California introduces new fee on real estate deals to pay for low-income housing

In a bid to create more affordable housing in California, Gov. Jerry Brown signed a bill Friday to enact new fees on real estate deals in the state.

A fee of $75 will now apply for essential documents such as deeds and notices, up to a cap of $225 per transaction. When the law was approved by the state Senate earlier this summer, it was estimated these fees would bring the government between $200 to $300 million annually.

Brown says the additional revenue from the fees will be a permanent source of funding to pay for affordable, low-income housing, of which lawmakers estimate 1.8 million units are needed in the state, according to the Wall Street Journal.

The Journal noted the fee on real estate deals was “one of the sharpest sticking points” during lawmakers consideration of the bill with some county governments and groups such as the National Federation of Independent Business, the California Mortgage Association and the Howard Jarvis Taxpayers Association in opposition.

[Wall Street Journal] — E.K. Hudson