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ownership to those who rent in California and could not otherwise afford to buy a property without assistance.
According to a recent the American Community Survey, California’s rate of home ownership is at just 56%, and is second lowest in the U.S. behind New York. The proposed fund could possibly extend the American Dream to more Californians, while at the same time placing the state at risk of loss of the equity invested by taxpayers.
In order to fund the scheme, California would issue revenue bonds in the amount of $1 billion each year for 10 years to create the fund, and California’s taxpayers will “foot” the bill! The proposal also includes $50 million in the budget for the current year, and $150 million per year thereafter to pay for the administrative costs of the program and the interest costs of the revenue bonds. The plan targets assisting about 7,700 homebuyers each year.
The details of the program, including start dates, are still being negotiated. However, if ultimately approved, the plan would be to issue interest-free, second mortgage loans covering up to 30% of a home’s purchase price, though lawmakers expect many of the loans would cover 27% and borrowers would be required to put up 3% of their own money or pair the loan with other first-time buyer programs. The interest-free loans would be paid back into a state fund whenever the home was sold, or at such time a bigger mortgage was acquired in a cash-out refinancing.
So long as home prices continue to rise in California, the scheme could eventually pay-off for the state, and hopefully the proposal would generate sufficient returns for the state to help future homebuyers. If prices fall, homeowners might still gain some equity and the fund would absorb the losses. As with most
programs like this, taxpayers need to beware of the unintended consequences.
NEW SOLAR NET METERING RULES GIVE RENTERS A RAW DEAL
After months of debate, the California Public Utilities Commission (CPUC) is on the brink of issuing yet another version of NEM 3.0, its rules governing net metering for residential solar installations. Despite all the public comments and rallies, one group of Californians has been largely overlooked: the millions of renters who stand to pay the price if the CPUC’s rules stifle the growth of rooftop solar.
The premise of net metering is simple. Customers who generate excess power from their rooftop solar systems are compensated for delivering that electricity to the grid for their neighbors to use. This policy benefits residents, schools, and businesses, by allowing them to save money on utility bills. And it helps the electric grid by making local power available to meet growing energy needs.
Our state’s investor-owned utility providers have been attempting to cut payments granted to solar customers for the excess power they generate and
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