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The following article was posted on May 15th, 2013, in the New Times - Volume 27, Issue 42 [ Submit a Story ]
The following articles were printed from New Times [newtimesslo.com] - Volume 27, Issue 42

SLO County objects to a proposed recording tax

BY PATRICK M. KLEMZ

The SLO County Board of Supervisors voted May 14 to oppose a bill in state Senate committee that would fund new low-income housing programs with a $75 tax on recording real estate instruments. County Clerk-Recorder Julie Rodewald asked for the supervisors’ backing in opposing Senate Bill 391, which would place the burden of collecting the tax on county staffers.

SLO County predicts the recording tax would prove unpopular with homeowners. So as to not dampen the recovery of the California housing market, the sponsors of S.B. 391 included a tax exemption for buyers recording new deeds of title. SLO County’s opposition letter objects to the fairness of giving the buyer of a $1 million home the only free pass.

“Yet, the widow recording an affidavit of her husband’s death … would be bearing the burden of funding low-income housing projects,” the letter reads.

Sen. Mark DeSaulnier (D-Concord) introduced the bill to revitalize low-income housing programs that wilted after the state cut funding to local redevelopment agencies. His office did not respond to a request for comment as of press time.

Several low-income housing advocates urged the supervisors not to formally oppose the bill yet. Currently, the only substantial public support for low-income housing projects comes from federal tax credits that depend on the construction of market-rate housing. Paradoxically, low-income developers receive more credits under allocation formulas if they can show other sources of public funding.

“Nobody likes a tax, but this is the only way to fund affordable housing,” SLO County Housing Trust Fund Director Jerry Rioux said.

The letter also speaks to the plight of those struggling to redeem a mortgage in foreclosure. According to county staff, a local homeowner in default records an average of five instruments after receiving a foreclosure notice from the bank, meaning such homeowners would have to fork over an extra $375 to keep their home if S.B. 391 passes as written.