Gov. Newsom proposes $331 million for housing legal assistance

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LOS ANGELES — California Gov. Gavin Newsom said Wednesday he wants to spend $331 million from a settlement with mortgage lenders on legal aid for homeowners and renters.

"The middle class, and those that aspire to get in it, are being slammed because we have been unable to produce enough housing, to prevent evictions and foreclosures," Newsom said as he presented his plan at a legal aid clinic.

Newsom's proposal repurposes most of California's share of a 2012 settlement between states and five large lenders related to the 2008 mortgage crisis. He still needs approval from the Legislature.

Lawmakers had previously tried to put the money toward paying back housing bonds and other purposes in the state's general fund budget. But courts repeatedly said the state had to spend the money as it was intended on housing assistance and consumer protection programs.

Newsom's plan aims to put the state in line with the court's decision by giving the money to nonprofits that help Californians facing foreclosure or evictions.

California is in the midst of a housing crisis, with rising rents and far fewer homes available than are needed for the state's nearly 40 million residents. Newsom said he wants to keep a rent control bill off the ballot in 2020.

Instead, he hopes lawmakers send him a bill that would cap maximum rent increases. The bill has been working its way through the Legislature despite opposition from the California Association of Realtors.

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