Tax breaks for second homes could end under lawmaker’s proposal to fund low-income housing – California News

Tax breaks for second homes could end under lawmaker’s proposal to fund low-income housing – California News

In their quest for more money for low-income housing construction, state lawmakers are now turning to Californians who own more than one home.

Assemblyman David Chiu (D-San Francisco) introduced a bill Friday to end a tax break that allows homeowners to deduct the interest from the mortgage on their second home from their state taxes. About 31,000 Californians received the tax break last year, costing the state about $300 million, Chiu said. The bill, AB 71, would direct those funds to an existing program that finances low-income housing construction through tax credits.

“We need to ensure everyone has a roof over their head before we spend tax dollars to help a small group of people have two roofs,” said Chiu, who heads the Assembly Housing and Community Development Committee.

In recent years, state lawmakers and Gov. Jerry Brown have not agreed on major legislation aimed at addressing the state’s housing shortage at a time when home prices are spiking across California. Most notably, Brown and the Legislature earlier this year failed to reach a deal to implement Brown’s proposal to spur housing production by limiting some local approval hurdles for housing projects amid concern about weakening environmental laws and construction worker pay.

AB 71 is one of multiple bills introduced by Democratic lawmakers this month aimed at increasing money for low-income housing and boosting its production. Another new measure from Chiu would provide state dollars to cities that speed up permitting and environmental reviews within neighborhoods that reserve at least 20% of future housing development for low-income residents. Other bills would…

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