Real estate law in Sonoma County is continually evolving based on the way the market and government treats it. The pace at which these rules change is dizzying. This post will go over a few of those changes.
Reforms to National Flood Insurance Program
Between the flash floods, torrential rains, and forest fires, it’s hard to know if California is thirsty or drowning in water. However, with the recent torrential rains that nearly overwhelmed a California dam, it bears mentioning that the National Flood Insurance Program was reformed.
Flood insurance rates across the country have skyrocketed, in response; Congress passed the Homeowner Flood Insurance Affordability Act of 2014 which tried to mitigate some of these increases by applying actuarial risk and eliminating subsidies.
Tax Break on Second Homes
The California Legislature is eyeing a new bill that would end tax breaks for second homes. Currently, the Federal government gives tax breaks for first homes and partial breaks for second homes (in some ways). California is desperate to generate tax revenues to address the housing shortage.
One of the easy targets identified by the government is people who own second homes. Right now, second homeowners get a second tax break from the state. It is estimated if that break is eliminated it could generate an additional $220 million a year in tax revenue.
California is experiencing a traumatic housing shortage. Rents and prices are increasing all over the state, including the inland counties. The problem has become so bad that the Governor and Legislature are going into overtime to address the problem. Among one of the proposed solutions is ending a community’s ability to oppose new housing construction.
Currently, local community groups and cities can block new housing developments if it conflicts with the “character” of the neighborhood. Unfortunately, some cities have used this power to justify halting low-income housing in high-cost areas. To combat this trend, the Legislature is considering a bill to revoke this right from local communities and cities.
Sonoma County is not immune to these changes. Sonoma County, like the rest of California, is struggling with a housing shortage. Real estate law in Sonoma County is in flux while the County and the State grapple with solutions to California’s housing problem.
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