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LOFTIN I BEDELL P.C. City of Santa Ana City Council c/o Office of City Clerk City of Santa Ana August 28, 2023 Page 5 of 10 The conclusory discussion related to the "Injustice of Proposition 13" and Mike Levin's political statement opposing Proposition 13 in SA Footnote 6 does not acknowledge the date for the political position nor purpose of this political statement. Further, the political statement is flawed in that it failed to consider or address among many other negative impacts of repeal of Proposition 13: (i) the mathematical analysis does not consider increases in costs to operate, repair and maintain properties is significantly higher than 3%,10 (ii) the impact on development, repair, replacement and maintenance due to substantial increase in costs specifically related to substantially increased regulatory requirements and governmental fees, (iii) the increase in other types of taxes, insurance, (iv) Prop 13 has been amended, (v) the silent owner who loses his/her home due to highly escalating property taxes. The primary beneficiary of eliminating Proposition 13 is you, the City, and other governmental entities; the primary injured parties will be the moderate and low income homeowners who bought relying on the formula, and who may have saved and bought another property gradually creating a legacy in rentals for their heirs and (vi) the significantly added costs to owners of rental property which will over time negatively impact the quantity of rental properties and (vii) Proposition 13 has been amended since the distribution of the Levin Political Statement. For a discussion and objection to Staff Report Footnote 8 see Opposition Footnote 11, belowll 10 For a financial and participant analysis of the elements required to provide affordable housing, See: Urban Institute, National Housing Conference, July 2016, "The Cost of affordable housing: Does it pencil out?" (https//apps.urban.org/features/cost-of-affordable-housing/). " Staff Footnote 8 was included in the discussion related to the repeal of Proposition 13. The spurious argument that the existence of Proposition 13 may be a cause of increased rents and results in inequities between homeowners and renters in that homeowners have a protection against increased property taxes. The assertion then is that renters deserve a protection from rent increases similar to homeowners having a limited protection against increased property taxes (no discussion of impact of special assessments and other financial differences between the two categories of residential occupants such as homeowners pay for maintenance and other governmental costs whereas renters pay rent and the landlord pays those additional costs. A Note on the document: the Federal Housing Finance Agency, an agency funded by the Federal government and a lender insurance provider that requires stringent underwriting re costs and income from properties, sent a "Request for Information" to university professors and certain housing groups to comment on whether an additional underwriting provision providing rental income restrictions should be required. The article highlights the current issues related to homelessness and the housing availability close to work centers. These issues are being addressed by such statutory actions requiring ADU/JADUs, increased density, reducing parking requirements, public transportation; however, the State and local jurisdictions need to reduce the costs and time of development is not reduced. Rent Control will not eliminate the issues. The recommendation was for Fannie Mae and Freddie Mac to require some rent regulation but offset that requirement with changes in loan terms, high loan -to -value ratios, longer loan periods, and other loan costs mitigations. It also emphasized that any requirement for a rental costs term be added to the underwriting, that the underwriting and loan terms must maintain the landlords' ability to receive a fair and reasonable return on their investment. In summary, the response was an opinion piece with political overtones which assumed many assertions were facts and as such is not a proper evidentiary basis upon which to support this 2023 Ordinance Amendment. Unless, the City elects to provide the financial offset to the imposition of rent limitations as was recommended to FEMA.