From the Field: California Bill to Reform the State’s Mortgage Interest Deduction Advances in Legislature

Mortgage interest deduction (MID) reform continues to progress in the California state legislature. The “Bring California Home Act” (AB 71) would eliminate the state’s MID for second homes, which are often used as vacation homes, to produce an estimated $300 million annually that would be reinvested in the state’s low income housing tax credit program and farmworker housing. AB 71 is considered an important revenue solution for affordable housing in California, where state investments have declined dramatically over the past decade. A large coalition has been working to secure the passage of the bill, including Housing California, Non-Profit Housing Association of Northern California (NPH), Southern California Association for Non-Profit Housing (SCANPH), the California Housing Partnership, and the California Coalition for Rural Housing.

AB 71 cleared a major hurdle on May 15, passing in the Assembly’s Committee on Revenue and Taxation by a vote of 7 to 3. Low income residents from throughout California testified before the committee on the tremendous need to expand rental housing options at lower affordability levels. This testimony was organized by Residents United Network (RUN). Other advocacy activities organized by RUN included in-district lobby meetings and a tweetstorm using the hashtag #ShelterfromtheRain.

Assemblymember David Chiu (D), the lead sponsor of AB 71, praised the efforts of residents to support the bill, and indicated that the fight for AB 71 has been one of the toughest he has had during his time in the legislature. The bill now moves on for further committee consideration before a potential floor vote in the coming weeks.

“We are excited to see strong support at the committee level for this essential piece of legislation, but there is a long way still to go,” said Lisa Hershey, executive director at Housing California. “In order to pass a floor vote and make it through the Senate, we will need a sustained advocacy push from residents, developers, and allies throughout the state.”

To learn more about the “Bring California Home Act” and state MID reform efforts in Oregon, watch the most recent United for Homes monthly webinar at:

For more information on California’s efforts contact Tyrone Buckley, Housing California policy director for land use and finance, at: [email protected]