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California’s affordable housing problem is really a national one

nytimes.com

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Re: California’s affordable housing problem is really a national one

#131

Post by opportune »

nutshell89 wrote: post #100

The problem is that not only is there zero appetite to phase out housing-as-investment boosting policies like the mortgage interest deduction, imputed rent exemption, and cap gains exemption at the federal level, en vogue affordable housing strategies have focused on keeping interest rates low, providing 1st time home-buyer tax credits, and strengthening fair lending regulations. The U.S.(western nations with high ho…

I think removing many of these housing discounts would only partially impact housing costs, since these affect the majority of buyers and most home purchasing decisions are made on the basis of the monthly payment. That is, after removing some of these policies, people would probably still end up paying the same monthly payment, just with lower nominal housing costs.

The bigger issue to me is the constriction of supply. The suburban development pattern in many areas is simply unable to support the densities needed to manage regional issues well, causing traffic issues and forcing people to live very far from their places of work. I also have more unpopular opinions that there is too much "protected" land in areas like the bay area (specifically in the North Bay). Regardless of that, California needs to do better to fix the supply problem, because these housing policy failures are slowly beginning to affect more and more areas outside of just the bay area and SoCal, and the measures passed so far just don't cut it.

Also, prop 13 has essentially removed much of the "carrying costs" which penalize undeveloped land usage (prop 13 isn't the only thing here, IIRC there are also lots of state/federal tax deductions you can get from not using land, oddly enough). And the low property tax rates across the board really penalize young high earners since the low taxes are made up for with income/sales taxes.

Re: California’s affordable housing problem is really a national one

#132

Post by KingMachiavelli »

sokoloff wrote: post #8

I feel like I got served an appetizer and a small dessert, with no main course in between. California has a housing crisis in some cities. Californians are moving out of those cities. The cities that they're moving into are experiencing an increase in demand (directly restating the previous). That's pushing up prices (not shocking), which is preventing some people with less money from outbidding people with more mone…

> Single Family Zoning

It is bad and yet is one of the only housing types that satisfies a lot of needs.

Multi-unit housing has the following list of annoyances:

1. Far more available to rent than to own. Some states such as CO have some weird insurance related laws that makes selling condos more of a liability than leasing apartments.

2. Often not cheaper on a sqft basis so you are paying more for less.

3. If it is for sale, there is often a hefty monthly HOA or Condo fee that increases with inflation/time.

4. Small parking lots*

5. Often up a few stories which make even moving groceries a hassle and moving furniture a real pain.

6. Noise from neighbors and rules/limitations when you can do noise generating things.

7. No garage/workshop area means repairing bikes and cars is a real hassle or you are paying someone else a lot of money to do it for you.

8. Dramatically less privacy and legal rights as far as what you are allowed to do to your property.

9. Almost always closer to roads and other noise producing things.

10. Neighbors are a far greater presence/annoyance in your life than even just living in the suburb. This has the added effect of reinforcing affluence/poor areas; buying a house in a poor/bad area is not nearly as risky as living in an apartment in a poor/bad area.

Really the only advantage of living in higher density housing is the access to public transport, city centers, and the lack of maintenance you have to do to maintain the property. The good news is that a lot of people don't mind the above annoyances so building more high density housing has the benefit of making every type of housing cheaper. Its also possible that in large enough cities, apartments can be found larger & more noise insulated than in suburb/low density areas (at least I sure hope so).

Essentially, does a single family home replacement exist? Town-homes are pretty close to satisfying the above list and are a lot more dense than SFH but are they dense enough to solve the scarcity problem?

* Convincing those who can afford vehicles to get rid of them seems really difficult. e.g Anyone know how people travel for ski trips in Europe? I really can't imagine using American public transport when I need to transport luggage. Sure flying and trains are OK for traveling large distances but buses and local rail systems are difficult to use with luggage. It would be a comical attempt for a family of 4 to transport themselves & their stuff on a local bus yet an SUV makes this an (bi)weekly occurrence for people near ski resorts.

Re: California’s affordable housing problem is really a national one

#133

Post by nutshell89 »

mjevans wrote: post #72

Renting sucks. There's no stability, the expectation that you'll be priced out of a place, and none of the money or time you invest in anything there is truly yours. 'Single family' dwellings tend to have a small bit of yard space (not directly a plus for me), an air-gap with other units that helps with some noise abatement, and sometimes a choice of utilities (like Internet). There's room to park the nomad-mobile (t…

Sort of a counterpoint to renting vs. owning housing, I've rented for the last 8 years. I don't have to worry about the constant home-ownership surprises my parents have had to deal with (renovations, pests, upkeep), I've been able to move to improve my commute with each job change, and I've made friends with each successive move.

I have given up stability, but the price to rent ratio in my city points far in favor towards renting, and I've mostly been able to invest the income that would have gone towards a mortgage in the stock market.

Edit: I've moved 5 times in the last 8 years not including a temporary move back to my parents' during the pandemic.

Re: California’s affordable housing problem is really a national one

#134

Post by Mountain_Skies »

wonder_er wrote: post #109
davidw wrote: post #102

Earlier quoted context omitted.

BTW, for people looking for other examples of how to grow, who might not like the idea of Houston's sprawl, I've always liked this article: https://www.sightline.org/2017/09/21/yes-you-can-build-your-...

That is a lovely article! Thanks for sharing. I feel like the US would be better off looking at cities around the world that are pleasent, and pattern-matching off of that. Vienna is beautiful. We should do more of what Vienna does. Clearly tweaking the US's "process" is just moving deck chairs on the titanic.

I've never been to Vienna so I can't speak to it but my experience in traveling around the world is that many cities have incredible central cities but also have sprawling medium to high density suburbs that everyone turns a blind eye to. The low density automobile focused suburbs of North America might not exist around those cities but the denser suburbs still have poor livability, especially compared to the central cities they surround.

Re: California’s affordable housing problem is really a national one

#135

Post by jeffbee »

lotsofpulp wrote: post #128
jeffbee wrote: post #126

Earlier quoted context omitted.

It doesn't sound like you've ever been to California at all.

I would like to be educated if there's something I'm missing. Is there a legal maneuver in CA that can prevent people from using their real estate for whatever it's zoned for, excluding frivolous lawsuits?

Yes, many jurisdictions in California require city permits for demolition and the process for getting those permits is by no means guaranteed. In my city after you apply for a permit you have to post public notice for 90 days so your nosy neighbors have a chance to go to the "landmarks preservation commission" to argue that your dilapidated shack in which nobody has lived for 50 years is, in fact, a priceless treasure and an irreplaceable piece of the city's identity, an event for which you'll need to hire an expensive land use attorney, a historian, and a forensic architect. Assuming you miraculously get through that part of the process, it certainly is by no means assured that you'd get a permit to build another home because the development standards are written in such a way that "by right" permits don't exist. You need a use permit from the city for everything, and for that you'll need to go through more public hearings at the zoning adjustments board and the design review committee. Meanwhile, you and your lawyers and architects will probably have to appear again before the full city council multiple times because each of the LPC, ZAB, and DRC decisions can be appealed to the full council by anyone, even if they don't live in the city.

Re: California’s affordable housing problem is really a national one

#136

Post by gonehome »

jeffbee wrote: post #119
gonehome wrote: post #59

Earlier quoted context omitted.

A ratio of new housing vs. new population. You can expand sprawl via single family homes and still not build nearly enough housing to meet population growth requirements. You can have a lot more population and still build little. It just forces people to live in shared housing with roommates at very expensive rents. I'm not arguing that you're wrong about Houston - maybe they did build enough. I'm just saying that po…

Here you go: new housing units per 1000s of new population for Houston MSA, 2000-present. https://fred.stlouisfed.org/graph/?g=B6Yd I exist to serve.

That's a cool site, I made a graph that I think illustrates my point more clearly: https://fred.stlouisfed.org/graph/?g=B6ZP

It's the change in population vs. the change in new housing with a separate line for each.

It's not super easy to understand because the population change is in thousands of people and housing is just in individual units, but I think it's clear from the graph (if I'm reading it correctly) that Houston is not building enough to meet demand. When you mouse over you can see the amount of new people and compare it to the amount of new housing. There's a lot more new people than new housing.

[Edit]: I found an even cooler dataset which I added to the above graph, https://fred.stlouisfed.org/graph/?g=B72x - it doesn't go back as far, but it shows available housing inventory which is a more relevant metric (and it's going down). I tried adding median price too, but it made the graph hard to read.

Basically, in a city not meeting demand I'd expect to see the following:

- Prices increasing faster than inflation

- Population increasing faster than new housing

- Availability of housing going down (supply constraints which cause prices to go up)

How bad the situation is depends on the above variables, but generally if you don't build enough to meet demand things get worse. That is true in a worst-in-the-world way in the bay area, but also appears to be true most places due to bad incentives - people who already bought in benefit (or at least think they benefit) from restricting supply.

Re: California’s affordable housing problem is really a national one

#137

Post by jandrese »

spamizbad wrote: post #6
slowmovintarget wrote: post #3

Thesis of the article: Californians are fleeing California and causing the same housing pressure in the spots they flee to. The real question is whether these other locations can avoid the high-density housing NIMBY response that became entrenched in California. It isn't just a matter of income disparity, which the article pivots to. It's also a matter of density and demand.

The challenge you have is that people view housing as an investment . Americans expect their home values to keep pace with inflation. And because housing values are so expensive, there's a tremendous amount of psychological pressure to "preserve" what they've purchased beyond their own property line (eg: "Neighborhood character"). For these reason, they're going to oppose any new supply entering the market. The only…

It's really impossible to not view your house as an investment when you've been paying for it for 30 years and have hundreds of thousands of dollars tied up in it.

This goes double if your plan is to work till retirement, then sell the house and move to someplace more laid back.

So really the local government needs to be willing to tell people to pound sand when they hold up new construction. But since the local government is made up of those same people that's not going to happen.

It is interesting watching movies and TV just how often the "evil developer" trope appears. Always trying to buy the almost-failed gym/ski slope/TV station/etc... until the plucky underdogs win the contest to save their small business. Developers are never the good guys. They're always the evil gentrifiers who want to let hundreds of families invade the quaint little neighborhood with their high rise eyesore.

Re: California’s affordable housing problem is really a national one

#138

Post by jandrese »

lazide wrote: post #101
rhino369 wrote: post #21

Earlier quoted context omitted.

In California, the only reason people can oppose new projects is because the government enables them to have a say in someone else's property. So you don't have to force development, but you do have to remove NIMBY's ability to veto projects. That starts with reforming permitting processes and zoning regulations.

‘Having a say in someone else’s property’ is really ‘voters voting for the rules and laws they want’. As long as the rules benefit most people who vote, why would they want to change it? And right now, that is exactly what is happening - it isn’t changing because most people who vote are benefitting from it. It’s a pretty fundamental part of a democracy. Until either 1) more people who don’t benefit from the current…

Of course the people who want to move in don't get a vote.

Re: California’s affordable housing problem is really a national one

#139

Post by Redoubts »

lotsofpulp wrote: post #128
jeffbee wrote: post #126

Earlier quoted context omitted.

It doesn't sound like you've ever been to California at all.

I would like to be educated if there's something I'm missing. Is there a legal maneuver in CA that can prevent people from using their real estate for whatever it's zoned for, excluding frivolous lawsuits?

https://www.sfweekly.com/news/why-a-laundromat-might-be-cons...

Re: California’s affordable housing problem is really a national one

#140

Post by Mountain_Skies »

asdff wrote: post #117
throwawayboise wrote: post #96

Earlier quoted context omitted.

> we don't build actual dense housing like we did before WWII Because that's not what is profitable for new construction. Builders will build what they can make the most money on. It's not a bad thing -- it's still an increase in housing and every new home sold or rented opens up an older home somewhere for a (probably) less wealthy person, and so on down the line.

Builders will build what they are allowed to build, and often what is zoned are variances for these massive structures with expensive parking structures and requirements like a mandatory 100sqft balcony for every single unit, and not piecemeal small lot apartments like what was built decades ago. Los Angeles in 1920 had a higher zoning capacity than it does today. I mean, it was a celebration when the city recently l…

Banks are part of the problem too. In Atlanta the city has loosened up many of the density restrictions and parking requirements only to find developers unable to build dense pedestrian focused housing because the banks won't make construction loans for those types of properties.
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