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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

#61

Post by fortes »

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…

$5k / month definitely does not get you a nice 4 bedroom in Palo Alto. Maybe in East Palo Alto, but that is a very different place in terms of quality of life, safety, and schools.

Edit: I decided to check, and there is one place in Palo Alto right now with 4 bedrooms at that price https://sfbay.craigslist.org/search/pen/apa?nh=83&max_price=...

From personal experience, as someone who was priced out of Palo Alto this year, it is rare to see a place at that price point in Palo Alto proper, and they tend to be quite run down. The one place available right now is actually in a good location and doesn't look too bad inside, so that's not a bad deal for the location.

On the other hand, you can get a great place in Seattle with views for over $1000 cheaper: https://seattle.craigslist.org/see/apa/5723972635.html

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

#62

Post by bufordsharkley »

jhanschoo wrote: post #58
maerF0x0 wrote: post #13

Seems to be the same old story we've long known. Government interference in markets leads to distortions. Yet year after year we act surprised. And when it comes time to setting up a government, we vote for the person who promises to spend others' money on our pet project.

I'm tired of hearing the ideological position that government interference is absolutely bad. I live in a city-state where government housing and policies and strict zoning at once makes housing affordable for the middle and lower class insulated from fluctuating rents, and protects public spaces from overdevelopment in a land-scarce island.

I'm curious to here more about how this policy works.

I would be skeptical that the claim that a land-scarce island should be wary of overdevelopment-- I would think sprawl would be more dangerous (and density would be welcomed).

In practice, strict zoning tends to create sprawl-- when density is outlawed, the displaced people need to live somewhere... and thus the footprint of cities grows wider and wider.

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

#63

Post by ScottBurson »

lindenksv1 wrote: post #52
ScottBurson wrote: post #41

Earlier quoted context omitted.

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

We're moving to Santa Cruz because we wanted to live in a walkable area. If you travel up and down the peninsula, any house near the walkable downtown area is going to be $2M+. Yeah, sure, you can buy for less and have to travel by car absolutely everywhere. But why spend $1.5 to live in a dead cul de sac when you can spend the same money to live in a lively walkable area near the beach? If you're going to hang an al…

You're preaching to the choir :-) I lived in Santa Cruz for 13 years, and I would love to go back -- except that commuting to Sunnyvale would be hell.

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

#64

Post by StanislavPetrov »

hkmurakami wrote: post #53
StanislavPetrov wrote: post #26

Earlier quoted context omitted.

>It seems that we made a pact with the devil by positioning housing as an investment asset. That was certainly a mistake, but the much larger mistake was made (and continues to be made) by the FED (and other central banks at the FED's insistence). FED efforts to prop up the housing and equities markets through QEinfinity, Operation Twist, the FOMC, and countless other FED mechanisms designed to prop up markets (and o…

Re:AAPL There's a market for $AAPL shares at $100+. Some people are happy paying this price. Some people think this is too high. There's similarly a market for Palo alto houses at $2.5m. Some people are happy paying this price. Some people think this is too high. When someone comes along asking AAPL to sell them shares of $AAPL for $65 when there's a market for them at $100+, you as the holder of other analogous $AAP…

You're missing the point. When there isn't a market for $AAPL shares at $100, but the government steps in to offer $100 to prop up the price of $AAPL stock, there is a problem. That is the issue with housing prices, stocks, bonds, debt, and everything else on the world stage. This central bank interference destroys price discovery and disrupts prices everywhere, including Palo Alto, even if they aren't directing bidding on homes there.

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

#65

Post by toomuchtodo »

lindenksv1 wrote: post #59
toomuchtodo wrote: post #11

Earlier quoted context omitted.

Or move the jobs out of ridiculously high COL areas? An area of land has a carrying capacity dictated by the will of the people who live there through their votes. Why fight it when you can simply move work elsewhere?

Industries are successful when they cluster. It's why you see entertainment in LA, insurance in Chicago, biotech in North Carolina, banks in NY, and think tanks and defense contractors in DC. As we move away from manufacturing and into a knowledge economy, being able to quickly exchange and improve on ideas with other people becomes more and more valuable. It's why the entire world is seeing a massive movement toward…

> Do you think that calling your mom is the same thing as visiting her in person? Do you think you could be a good parent via Skype? Of course not. So why do you think that business relationships are any different?

Because familial relationships are not transactional in the same way that business relationships are?

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

#66

Post by Animats »

Palo Alto has the problem that people don't leave.

It used to be a college town. University Avenue had four bookstores. But then people stopped moving away. About a decade ago, Palo Alto did a survey of residents to find out how long they intended to live where they were. Most said they intended to live there for the rest of their life. This implies Palo Alto becoming a retirement community.

University Avenue now has zero bookstores.

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

#67

Post by raldi »

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…

> For now, think of turning the Peninsula into tall buildings, concrete and asphalt.

No, the opposite. Urban density reduces sprawl. The more people you can accommodate in the city core, the less you need to spoil the surrounding countryside.

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

#68

Post by moultano »

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…

>Many cities near Palo Alto have houses at a reasonable price

LOL

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

#69

Post by lindenksv1 »

will_brown wrote: post #37

While it is fine to call out the City Council, I am surprised there wasn't an acknowledgment that the City Council is a reflection of the will of the people in the City. If it were really an issue to the community they would elect new Council persons. Since the majority of the stakeholders on this issue likely can't vote to change the Council because they don't live in the City, I would recommend a boycott. One thing…

The problem with the "will of the people" is outlined here pretty well: https://www.washingtonpost.com/news/wonk/wp/2016/08/10/why-c...

A small minority of NIMBY homeowners can capture and control a city council fairly easily. When you are well off (and are retired or independently wealthy and don't work...) and you're in a town of 65,000, that really means there are maybe at most 1000 people actually going to City Council and paying any attention to it. That means that if you've lived there for 30 years, you know all of them and your networks are very deep. So, a small minority who has time and resources can effect a lot. And meanwhile young people, working people, people with young kids, people working 2-3 jobs, etc they're not paying attention, they don't have those deep networks, and frankly they only show up to vote in presidential elections. Plus, people who like how things are going, don't really dig into this stuff and have no reason to think anything is wrong. If you think Palo Alto "is on fire" and "going to hell in a hand basket" because you have to drive by a new apartment building, then you show up to council and you show up to vote. But if you have no issue with new buildings, you've got no reason to show up and you're far less concerned with voting. So, problem #1 is that people who are most affected are not paying attention or do not know that they should be paying attention.

Problem #2 is as outlined in the article above. When every city council is captured by existing homeowners, no town decides to add housing. Every town prefers to add jobs that bring in tax revenues but thinks they have little to gain from allowing more housing, because of the attendant infrastructure costs (like new schools). And so collectively, they make choices that drive up the cost of housing, drive people away from jobs centers, create homelessness, and which contribute to income inequality as people spend more and more money on housing because of an artificial constraint on housing supply. Added together, this stuff hurts our economy and it's killing off the middle class.

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

#70

Post by youngButEager »

lindenksv1 wrote: post #55
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…

There is no free market in housing. Supply is very tightly constrained by the city via a system of very stringent zoning (3 stories max most of the city, only 3% of the city is even zone for multifamily housing) and taxes. What you see happening in the Bay Area isn't the result of the laws of supply and demand, it's the result of the laws passed by city councils. There's no developer in the world who wouldn't love to…

It does not matter, the 'supply being constrained' point.

Let's say that Palo Alto allows high-density housing. Will that solve the housing supply issue?

No. You missed the point about the east coast having been settled first in the USA. And the point about LA.

Both of those regions allow high density housing. Would Palo Alto housing drop in price?

NO. The only way to solve Palo Alto's housing problem is -- MAKE IT NO LONGER A DESTINATION. Turn it into a non-destination locale, like -- say -- Stockton. Or Vallejo. Or Compton. Or Watts. Or Detroit.

The desire to live in 'destination cities' like back east, or LA, or Palo Alto is UNQUENCHABLE. It doesn't matter how much supply there is -- IT'S A DESTINATION.

People shun Stockton -- at least compared to Palo Alto. Stockton has cheap housing. Many fewer people want to live there.

If Palo Alto could suddenly pop up a few skyscrapers of apartments and condos, that supply would be taken up quickly. The same is true for San Francisco.

The desire to live in a destination city is like the desire to date a hot young gal. Unquenchable. If one hot young gal moved to Man Jose, the sausage fest of the South Bay, and ran a short TV ad, "I'm ready for dates and I won't be picky, just be nice" guys would come from outside San Jose to get access to that 'destination.'

Stockton is a plain, unattractive object of desire. Palo Alto is a gorgeous, extremely attractive object of desire. Adding more housing to beautiful Palo Alto will increase the number of eligible suitors dramatically -- and the added supply will not save this crybaby lawyer at all.

>"There is no free market in housing."

Not true. Go visit large geographic areas that are not 'destination cities' like Stockton; Modesto; Vallejo.

The entire state of Wyoming has a total population of only 564,000 people. Wyoming has an extremely free market in housing.

And there are free markets in housing in Destination Cities too. The City leadership is smart enough to know that a 'Destination City' has an unquenchable demand and faces a choice of:

- median home price of $2,700,000 with current population

- median home price of $2,700,000 with (current population + all those new arrivals who will quickly buy any new housing)

City leadership knows that adding supply will NOT lower housing prices. It will just make Palo Alto more crowded and grouchy.

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