(Aug. 28 - By Jean Pasco, Kammi Foote, Craig Page and Rex Hime, Special to The Bee)
Senate Bill 391 is a regressive tax and the wrong way to fund affordable housing. Lawmakers should reject the bill and work to craft a more equitable way to achieve their goals.
The Sacramento Bee's editorial board has twice urged support for Senate Bill 391, which would impose a $75 fee for recording real property documents to fund affordable housing.
The editorials ("State needs to give homeowners a break," Aug. 27 and "California should renew support for affordable housing," Aug. 11) discussed the importance of providing affordable housing in California - and we fully agree. However, the editorials contended that this new fee "has a nexus to housing" and "is in line with how other states fund affordable housing." Not so.
The editorials highlighted only some documents to be charged the fee. Not mentioned were releases of mechanic's and child-support liens, affidavits of death, mining claims, lot-line adjustments, and business and construction loans, to name some of the hundreds of document types recorded daily. Many transactions involve multiple documents.
When it comes to affordable housing fees charged by other states, the name given the fee is where similarities end. Of the 10 states mentioned, all charge significantly less than $75. The fees range from highs of $58 in Washington and $40 in Connecticut to $3 in Missouri. In Washington, the fee started at $10 and has been increased twice. Of the total, only 40percent is sent to the state. In Pennsylvania, fees of between $15 and $26 are collected by and stay with each county. In Oregon - a state singled out for praise by the editorial board - the fee is $15 and exempts satisfactions of judgment and mining claims.
When asked during an Assembly hearing about the $75 figure, SB 391's author replied that it was because things cost more in California. Thankfully, that doesn't include recording a document. It costs between $6 and $18 to record a one-page document, with $3 each for additional pages. This low fee encourages people to record essential documents and protects the integrity of the state's public land records.
SB 391 amounts to a regressive tax. Anyone recording a property-related document must pay the fee, even those living on the edge financially. However, someone buying a multi-million-dollar home wouldn't be charged because sales transactions are exempted in the bill. Other ways to fund affordable housing have been suggested to the bill's author but rejected because they would require approval by state voters. In our view, avoiding voters when it comes to funding worthwhile programs isn't a long-term strategy for success.
We urge lawmakers to reject SB 391 and work to craft a more equitable way to fund affordable housing.
Jean Pasco is recorder and archive services manager in Orange County. Kammi Foote is Inyo County clerk-recorder. Craig Page is executive vice president of the California Land Title Association. Rex Hime is president and CEO of the California Business Properties Association.