SHORTAGE DRIVES UP HOUSING COSTS EVEN AS SALES PLUMMET

Contact: Scott Macdonald

Office of Senator Denise Ducheny

(310) 996-2671

FOR IMMEDIATE RELEASE

June 27, 2007

SHORTAGE DRIVES UP HOUSING COSTS EVEN AS SALES PLUMMET

            SACRAMENTO – Supporters of the Housing Affordability Act today said the legislation is desperately needed in a state with such a shortage of supply that housing costs continued to climb despite a drastic fall off in sales.

            SB 303 (Ducheny) aims to bring more certainty to California’s housing planning process which will make more homes and rental units available at a lower cost.

            Usually a sales slump leads to a cut in prices.  But the California Association of Realtors reports that in May, despite a 25 percent drop off in sales from a year earlier, the median price of a home in the state actually rose by 4.8 percent to $591,180.

            “It is a sad indicator of just how out of balance the housing market is when a dramatic drop in sales can’t keep prices from rising,” said Jeff Loustau, Executive Director of the California Housing Consortium.  “SB 303 addresses a very discrete element of the state’s broken housing delivery system by calling on local government to zone for their housing needs over a five-year timeframe.

            “The Housing Affordability Act will help ensure more rental and homeownership opportunities for firefighters, teachers and other critical members of the state workforce.”

            SB 303 will require all cities to identify the land to be used to meet the housing needs of the next ten years and they will be required to zone the land that is part of the five year Housing Element of the General Plan.

            This commitment will allow better planning for construction, more efficient and thorough environmental review and a reduction in costly delays.

            The measure will also create a state revolving loan fund to advance money to cities and counties to pay for increased planning and environmental activities required by SB 303.  Local governments would repay the loans through imposition of building permit fees.

            The Housing Affordability Act has passed the Senate and will next be heard in the Assembly Local Government Committee on Tuesday at 9 a.m.

            The Silicon Valley Leadership Group and the Central California Hispanic Chamber of Commerce are the two newest among more than 70 diverse organizations around the state that have endorsed SB 303.

            Supporters include the California Housing Consortium, California Chamber of Commerce, California Firefighters Association, Major Builders Council, California Federation of Teachers, California Black Chamber Foundation, Consulting Engineers and Land Surveyors of California (CELSOC), California Council of Churches IMPACT, Bay Area Council, California Hispanic Chamber of Commerce, Ass’n of Federal, State, City and Municipal Employees (AFSCME), Father Joe’s Villages and the Peace Officers Research Ass’n of California (PORAC).