ECONOMY WATCH : Home Life

California’s housing industry, which desperately needs good news, should be able to find some in President Clinton’s controversial, narrowly approved budget.

Two items should help increase the volume of low-income housing and make home ownership more affordable for first-time buyers. The budget provides for the permanent extension of both the low-income housing credit and mortgage revenue bonds that states use to raise money for housing programs. Both had expired in June, 1992.

The low-income housing credit, one of California’s three major sources of federal funding for housing, is expected to help boost construction of low-income rentals, for which there is a continuing market, particularly in Los Angeles and other large cities. In California between 1986 and 1992 the low-income housing credit helped create 35,000 new units for low- and moderate-income families.

The extension of mortgage revenue bonds will enable the California Housing Finance Agency to fund a five-year, $4.6-billion program that includes a loan program for first-time home buyers. Without the bonds, it would be impossible to fund that program, expected to create 50,000 jobs and more than 40,000 affordable homes and apartments in the state over five years. Mortgage revenue bonds have helped 50,000 first-time buyers since 1975, when the program began.

Reviving housing is crucial to reviving the state’s economy. The Clinton budget, though no panacea for the construction industry, should at least be a fresh breeze for affordable housing.