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The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

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Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#41

Post by ScottBurson »

fhrui wrote: post #31

I found these whining hypocritical and snobbish. I can't afford a house in Palo Alto even if I work there. I don't complain about it just like I don't complain about not being able to purchase a luxury car. I don't expect the people who CAN afford these things to just lower the price and give them to me. Many cities near Palo Alto have houses at a reasonable price, East Palo Alto, East Menlo Park, Mountain View, Redw…

Your theory doesn't explain why she's moving to Santa Cruz -- the schools are nothing special there.

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#42

Post by WWKong »

hkmurakami wrote: post #3

It seems that we made a pact with the devil by positioning housing as an investment asset. By doing so, we've encouraged people to commit a very large fraction of their net worth into a rather illiquid asset, tying their financial fates to the future assessment of that asset. As a result, protecting the price and appreciation of this asset has come to overshadow the other crucial roles that housing plays in our socie…

Well put. Most discussions around here take a simplistic position, "build more to drive prices down". And then wonder why it doesn't happen when the solution is so obvious. Because it is not only about new buyers but also about folks who have invested everything they have into a market that was already in place before they invested.

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#43

Post by bufordsharkley »

fhrui wrote: post #31

I found these whining hypocritical and snobbish. I can't afford a house in Palo Alto even if I work there. I don't complain about it just like I don't complain about not being able to purchase a luxury car. I don't expect the people who CAN afford these things to just lower the price and give them to me. Many cities near Palo Alto have houses at a reasonable price, East Palo Alto, East Menlo Park, Mountain View, Redw…

1) Exclusionary zoning is a problem-- it's keeping those out except those who are fortunate (rich or lucky), and not paying for the privilege. It's a country club atmosphere, but with Prop 13, without the requisite fees (which should go back to the community at large)

2) "Many cities near Palo Alto have houses at a reasonable price, East Palo Alto, East Menlo Park, Mountain View, Redwood City"

Their houses sell for less than Palo Alto/Atherton, but they're far from reasonable. An artificial scarcity of land has driven prices up everywhere.

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#44

Post by bufordsharkley »

youngButEager wrote: post #39

The east coast of the USA was settled first, recall. What did they do back east to 'solve' this problem of "we're running out of space"? They increased the density of occupants per unit of land -- they built UPWARD. That will have to happen here too. It's already happened in LA. There will always be crybabies like this attorney during the growing pains of a popular 'destination city.' For now, think of turning the Pe…

What you're missing here is that the market delivers rent to the holders of a natural resource (land) far in excess to its marginal product-- which is to say economic rent.

Landowners in the Bay Area are rentiers, and unless we enact policy to reverse this, we'll never have a competitive market in housing.

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#45

Post by refurb »

vtange wrote: post #5
hkmurakami wrote: post #3

It seems that we made a pact with the devil by positioning housing as an investment asset. By doing so, we've encouraged people to commit a very large fraction of their net worth into a rather illiquid asset, tying their financial fates to the future assessment of that asset. As a result, protecting the price and appreciation of this asset has come to overshadow the other crucial roles that housing plays in our socie…

It's a double whammy when you also consider that property taxes are generally based on real estate value. City and local governments are dependent on that income and have little incentive to see real estate values (and thus tax) go down.

But tax rates generally adjust for increasing housing prices. In my old hometown, when housing prices went up 20% in one year, tax rates decreased by ~15%, so overall the increase was about inflation. Otherwise you'd see city budgets double in only a few years in really hot markets.

Of course this doesn't work in California with Prop 13, but I've seen it in other areas.

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#46

Post by lindenksv1 »

dekhn wrote: post #36
mbreese wrote: post #7

Earlier quoted context omitted.

The $150,000 number is the cost of the mortgage needed to buy a home the size of the one they rented in Palo Alto [1]. The breakdown was that they rented the home with another couple for $6200/mo. If they wanted to buy a similar home, it would cost ~ $2.7M, thus the $12.5k/mo mortgage. They were already renting a place in Palo Alto at ~ $3100/mo. Their problem was that they wanted to start a family and needed more sp…

So, the argument is based on her insisting that she had to buy a house in Palo Alto. But renting a place large enough would have been much cheaper than that $150,000: $5k/month gets you a nice 4 bedroom. I don't think her math adds up. She's just insisting that she has to buy, and it has to be in Palo Alto. Neither of those are truly requirements for her, so the $150K quote is specious. EDIT: I acknowledge $5k is not…

Hey there. I'm Kate Downing. I don't insist on living in Palo Alto at all. See? I'm moving. But what I'm trying to say is that we have a serious problem because people who are integral to our community who SHOULDN'T move can't afford it. You can tell lawyers and engineers to go get lost and they don't HAVE to buy a house in Palo Alto. But are you also going to tell our police, firemen, teachers, city staff, nurses and EMTs to get lost, too? They all make less than we do. What happens when they follow your advice?

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#47

Post by ojbyrne »

twblalock wrote: post #12
ChuckMcM wrote: post #4

"Downing and her husband, an attorney and programmer, respectively, say they simply could not afford to pay almost $150,000 per year for housing alone while starting a family in Palo Alto." It's interesting the difference a couple of miles make. $150,000 per year is $12,500 a month. The most expensive house for rent in East Palo Alto (3 miles away) is $6,000 (half that) and there are many choices under $4,000 per mon…

For those who aren't familiar with the Bay Area: East Palo Alto is a high-crime city. It is not the eastern part of the city of Palo Alto -- it is not even in the same county. It has such a high rate of crime that there were no grocery stores there for many years, because the shoplifting put them out of business. There are frequent gang-related shootings. And yet, it still costs more to live there than it does in mos…

East Palo Alto's crime rate has dropped significantly in recent years and is rapidly gentrifying.

http://www.paloaltoonline.com/news/2015/10/12/report-violent...

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#48

Post by davidw »

Relevant:

http://marginalrevolution.com/marginalrevolution/2016/08/col...

http://marginalrevolution.com/marginalrevolution/2016/08/lai...

https://www.washingtonpost.com/news/wonk/wp/2016/08/10/why-c...

http://www.nytimes.com/2016/07/04/business/how-anti-growth-s...

http://www.bloomberg.com/view/articles/2016-07-27/zoning-has...

Get involved:

http://sfyimby.com

http://www.strongtowns.org

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#49

Post by davidw »

ermterm wrote: post #35

As much as I appreciate all these articles expounding the plethora of issues stemming from housing in the Bay Area, I can't help but feel thoroughly discouraged. It seems that despite an abundance of chatter, we'll never see any change. If things were going to be fundamentally different, any time soon, we'd see indications of that. Instead it's just articles. Articles, on articles, on articles.

The sfyimby people are quite active - they go to local meetings, get out the vote and otherwise engage with the political process.

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#50

Post by tachyonbeam »

vadym909 wrote: post #29

I'm surprised that none of the YCs startups have tried to solve this problem. People really want 'affordable housing' and YC's motto to its startups is to 'make something people want'- so what gives?

Housing is not just an app...

I'd like to see someone mass produce stackable prefabricated units out of pieces and assemble them into multi-floor apartment buildings, increasing the number of aparments on offer very fast and driving costs down. Unfortunately, I think the problem here comes down to regulations. It's hard to acquire land. Much of the bay area has laws preventing you from building new housing much higher than a few floors. The property taxes are very high, which also makes it difficult to offer low cost housing.

My general impresion is that the bay area does not want to grow... Or at least, much of the existing homeowners, the NIMBY crowd, don't want it to grow. They want tech people to get out and for things to go back to how they were in the 1980s, while maintaining the price of their own homes as high as possible.

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