Real Estate Round-up: V is for vehicle miles traveled
Last updated 9/3/2021 at 7:33pm
In the last 15 years, the State of California has adopted key legislative bills that address the reduction of greenhouse gas emissions. Specifically, Assembly Bill 32 (AB 32, 2006) sets a statewide GHG reduction target to return to the 1990 emissions level by the year 2020.
In addition, in 2008, California adopted SB 375 which specifically addresses emissions from transportation. SB 375 directs California's Metropolitan Planning Organizations to meet GHG emission reduction targets established by the California Air Resources Board through coordinated land use and transportation planning.
Subsequently, Senate Bill 97 (SB 97, 2009) created guidelines for analyzing GHG emissions in environmental documents required under the California Environmental Quality Act. Vehicle Miles of Travel are used as a proxy for greenhouse gases. The Bureau of Transportation Statistics defines VMT as a unit to measure vehicular travel made by individual vehicles. Each mile traveled is counted as one vehicle mile regardless of the number of persons in the vehicle. Total vehicle miles is the aggregated total mileage traveled by all individual vehicles.
That's a mouthful and what in the world does it have to do with real estate? I've said it before and I believe it to be true, most everything has a direct impact on real estate. Higher taxes impact real estate. Higher commodity prices impact real estate. The California Environmental Quality Act impacts real estate. School test scores impact real estate. The economic health of a community impacts real estate. Homelessness impacts real estate. Real estate does not exist in a bubble and is not free of the influence of all these other things.
VMT has been a serious discussion point in San Diego County for over a year now. As new neighborhoods are proposed, VMT is considered as seriously as water reclamation, housing density, and parcel setbacks and zoning. How does this affect real estate in Fallbrook?
California would like everyone to live close to work. SANDAG is currently proposing a new tax based on VMT that would provide funding for mass transit. Currently only 3% of San Diegans use public transportation. SANDAG's goal is to increase this number to 10%, which would still leave 90% of us using our vehicles to get to and from work, school, shopping, and recreation.
We have Amtrak, the Coaster, the Sprinter, and the Metrolink. Just get to one of the transit centers and use mass transit, but the fact is the numbers have gone down, not up, with all these mass transit options. People want their cars. They want flexibility. They want freedom to come and go as they need or please.
If you live rurally, in a town like Fallbrook, you are going to pay dearly for the right to drive anywhere. This proposed tax will hurt essential workers, middle- and lower-income people, and service providers the most. If you're retired, you might not think much of this, but think again. Even you will be taxed, so your fixed income will have one more item in the debit column. Suppose you purchased an electric car to help eliminate greenhouse gasses and avoid the escalating cost of gas. You did your part, but it is because of the decrease in gas powered vehicles that this tax is being proposed. This new tax does not include a reduction in the current state gas tax, it is in addition to that tax. If you drive a gas-powered vehicle, you will be double taxed, first to support mass transit through VMT and second to support infrastructure through gas taxes.
How will this impact real estate in Fallbrook? Any new tax reduces the expendable income a person has. Even though the amount you can qualify for in a mortgage is tied to your total housing expenditures, you, and I both know that there is only so much money in the pot and when the pot is empty or lower than you are comfortable with, you will tighten the purse strings and rethink your priorities.
This proposed new tax will impact the heart and soul of California. It will hurt people on fixed incomes. It will hurt our teachers, our nurses, and all service providers. It will cost more to have everything transported to our stores, which will mean higher food prices. Something will have to give.
Either people will choose to leave California, or they will choose to spend less on housing. If this happens, inventory will rise, and prices will fall. Others might choose to live in a place like Fallbrook, where they can buy a larger home on a larger parcel, and work from home and home school their children, which would increase Fallbrook's value. I guess it's a roll of the dice. At least, now you know what's coming down the road.
Kim Murphy can be reached at [email protected] or 760-415-9292 or at 130 N Main Avenue, in Fallbrook. Her broker license is #01229921, and she is on the board of directors for the California Association of Realtors.