SB15 would encourage cities to rededicate unused commercial properties


Senator Anthony Portantino’s bill allows cities to repurpose residential property and impose an estimated sales tax of seven years during which vacant businesses could have sprung up.

Sacramento, CA – A California legislature tries to solve the state’s real estate crisis with a new bill. The bill also revives the vacant commercial space above and below the state.

Senator Anthony Portantino Building, Senate Act 15, aims to empower local governments and create incentives for commercial real estate repurposing to make room for affordable housing that is badly needed. D-La Canada’s Portantino said one of the main barriers to building affordable homes so far has been that cities earn more from sales tax than from property tax. It was a fact.

“One of the factors behind the crisis was the monetization of land use,” says Portantino. “Over the past three decades, cities have received more sales taxes than property taxes, which has kept cities from chasing retail and housing.”

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Portantino says its bill will change everything by giving local governments the same amount of money that dormant properties would have generated with sales tax. He also said the coronavirus pandemic had accelerated the shopping trend to sell online outside of physical stores.

“During the pandemic, it is clear that more and more physical stores will be closed and more vacant lots will become available as shopping trends change. [SB15] I really face this problem, ”said Portantino.

Empty or unused commercial space that is subject to reallocation ranges from at least 75,000 square feet of retail stores, multiple shopping malls, and even large supermarkets. “Idle”, as mentioned in SB15, means that at least 80% of the site is unoccupied and has been occupied for at least 12 months.

And the provisions of the bill ensure that apartments developed in these commercial areas are intended for low-income and wage-dependent housing – 80% of the median income level, according to Portantino.

“To be honest, that’s one of the strengths of this law. Some of the other housing laws that run through the legislature make it clear that it has to be affordable housing. No. The bill gives details on this, and that’s one of the reasons why affordable housing activists prefer it, ”Portantino says.

SB15 funds the California Housing and Community Development Department (HCD). The HCD issues a one-year funding notification for grants that the City of Interest can apply for. HCD will then accept applications for these grants after the 12 month period has expired. HCD does this every year when funds are available.

In order to be eligible for the grant, the city or local government must rededicate at least one unused location. Confirms an occupancy certificate stating that the property is used for low-income residential parcels within the meaning of the draft law (up to 80% of the regional average income). Then apply for a grant from HCD and provide evidence that you meet all the requirements.

Financing details were not included in the invoice. However, if the number of applying cities exceeds the annual funding announcement, the funds will be reduced and proportionally distributed to all applicants.

The bottom line is that the SB15 wants to create space for more living space that California urgently needs. Not enough homes have been built, according to an HCD survey. Housing Sector Survey Shows California must produce 180,000 new homes each year to keep up with demand. But over the past decade, the state has built an average of only about 80,000 new homes a year.

Supply shortages and rising housing costs are exacerbating inequality and advancement opportunities for young adults in California, according to HCD research. This also suggests that new builds are in areas where there are few jobs available.

Portantino said SB15 is optimistic that it could lead to significant increases in new home production in areas where the labor market is thriving.

“Last year we got it throughout the process, but if you remember, there was madness between the two houses last night and a lot of the bills didn’t come back from Congress. Was one of the bills caught in the swamp last night, ”he said.

But, given the complications of what appears to be the pandemic now behind and the government-funded storm, Portantino is more confident that Senate Bill 15 will become a reality.

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“I am very optimistic to put this on the governor’s desk. I am very optimistic that it will fit into my budget and I am very optimistic that it will lead to a significant increase in housing production across California. I am optimistic, ”he said.

SB15 cleared the seats of the state parliament at the beginning of June. From here it goes to the Parliamentary Housing Commission, then to the Parliamentary Expenditure Commission and then to the Parliamentary Floor. If you can take all of these hurdles without making major changes, go to Governor Gavin Newsom’s desk and sign the law. At this point the developer can create a plan.

“Developers want security. Cities want a reason for this. It offers both, ”said Portantino. “This creates a local program to support these developers. It ensures that the zoning is done. Therefore, the plan can take effect immediately after the signing of the governor. “

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