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Key California housing bills enter the home stretch [The Mercury News :: BC-REAL-CALIF-LEGISLATION:SJ]

SACRAMENTO, Calif. - As Californians reel from sky-high rents and home prices fueled by the economic boom, state lawmakers return Monday from their summer recess to debate proposals attacking the housing crisis.

In the feverish final four weeks of the legislative session, the Legislature will take up bills to speed permanent housing for the homeless, overhaul zoning rules to allow apartment buildings on more BART parking lots, and create a workaround for millions of California households pinched by a new, $10,000 federal cap on state and local tax deductions.

Many of the bills take aim at what some lawmakers and activists see as a reluctance by cities - particularly some suburbs - to ease the housing crisis by allowing denser development. One closely watched proposal, which will move to the Senate floor if approved Monday by the Senate appropriations committee, would require cities to allow housing developments on BART's expansive parking lots.

"Given the twin housing and congestion crises, building housing next to major transit is simply common sense," said David Chiu, D-San Francisco, who leads the Assembly's housing committee.

But Chiu's Assembly Bill 2923 faces opposition from Alameda County and cities such as Fremont, Hayward, Lafayette and Pleasant Hill. And despite BART's neutral position, one BART director from Contra Costa County panned it as "a terrible bill" in an email to constituents that was posted this week on the Nextdoor forum.

In an interview, Director Deborah Allen said the transit system had a hard enough time running its trains and that it has no business taking on new powers and responsibilities. Allen - who ran for state Assembly in 2016 against one of the bill's authors, Democratic Assemblyman and former Concord Mayor Tim Grayson - also said she worried such development would "urbanize" suburbs such as Concord and Lafayette, whether they like it or not.

"BART's mission is 'safe, clean, reliable, quality transit,' so this is mission drift," she said.

The bill is an effort to push forward a goal that BART adopted in 2016: building 20,000 homes throughout the system by 2040, with 7,000 units of low-income housing. AB 2923 would require BART to adopt standards for building such housing, and for cities to change their zoning rules accordingly. The legislation would affect only stations that have representation on the BART board of directors - currently, Contra Costa, Alameda and San Francisco counties.

This and other proposals have until Aug. 31 to be approved by the state Legislature. If passed, they move to Gov. Jerry Brown's desk for a signature or veto.

Housing for the homeless: Chiu, a former San Francisco supervisor, is also carrying a bill to sidestep some of the local politics that can delay or derail housing developments for the homeless and disabled. Assembly Bill 2162 would fast-track such projects, which offer affordable leases on apartments with optional support services. The bill aims to speed construction by making proposed developments exempt from environmental reviews and other approvals as long as they comply with a city's zoning rules. If approved by a fiscal committee on Monday, the bill moves to the Senate floor.

Building their fair share: Two of the pending bills, Assembly Bill 1771 and Senate Bill 828, are attempts to overhaul a complex system underpinning local housing development. Today, each city and county is assigned a number of low-income and market-rate housing units it needs to add in its blueprints for the future, typically over an eight-year cycle. But the way those numbers are parceled out, by regional councils, is widely criticized as political, and it allows local governments to swap with each other. (The wealthy city of Beverly Hills, for instance, was assigned just two low-income housing units over an eight-year period.) The proposals are an attempt to remove some of the politics and require stronger state oversight.

Tax workarounds: State lawmakers responded quickly this year to a federal overhaul of the tax code that hit high-tax states like California, Illinois and New York with a $10,000 cap on state and local tax deductions. Two pending proposals aim to help the roughly 2.5 million California households expected to be squeezed by the change by allowing them to deduct an additional amount over the cap by claiming it as a charitable contribution.

Senate Bill 227, by state Sen. Kevin de Leon, D-Los Angeles, would allow Californians to make a contribution to school districts, charter schools and community colleges, through a special fund, in exchange for state tax credits of 85 cents on the dollar - and, unless the IRS challenges it, the chance to deduct the full donation on federal taxes. Under Assembly Bill 2217, by Assemblywoman Autumn Burke, D-Inglewood, taxpayers would be able to give money to school districts, colleges or nonprofit organizations that buy tax credits from the state. Those schools and nonprofits would get 10 cents for each dollar donated, as would the state; the taxpayer would get 80 cents and, in theory, be able to deduct the full amount of the donation on federal taxes.

In May the IRS issued a warning to states trying to circumvent the tax cap, saying that it planned to issue new rules soon. But tax experts such as UC Davis law professor Darien Shanske say California's proposals resemble many of the existing tax-credit programs across the country, many of them, in red states.

"The IRS, by saying we're going to issue new regulations," Shanske said, "has in essence conceded the point that at least the interpretation of the law and under the law as it stands, that these programs should be respected."


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