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"If it moves, tax it. If it keeps on moving, regulate it. If it stops moving, subsidize it." - Ronald Reagan Looks like we're well along that curve for housing in CA.
Yeah, quote the guy who's arguably the most responsible for California's mental health and homelessness problems.
"If it moves, tax it. If it keeps on moving, regulate it. If it stops moving, subsidize it." - Ronald Reagan Looks like we're well along that curve for housing in CA.
California's property tax is less than half of that of Texas, New York, Illinois, New Jersey, Pennsylvania, and Ohio. Combine that with the fact that CA has prop 13, and one of the highest GDP per capita, and... Does anyone really think it's the regulation that's making prices high?? Sure, they're not helping. But high incomes and low taxes are a recipe for high prices. The only other state with high incomes and this…
The next step is obvious. The government must come to the rescue and subsidize housing.
This might bite a little harder if you could look in any direction in Los Angeles and not see new construction. The current amount of space occupied by low density housing is something we could improve on but its just that. Occupied! Hopefully all this commercial space rezoned for multi-purpose use (shops on the ground floor, apartments or offices above) will free up some of the low density real-estate but its not ov…
"If it moves, tax it. If it keeps on moving, regulate it. If it stops moving, subsidize it." - Ronald Reagan Looks like we're well along that curve for housing in CA.
California's property tax is less than half of that of Texas, New York, Illinois, New Jersey, Pennsylvania, and Ohio. Combine that with the fact that CA has prop 13, and one of the highest GDP per capita, and... Does anyone really think it's the regulation that's making prices high?? Sure, they're not helping. But high incomes and low taxes are a recipe for high prices. The only other state with high incomes and this…
In contrast, low property taxes (and especially Prop 13 which decouples taxes from property values) causes homeowners to focus on building wealth through the appreciation of home values, which encourages NIMBY behavior.
I personally feel regulation slows down new construction, but doesn't necessarily increase costs. Dilapidated houses still go for large sums, so I suspect land costs to be a major reason as well. Additionally, lack of contractors is becoming an issue(demand increases, costs increases) with many of them working indefinitely over in fire-ravaged areas like Paradise or Santa Rosa.
Counting words and claiming there are too many isn't very convincing, especially since they admit that "some" of the regulations make sense. Could they maybe identify one regulation that imposes a significant cost burden but doesn't have a clear benefit?
I personally feel regulation slows down new construction, but doesn't necessarily increase costs. Dilapidated houses still go for large sums, so I suspect land costs to be a major reason as well. Additionally, lack of contractors is becoming an issue(demand increases, costs increases) with many of them working indefinitely over in fire-ravaged areas like Paradise or Santa Rosa.
As you say, labor seems like a much more significant factor. And restrictive zoning and NIMBYism even more so. But restrictive zoning is a sensitive topic for conservatives. Conservatives seem to be against regulation except when it's used to preserve the "character" of existing neighborhoods--not to be confused with historic preservation, which is bad restrictive zoning. Direct regulation is a more convenient target, ideologically. Likewise, I often hear conservatives lament the cost of labor but they're walking on glass by suggesting that working-class voters should be paid less.
To be fair, progressives make the same mistake of assuming new housing should be built for the poor and working class. And NIMBYism knows no bounds. Indeed, it was progressive efforts to "empower" communities that opened the doors for NIMBY obstructionism. It's difficult to devise a political mechanism that won't ultimately benefit the rich and powerful more than the poor.
I personally feel regulation slows down new construction, but doesn't necessarily increase costs. Dilapidated houses still go for large sums, so I suspect land costs to be a major reason as well. Additionally, lack of contractors is becoming an issue(demand increases, costs increases) with many of them working indefinitely over in fire-ravaged areas like Paradise or Santa Rosa.
Imagine you buy a piece of land for $100,000 with the intention of developing it. Until the property is developed and sold, you have numerous carrying costs (taxes, insurance, debt payments, etc.). In California, your annual carrying costs may easily be $8,000-$10,000 per $100,000.
If it takes you one year to develop the property, you need to sell the property for $108,000 just to cover the carrying costs (i.e. this doesn't account for the actual construction costs or selling costs). If it takes you two years to develop the property, you need to sell the property for $116,000 just to cover the carrying costs.
Keep in mind, the time to develop isn't idle time where the developer incurs only carrying costs. It's endless drafts, consultations, and meetings. It requires actual money to be paid not only to the city, county, and state, but to architects and planners and contractors to comply with increasingly byzantine and mercurial requirements. The longer this goes on, the more money a developer has to spend.
The longer a developer is forced to carry the property, the more they need to charge to recoup their investment. Since no one is going to develop property without anticipated profit, this means prices necessarily rise.
I personally feel regulation slows down new construction, but doesn't necessarily increase costs. Dilapidated houses still go for large sums, so I suspect land costs to be a major reason as well. Additionally, lack of contractors is becoming an issue(demand increases, costs increases) with many of them working indefinitely over in fire-ravaged areas like Paradise or Santa Rosa.
If you slow down construction, you are inherently making it more expensive.