Supervisors vote to end PACE home-improvement loan program
BAKERSFIELD, Calif. (KBAK/KBFX) —
Kern County supervisors on Tuesday voted 4-1 to begin pulling out of the PACE home improvement loan program.
The board heard arguments for hours from Realtors seeking to end the program and contractors hoping to save it.
The Property Assessed Clean Energy initiative allows for homeowners to finance energy-efficient home upgrades like new windows, air-conditioning units or solar panels by placing a tax lien on their property.
The debt for the purchase is tied to the property and not the buyer, thereby making the county assessor a debt-collector.
Billed by contractors as a good option for some consumers to make urgent repairs without any up-front cost, realtors worry the growing number of liens on homes will have a chilling effect on the local real estate market.
Eyewitness News reported extensively on the pros and cons of the PACE program this spring, finding consumers who'd been at best confused and at worst misled about the terms of their loans.
The program spurred a boom in local construction. Don Lanier, of Northwest Exteriors, said he was able to nearly triple his workforce. Those workers worry their jobs may be in jeopardy if local government sunsets the program.
"There doesn't need to be a lot of extra regulations. This is a free market. This is the United States," he said. "People and homeowners should have the right to make their own decisions about which financing fits best for them."
Plenty of happy customers spoke in support of the program before the supervisors, saying that PACE isn't right for everyone, but it's a terrific alternative to a bank loan for those in a position to take on the payments. Ending the program, they said, would punish everyone on account of the relatively few people who had poor outcomes.
But PACE's critics likened the loans to the subprime mortgage crisis several years ago, noting that loans are authorized for people with equity in their homes, but who have little to no income to support long term payments.
That seemed to strike a chord with Supervisor Mick Gleason, who voted to end it.
"We're enabling people with poor credit histories to purchase something that they otherwise could not afford," he said shortly before the vote.
Supervisor Leticia Perez cast the minority vote to keep PACE.
The Bakersfield City Council will provide the next arena for the ongoing feud between realtors and contractors, who each feel their incomes are being threatened by the other.