The good news is that it orders developers to devote a portion of their projects to low- and moderate-income families and individuals. Considering that the per-capita annual income in L.A. is $27,749, the new regulations benefit a good portion of the city’s population.
However, the law doesn’t apply to rental housing but to any housing for sale. But the new regulations would require developers to sell properties at below-market rates, which could provide relief for home buyers in the area.
The unanimous decision was written by Chief Justice Tani Cantil-Sakauye, who said that the lack of affordable housing has produced “significant problems” over the last 30 years. “These problems have become more severe and have reached what might be described as epic proportions in many of the state’s localities,” she wrote in the court’s decision.
Although the decision applies to all of California, Los Angeles residents are especially expected to benefit, so long as they happen to be in the market to buy a home rather than rent one.
One area where buyers wouldn’t necessarily see relief, however, is their homeowners insurance. According to the New York Times, deductibles for urban and farmers homeowner insurance throughout the country can vary depending upon location, similar to how car insurance rates can go up for drivers under 25 or over 70 in most places.
But now developers in California would have to comply with the low-cost requirement in order to secure building permits. The regulation would apply to condos, apartments, and other units for sale in addition to houses in planned communities.
Developers would receive their building permits so long as a portion of a building or buildings is set aside for lower-income buyers. The law was modeled on one in San Jose, which required builders of 20 or more housing units to offer at least 15% of them at below-market prices or else pay into a city fund.
As an alternative to the statewide law, builders can instead pay into a fund through the state that go toward low-cost housing for California residents.
Nearly 200 cities and counties in the state have similar laws on the books already.