As California prepares for the upcoming elections, both homeowners and real estate professionals are paying close attention to candidates’ stances on issues that could reshape the housing market. The election results have the potential to bring shifts in policies related to housing affordability, property taxes, rent control, and climate initiatives, which could impact both property values and market trends statewide. Here’s a look at how these factors could affect California’s real estate landscape.
1. Housing Affordability and Supply
Housing affordability continues to be one of the top concerns in California. Many candidates are focused on this issue, with proposals ranging from increasing housing supply to providing incentives for affordable housing projects. If elected, candidates advocating for increased affordable housing may push policies that encourage developers to build low-income housing, which could alleviate housing shortages in some urban areas. However, these initiatives may also bring restrictions on luxury developments, potentially impacting property values and investment returns for high-end markets.
Example Impact: New housing initiatives could stabilize the rise of home prices in major cities, making homeownership more accessible. This could attract new buyers but may also reduce the competition for high-value homes.
2. Property Taxes and Proposition 13
California’s Proposition 13 has been a long-standing policy that limits property tax increases. Some candidates have proposed amending or rolling back parts of Proposition 13 to generate additional revenue for the state, which would primarily affect commercial properties and inherited homes. If these changes occur, property owners may face higher tax bills, impacting property values and the rental market.
Example Impact: Potential changes in property tax laws could increase the operational costs for landlords and affect rent prices, possibly leading to a slower growth rate in property values.
3. Rent Control Legislation
Rent control has been a highly debated topic, with proponents arguing it protects tenants from rapidly increasing rents, while opponents contend it deters investment in the rental market. Depending on which candidates win the election, new or expanded rent control measures could be introduced across California. This could lead to limitations on rent increases for landlords, influencing investor interest in the rental sector.
Example Impact: Rent control policies could stabilize rental prices in the short term but may discourage new rental investments, potentially leading to housing shortages in rental markets over time.
4. Environmental and Climate Policies
California’s strict environmental policies often impact the housing market, especially with regard to new construction projects. Candidates supporting stringent climate measures may introduce policies requiring energy-efficient building standards, which could increase construction costs but appeal to eco-conscious buyers. Conversely, looser regulations could benefit developers by reducing construction costs but might also lead to environmental concerns that affect the state’s appeal.
Example Impact: If new eco-friendly building codes are enacted, home builders may face higher costs, which could drive up property prices, especially in coastal areas where environmental concerns are a top priority.
5. Economic Policies and Interest Rates
The broader economic policies of newly elected officials can also influence real estate through changes in interest rates, employment opportunities, and inflation rates. If economic policies favor job growth and business expansion, they could increase demand for housing in California. However, potential interest rate hikes might make mortgages less affordable for buyers, potentially slowing down the market.
Example Impact: Strong economic policies leading to job creation could boost demand for housing, whereas high-interest rates could dampen buyer enthusiasm and reduce market competition.
Conclusion
The 2024 elections hold significant implications for California’s real estate market. With potential changes in housing affordability policies, property tax legislation, and rent control laws, the election results could shift the landscape for both buyers and investors. While affordability and supply measures may increase access to housing, tax and regulatory changes could reshape property values and rental dynamics in the state.