Homeownership savings accounts offer hope


  1. Homeownership savings accounts offer hope - Marc Steinorth California Assembly

Story By Marc Steinorth | The Press-Enterprise

Right now, surplus and scarcity are the buzzwords of Sacramento. The state is enjoying an almost unprecedented infusion of billions of extra dollars into its coffers. But count me as skeptical it will be spent or invested in ways that deal with our structural deficits and massive long-term debt obligations.

At the same time, we also are experiencing a shortfall just as real: a drought crisis, wage stagnation and a still-sluggish manufacturing economy. I’m not confident these will be addressed as honestly and informatively as we need, either.

But one challenge for the state is staring us right in the face – and it is garnering neither the attention nor the interest that tens of millions of Californians need and deserve.

We are and remain mired in a housing crisis that has simultaneously priced out even people of means from purchasing a home and slammed a door in the face of middle-class families striving for the American dream of homeownership.

According to the California Homebuilding Foundation, the number of annual housing permits in 2015 was similar to the slowest years in the 1980s and 1990s. This shortage is consuming both the affordable and middle-class housing markets alike.

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. A Chapman University study concluded that, as more than half of middle-class California families spend over 30 percent of their income on housing, spending on other staples of our economy – food, clothing and transportation – had dropped or stayed about the same.

Driven in part by potential buyers being forced into the apartment market, rents have risen to a point they now compose the largest share of income in modern U.S. history.

This means that the spike in housing costs canceled out savings made elsewhere in 2015, like a drop in the price of gas. The vaunted consumer savings bragged about in the Capitol are actually a victim of a zero-sum game that hardly anyone dares mention.

What follows are the inevitable trade-offs for the middle class, especially in the Inland Empire: Decades as a renter, living in more crowded housing, commuting farther to work each day or choosing to work and live elsewhere.

This is how communities break apart – and it is happening now. Yet the policymaking response from Sacramento has been at once inadequate and unintelligible.

It is time for new ideas that empower every individual to take charge of their housing future and allow Californians unprecedented opportunities to save, invest and purchase their share of the American Dream.

That is why I authored Assembly Bill 1736, to develop a California Homeownership Savings Account – allowing first time homebuyers to deposit money into a tax-exempt account that must be put toward qualified home buying expenses, such as a down payment or closing costs.

This will do more than merely set aside funds for the future. It inspires and incentivizes the best public policy of all: hard work, personal responsibility and community initiative. Millions of Californians are, right now, ready to save, prepared to work and want to do what is necessary to buy their first home. It is appalling that a lack of imagination in Sacramento is literally locking them out.

Our state’s current housing crunch and middle-class struggles are not derivatives of each other. They are connected – to improve one is to enhance the other. And every day that goes by without a solution will cause each to get worse.

Read the original post at The Press-Enterprise

Story By Marc Steinorth | The Press-Enterprise
Marc, his wife Maria and their two children live in Rancho Cucamonga. He represents the communities of Redlands, Highland, Rancho Cucamonga, Loma Linda and San Bernardino including the unincorporated areas of Mentone, Lytle Creek, Devore and portions of Phelan.

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