Your Real Estate Advocacy Resource - March, 2018



Regional anti-growth initiative could push more housing into crowded cities

As if the housing crisis in San Diego County is not bad enough, a citizen’s initiative effort has been launched to place a measure on the November ballot that would force more housing into crowded cities.

The state of California goes through an extensive planning process to project future growth and therefore regional housing needs.  This process is known as the Regional Housing Needs Assessment (RHNA) and once that figure is determined, the San Diego Association of Governments (SANDAG) distributes the projected numbers to cities and the county. This is the basis for cities to plan for future growth.

Historically, cities and the unincorporated areas of San Diego County are assigned housing numbers based upon their capacity to accommodate this future growth.

The citizens’ back country initiative would require a public vote on any project that proposes more housing units that currently approved by the general plan. This would add tremendous cost and time to proposed projects, and further inhibit the creation of needed housing. This would essentially force greater density into cities to accommodate the housing units allocated to the county areas.

Stay tuned.  If the initiative does quality for the November ballot, look for a spirited campaign to oppose this ballot-box planning issue and preserve private property rights.


NSDCAR would like to thank the many REALTORS®            who have worked tirelessly to gather signatures for this important initiative. Many of you have been very active in this effort and it looks like the CAR is very close to getting the signatures required for this to be on the November ballot.

This measure would allow seniors 55 and older to move and keep their current property tax base.  Current law allows this to be done one time, and only in some counties. The measure being sponsored by CAR would make this statewide and it could be used more than one time by seniors.

Many seniors are locked into homes they have lived in for years, because they can’t afford the higher property taxes if they moved.  The state legislative analyst estimates this measure could stimulate as much as 40,000 new real estate transitions a year. In addition to allowing seniors to move, it would open new ownership opportunities for young families.   

The deadline for submission of signatures is fast approaching, so if you have any petitions, please return them to NSDCAR this week.  Even if you only have one or two signatures on a page, get them back to us promptly.  Make sure you have filled in the information about who circulated the petition. 

Thank you for your efforts. 

Once again, California Sees the Unintended Consequences

of Bad Legislation

From the Orange County Register

SB2, by Sen. Toni Atkins, D-San Diego, imposes a $75 fee on real estate transaction documents such as deeds and notices with a cap of $225 per transaction.

Senate Bill 2, is a new $75 tax on real estate recordings, ostensibly for the purpose of funding housing programs. We pointed out that imposing a tax on real estate transactions to pay for programs to make housing more affordable is like treating someone with a low blood count with leeches.

While the fundamental irrationality of SB2 is water under the bridge, a host of implementation problems have now arisen that need corrective action, and quickly.

For example, SB2’s language makes it difficult for California’s 58 County Recorders to determine if they should charge the additional $75 for tax liens and lien releases presented by government agencies.

These tax liens can originate from small local business activities like selling Avon, from failure to pay your annual income taxes, from a missed tax payment on your jet ski, for child-support collection and more. You don’t even need to own a house to have one of these liens recorded against you, and worse yet, you may not even know that the lien exists until it shows up on your credit report.

State agencies and the IRS have refused to pay the $75, arguing that these documents are exempt from the new tax. The attorney general agrees (see AG 18-101), but California’s Office of Legislative Counsel issued an opinion that contradicts the attorney general — making it even more confusing for taxpayers and county recorders.

At this point, most recorders interpret the statute as mandatory, because the legislative counsel has told them this was the original intent of the bill. Therefore, they are mailing back lien releases as unrecorded to state agencies and to the IRS for lack of the $75. For property owners, this is a real problem because their debt has been paid but their credit is not cleared because the lien hasn’t been released.

Some taxpayers are so eager to clear their credit that they are intercepting the lien releases at their county recorder’s office and offering to pay the $75, legal or not. The Department of Child Support Services intends to record all lien releases itself instead of giving them to the redeemed payer to record more quickly on their own, but it is still being held up. Some child-support payers might be offering to take the release to the recorder themselves and paying the $75 to have their credit cleared. As the situation continues, however, others might be discouraged from paying up their child support arrears or tax debts in the first place. The extra hurdle is not helping the government, the taxpayer, or the children.

It is also true that the state of California cannot tax the federal government. Although this has been settled law for hundreds of years, many county recorders are attempting to collect the tax from the IRS. And although this is legal doctrine, it makes common sense as well. Would there be any sense or justice if the states had the power to tax the federal government out of existence?

Because the language of SB2 is so confusing, and it relies on many assumptions that the county recorder has no ability to independently verify, payment of the tax on most documents relies on self-certification. Most people do not have law degrees, so many people are paying the tax when they are not legally required to pay it, and others are receiving exemptions when they are not entitled to them.

SB2 gives a long but non-exclusive list of “real estate instruments” to which the fee applies. This includes a “release” and a “mechanic’s lien,” but not just a “lien” nor a “tax lien,” and certainly not a “child support lien.” SB2 also uses the words “transaction,” “in connection with” and “relating to real property,” none of which are defined in statute. Is enforcing a government debt a “transaction”? Are IRS tax liens and releases “relating to real property”? Tax liens use specific real property to enforce a debt, but they are not like a mechanic’s lien where the contractor performed work on that specific property.

There are many other types of liens where intent could vary as to whether to charge the $75: liens for postponement of property taxes for senior citizens, government liens recorded in error, government liens released due to discretionary re-prioritizing, and, less sympathetically, liens for graffiti nuisance abatements or violations of various safety codes. It is unclear whether the legislature intended to extend the tax to these recordings, although they were aware that this was a potential issue and chose not to address it.

Clean-up legislation is needed promptly. SB2, as substantive legislation, was bad enough. Its implementation is almost worse.

The Beacon” is a regular publication of NSDCAR designed to keep you aware of important issues and to help members understand the power of the Realtor Voice and the value of the Realtor Advocacy program. 

“The Beacon” is a regular publication of the North San Diego County Association of REALTORS® designed to keep you aware of important issues and to help members understand the power of the REALTOR® Voice and the value of the REALTOR® Advocacy program.  
North San Diego County
Association of REALTORS®