California is experiencing a housing crisis of sorts. However, State Senator Scott Wiener has introduced Senate Bill 35 (SB35) that may prove to be the solution that has been needed for about three decades. The bill has already passed the state senate and is now working its way through the house with negotiations with Governor Jerry Brow. Nick Vertucci, a very successful real estate investor and advisor, is watching this process unfold with great interest. It could be quite a boon to the real estate market and to many people who currently can’t afford housing!
What Is the Problem? There’s Good News and Bad News
The good news is the California economy is booming and unemployment is way down. However, the bad news is that many workers have to live more than two hours away from their work because they simply cannot find affordable housing closer to work. Furthermore, even though California has some of the highest wages in the county, it also has one of the highest “adjusted poverty rates” because the cost of living, particularly housing, is so high. To make matters worse, some communities have actively promoted the building of lucrative business parks while at the same time actively discouraging the building of houses, condos, and apartment buildings for the workers these businesses attract!
It’s even more complicated than that. While the national average price for a house is about $250,000, the average price in California is about $500,000. Moreover, a tax cap passed in 1978 discourages anyone from selling their home because they’d have to pay much higher taxes if they did. As a result, first time home buyers, even middle income wage earners, are simply locked out of the housing market. Low income people cannot even entertain the notion of buying a house. In fact, many of them can’t even afford a small apartment and end up living out of a motor home or van or worse.
So What Is the Underlying Cause For This Housing Crisis?
California has always been a draw to new residents because of its fabulous weather, especially near its beautiful coastline. It has forested coastal mountains basically cascading down the landscape toward the breathtaking blue Pacific Ocean! This alone drove housing prices up because so many people who visited California wanted to move to the state. California also attracts a lot of businesses, particularly tech businesses, and this drove the housing prices up even more. Those lucky enough to get in early basically lived in paradise, and relative to this, got quite a bargain on their home.
As the California population has continued to grow by leaps and bounds, as Nick Vertucci has studied well, local governments, neighborhood groups, and environmental organizations have attempted to stymie the building of new houses and new apartment buildings in order to protect the lifestyle those lucky enough to get in early have come to enjoy. It’s the “not in my beautiful backyard” mentality.
Hasn’t the State of California Stepped In To Help?
For a long time, the State of California has set the number of new housing units that each city should build based on projected growth figures. This includes numbers for low income and middle income people who move into these local jurisdictions. However, this process has been thwarted by local governments and local people finding ways to limit the building of new housings units regardless of what the state requires and the projections it provides.
SB 35 is an intended fix for this problem. As Nick Vertucci has pointed out, this bill will help communities that have not housing growth to keep up with their growing populations. It will help circumvent local authorities and build more housing units regardless of their objections. This bill would not apply to communities who have built the required number of new housing units to keep up with their projected growth. However, for those lagging behind, this will be a way for those who need housing the most to finally get housing and or move closer to their job. It will also help the real estate developers who want to fill this need to proceed.
About Real Estate Magnate Nick Vertucci
Nick Vertucci is an American success story that has inspired thousands of people. After suffering major hardships in his early life, even living out of his van for a while, Nick found a way to persevere! After attending a real estate seminar, he went on to develop his own unique and dependable method of making good money in real estate. It wasn’t long before his repeated successes made him a millionaire. Nick now teaches this same lucrative method to others through the Nick Vertucci Real Estate Academy.