Sacramento, CA—On Wednesday, September 28th, Governor Newsom signed into law Assembly Bill 1933, authored by Assemblymember Laura Friedman (D-Glendale). AB 1933 provides a property tax welfare exemption to non-profit home builders who construct owner-occupied homes for low-income families, all to be first-time homebuyers. It will make it easier to build affordable housing for individuals and families to purchase—not just rent.
“I commend Governor Newsom for recognizing the value of this bill, as we have needed to provide more innovative ways to make housing more affordable and accessible,” said Assemblymember Laura Friedman.” “California has a housing deficit of 180,000 housing units annually. Incentivizing non-profits to build single-family homes and encourage homeownership will lead to more houses, stable families, and safer communities. AB 1933 is also a measure that will pay for itself over time as the homeowners begin to pay property taxes, and the non-profit can use the exemption to build even more units.
“For too long, nonprofit affordable homeownership developers like Heritage Housing Partners have been denied a property tax welfare exemption based on technicalities,” said Charles Loveman, Executive Director of Heritage Housing Partners. “AB 1933 will save tens of thousands of dollars a year that can be immediately directed to building more affordable homes for low-income, first-time homebuyer families. It is a tangible way to ease California’s housing affordability crisis. Heritage Housing Partners would like to thank Governor Newsom, Assemblymember Friedman, and the State Legislature for their support.”
This welfare exemption will save Heritage and similar non-profits many thousands of dollars in property taxes on every home they construct. Once the home is sold, it will go back on the tax rolls. Over time, the assessed value and property tax paid by the homeowner will always be worth more than the initial property tax paid at project commencement. Local governments retain property tax revenue and receive the benefit of new homes in their communities.
The bill includes multiple safeguards to ensure that only low-income first-time homebuyers purchase these properties. These include that only a capped percentage of the household income can go toward housing costs, and the non-profit builder is required to conduct an annual audit to continue to receive the exemption on their properties.
AB 1933 has the support of Habitat for Humanity, LA County Assessor Jeffrey Prang, and Alameda County Assessor Phong La. The provisions of AB 1933 will go into effect on January 1, 2023.
Laura Friedman represents the 43rd Assembly District which encompasses the cities of Burbank, Glendale, and La Cañada Flintridge, as well as the communities of La Crescenta and Montrose, and the Los Angeles neighborhoods of Atwater Village, Beachwood Canyon, Los Feliz, East Hollywood, Franklin Hills, and Silver Lake