One reason for the high cost of housing in California is overregulation • Hacker News Board

Re: One reason for the high cost of housing in California is overregulation

#71

Post by ac29 » Thu, Jul 04, 2019, 2:17 AM UTC

cardiffspaceman wrote: post #69

Within my neighborhood in California, there has been a steady pace of remodels which go through a vacant lot phase, rather than just adding on and renovating. How are such projects economic if regulations are having costly effects? I had to remove and replace a wall and also restucco the remaining walls. With the restuccoing, it was opportune to replace the windows. All this stuff had to comply with the latest codes…

The vacant lot stage, I assume, is due to the lengthy process of permitting. If you're referring to the same sort of "vacant lot" as I am, there is often a foundation and a single wall or so left so that it qualifies as a remodel as opposed to new construction (though in reality is effectively new construction). Presumably there is some regulatory and/or tax advantage to doing this.

In a lot of places in California, "how are such projects economic" goes beyond regulatory delays and their associated financial impacts. When you are spending $1M on a 1/4 acre property that you tear down and spend an additional $400k redeveloping, its certainly more than just regulatory costs making that so much more expensive than the vast majority of the US and the world.

Re: One reason for the high cost of housing in California is overregulation

#72

Post by exabrial » Thu, Jul 04, 2019, 1:53 PM UTC

Perfect example: https://www.greencarreports.com/news/1095076_ca-to-require-n...

As such these things are regressive against the poor, for which a electric car would be an extraordinary luxury, yet are required to implement it, else government thugs come to arrest you with guns in hand.

Re: One reason for the high cost of housing in California is overregulation

#73

Post by hackeraccount » Thu, Jul 04, 2019, 1:55 PM UTC

RickJWagner wrote: post #65

true_tuna wrote: post #32

Earlier quoted context omitted.

I’ve heard of the idea of baking expiation into any given law. Useful laws get renewed, useless ones get expunged.

That sounds dangerous to me. If the lawmakers overlook an important one (say, the law against deadly assault) for even a few days, it could be bad.

I assume these are regulations and not the criminal code. I think those are two different things.

Re: One reason for the high cost of housing in California is overregulation

#74

Post by OnlineCourage » Thu, Jul 04, 2019, 1:55 PM UTC

bwb wrote: post #25

I am curious, would you be supportive of a federal law that takes over zoning if housing prices are more than x above the median income in that area? IE, take control away from NIMBAs?

Absolutely not. Some regions have different weather, flood and earthquake liklihood than others.

Re: One reason for the high cost of housing in California is overregulation

#75

Post by hackeraccount » Thu, Jul 04, 2019, 1:57 PM UTC

dragonwriter wrote: post #61

realityman wrote: post #60

Earlier quoted context omitted.

California requires solar power on every new house. It's a huge cost. Most local governments also require off-street parking, which is a huge cost. The regulatory burden isn't just in planning and permitting.

> California requires solar power on every new house. No, it doesn't, though it will soon. > It's a huge cost. The estimates of $10-30k are under (to far under) 5% of the median home price (for all sales, not just new homes, which would drive the median much higher). It's obviously not a significant current cost driver, and it also won't be a big cost driver when the mandate actually applies next year.

They're going to require solar power on all new houses? That's insane.

Re: One reason for the high cost of housing in California is overregulation

#76

Post by coredog64 » Thu, Jul 04, 2019, 2:00 PM UTC

esmi wrote: post #35

adamredwoods wrote: post #13

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.

Regulation most certainly increases construction costs. Safety features will definitely increase cost. So does environmental compliance. I don't necessarily think those are bad things, but they definitely increase costs. From the article: "These energy rules reflect an important priority for Californians, but they contribute to staggering construction costs and, in turn, higher house prices. Affordable housing builde…

In practice, we’re trying for perfect over good. Let’s say I’m a low income family and I’m trying to buy a house. Adding 10% might price me out of the new market and into an older house. Yes, the goal was to give people more insight into recurring costs, but now you’ve pushed them into older stock that may have maintenance costs that are an order of magnitude higher than the electric bill.

Re: One reason for the high cost of housing in California is overregulation

#77

Post by hackeraccount » Thu, Jul 04, 2019, 2:02 PM UTC

kevingadd wrote: post #27

Regulations in California are generally tiresome but it's ridiculous to claim that regulation could be responsible for things like startup stock offerings making local rents double over the course of a few years. Those buildings are already constructed and if you live in them you can observe that no major remodelings or other updates happen during the time period where rents are skyrocketing. The rent boosts when sta…

Wait. Doesn't San Francisco have rent control?

Re: One reason for the high cost of housing in California is overregulation

#78

Post by lern_too_spel » Thu, Jul 04, 2019, 2:55 PM UTC

umeshunni wrote: post #11

jayd16 wrote: post #5

Earlier quoted context omitted.

Yeah, quote the guy who's arguably the most responsible for California's mental health and homelessness problems.

Yes, some guy who was governer 45 years ago is responsible for all of California's problems and not the 40+ years of bad left wing policies that followed it.

Left wing politics has had marginal effect on California relative to the huge destructive power of Prop 13. Its passage immediately led to the local governments needing to be subsidized by the state government and a massive transfer of wealth in the ensuing years from renters to landowners. That Prop 13 also tied the hands of the legislature in changing tax code led to most subsequent programs being funded by ballot initiatives that earmarked all funds for specific programs, even if those programs later became lower priority, and those ballot initiatives that were funded by bonds tied up the general fund to leave very little left over for your Boogeyman left wing politicians to affect.

Re: One reason for the high cost of housing in California is overregulation

#79

Post by m0llusk » Thu, Jul 04, 2019, 3:06 PM UTC

Most of the analysis of regulation in both the article and this discussion thread focuses on what is controlled and where the lines are drawn, but this is actually a small part of the experience of regulation. Because of the structure of environmental impact reports and reviews proposals for development are open ended with all manner of input being considered for a period of time that is difficult to even estimate. Changing the process to be more reasonable and have expected time frames for resolution of conflicts one way or the other would greatly improve the experience of development. As it is estimating the time, cost, and risk of failure for development projects is nearly impossible. This unbounded process is a huge barrier no matter what lines get drawn along the way.

Re: One reason for the high cost of housing in California is overregulation

#80

Post by dragonwriter » Thu, Jul 04, 2019, 3:55 PM UTC

hackeraccount wrote: post #75

dragonwriter wrote: post #61

Earlier quoted context omitted.

> California requires solar power on every new house. No, it doesn't, though it will soon. > It's a huge cost. The estimates of $10-30k are under (to far under) 5% of the median home price (for all sales, not just new homes, which would drive the median much higher). It's obviously not a significant current cost driver, and it also won't be a big cost driver when the mandate actually applies next year.

They're going to require solar power on all new houses? That's insane.

> They're going to require solar power on all new houses?

Yes, as of Jan 1, 2020.

> That's insane.

It's $10-30k of upfront cost for $19-$60k of 30 years savings (and the same sources estimating the higher cost figure estimate the higher savings figure), and it greatly advances California's renewable share of generation, and solar output peaks correlate well with aggregate demand peaks in CA.

As public policy solutions go, it is eminently sensible.