We are in the midst of an immense housing shortage in California, and our new Governor is on a mission to begin repairing it. Governor Gavin Newsom’s housing plan is part of his $1.75 billion 2019 housing crisis package. He spoke throughout his campaign about building 3.5 million new housing units in California by 2025. The plan consists of $250 million allocated to help cities and counties with planning, $500 million in housing production incentive grants for local governments, and $500 million for expanding the State Housing Tax Credit Program to spur middle-class housing production and modernizing long-term Regional Housing Need Allocation (RHNA) goals by 2022.

PACE loans, or Property Assessed Clean Energy loans, are a way to borrow money for clean energy projects. California has many providers of PACE programs. A consumer may see them in the marketplace as HERO, (Home Energy Renovation Opportunity), YGrene, or CaliforniaFIRST. These loans get people’s attention because they finance green energy projects with no down payment, and it is pretty easy to qualify. However good they look on paper, they are dangerous for most homeowners and those buying or selling homes need to be especially aware of what they entail. PACE loans are secured by the home, meaning that if the property owner fails to make payments it is possible to lose the home in foreclosure. Which is of particular concern because payments can be more costly than a property owner anticipated.

California has continuously adopted aggressive and far-reaching goals for greenhouse gas emissions reductions. Specifically, these goals aim to reach an 80 percent reduction below 1990 greenhouse gas emissions levels by 2050. Local jurisdictions in the Sacramento Region toyed with the idea of mandating electric appliances to lead the state in greenhouse gas emissions policy. Electrification has also been discussed statewide. The California Building Industry Association recently funded a study to investigate the true costs to consumers to electrify their homes. In this initial phase of the study, they looked at single-family homes in several locations in Southern California.

Read the current status of the most important legislation to the real estate industry. Most of the following are bills in the California State Legislature, and two in Congress. We are closely following these bills as they all have potential to influence you as our members.

On February 7th, the NAR held their first annual Policy Forum at the Grand Hyatt in Washington, DC. This forum included dozens of industry stakeholders and hundreds of invested attendees who want to be a part of the reform that Congress and the Federal Housing Finance Agency (FHFA) are proposing for government sponsored enterprises. Two of these GSEs, Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac), are extremely important players in the housing and tax industry. They were created in order to improve the flow of credit in the housing market, while also reducing the cost of that credit. NAR’s proposal was presented at this forum by co-authors Richard Cooperstein, head of Risk Management at Andrew Davison and Company and Susan Wachter, Professor of Real Estate and Finance at the University of Pennsylvania.

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