis have come up short. Recently, California Gov. Jerry Brown’s push for $400 million in housing subsidies failed, and a $3 billion affordable housing bond that has previously stalled is back on the docket for 2018, according to SFGate.
California is facing a major shortage of housing, particularly that which meets the needs of low- to middle-income residents in many metro areas.
State lawmakers are pursuing various initiatives in a bid to close the gap. A recent report by consulting firm McKinsey offered up a number of ideas on ways to add more than 5 million single-family and multifamily properties across the state.
There have been some successes, however. This past summer, voters in San Francisco gave the thumbs up to Proposition C, which requires residential developments with 25 units to offer 25% at below-market rates, up from the current requirement of 12%.
The crisis is reaching such proportions that large employers based in the state like Facebook are now exploring ways to help residents get a foothold on the property ladder. Earlier this month, the company set up the Catalyst Housing Fund with $18.5 million to produce and protect affordable housing.
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