Assemblyman Marc Steinorth Introduces Legislation Encouraging Saving Money Toward Homeownership

Press Release

  1. Assemblyman Marc Steinorth Introduces Legislation Encouraging Saving Money Toward Homeownership

SACRAMENTO, CA – Assemblyman Marc Steinorth (R-Rancho Cucamonga) introduced legislation encouraging Californians to save money toward homeownership and making it easier for middle class Californians to achieve the American Dream.

California is home to some of the country’s most expensive housing, directly resulting in the nation’s third-lowest homeownership rate. In order to incentivize California residents to save more money toward achieving the American Dream, Assembly Bill 1736 allows Californians to open a Homeowner Savings Account (HSA). Similar to the already-existing College Savings Account, HSAs would let residents deduct up to $20,000 deposited in the account each year on their taxes.

“California is in the midst of a dire housing affordability crisis, created by well-intentioned but damaging policies from Sacramento that stunt economic growth and inhibit access to the middle class. This bill is a critical first step toward addressing California’s sky-high housing costs,” said Steinorth. “The dream of owning a home is the foundation our middle class is built on. I am firmly committed to keeping that dream alive.”

AB 1736 specifically allows first-time homebuyers to annually deduct the amount deposited in the account from their state taxes, up to $10,000 per year for individuals, and up to $20,000 for couples. The withdrawal of funds remains deductible from state income tax as long as it is used for qualified expenses, including a down payment or closing costs.

The cost of housing in California is significant. According to the nonpartisan Legislative Analyst’s Office, California has the second-highest median home price in the nation and residents’ housing costs, as a share of income, remain far above the national average. In fact, more than half of middle-class California families spend more than 30 percent of their income on housing, which the U.S. Department of Housing and Urban Development defines as “cost burdened.” Increased housing costs lead to significant trade-offs for the middle class California family including: postponing or foregoing homeownership, living in more crowded housing, commuting farther to work each day, or choosing to work and live elsewhere.

Assemblyman Steinorth represents the 40th Assembly District which includes Rancho Cucamonga, San Bernardino, Highland, Loma Linda, and Redlands.

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