Sacramento, CA – Today the Assembly Committee on Housing and Community Development approved Assemblyman Marc Steinorth’s Assembly Bill 1736. AB 1736 will allow first time homebuyers to open a “Homeownership Savings Account” to save more of their own money for the purpose of buying their first home. The state faces a crisis of ballooning housing costs, and this bill will help Californians surmount those costs in order to achieve homeownership.
“The growing cost of housing threatens the dream of homeownership, which is why I truly believe in the Homeownership Savings Account,” said Steinorth. “There is no question that homeownership is the best path to middle class wealth and stability- two things I want for my community. I will continue to champion this method of making homeownership a reality for our middle class families and millennials.”
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.
AB 1736 allows first time homebuyers to open a “Homeownership Savings Account,” into which individuals may contribute up to $10,000 per year. The account and any accruals would be exempt from income tax as long as the funds are withdrawn and used for a first down payment or closing costs. The bill enjoys bipartisan support in the Assembly and Senate, as well as a coalition of support from across the housing sector. It is now referred to the Assembly Committee on Revenue and Taxation for further consideration.
Assemblyman Steinorth represents the 40th Assembly District which includes Rancho Cucamonga, San Bernardino, Highland, Loma Linda, and Redlands.
