> you’re in the hole by at least $50,000 before you even put a shovel in the ground
So, the equivalent of people's downpayment in the rest of the country is lost to regulation. That's insane.
So, the equivalent of people's downpayment in the rest of the country is lost to regulation. That's insane.
Meanwhile in my home town of Fremont, a developer is putting in hundreds of new homes in North Fremont, and the school district has no way to charge those homes enough to actually build a school for them. The four nearest elementary schools are over-capacity, so the buyers will have the fun of commuting over five miles to school.
Consider the source: the linked article is from a Home Builder Industry magazine.
And yet the next sentences are:
"Typical fees in San Francisco are $72,600 per home; in Sacramento, they’re $62,000. And for the six California markets highlighted in the Zelman & Associates report, the average is $51,650."
Which doesn't make it sound all that bad after all. Particularly when they point out the land itself is about 1/2 the cost.
Not that any of it is good for anyone under 40...
Its sounds like a big number until you consider the final cost, aka everything is relative, it would be a much bigger deal if the houses were selling for $100k because then it would be 50% of the cost.
They're basically forced to build a (relatively) big expensive house so that the final cost seems reasonable despite the $50k in fees buried in it. Hence why they aren't building entry-level priced houses - they're too cheap to hide the fixed fees.
Edit: there are no entry-level houses because zoned land in places where people want to live in the bay are is more expensive than a lot + house in most other places. There are lots selling for >$500k or some for just as much with tear-down houses on them. That's not due to the fees.
If $50k is 10%, that means it's a half million dollar house. That may not be much by comparison to housing stock in California, but there are very few places where that's considered "entry level."
Which is not ideal, but on a $600k+ ($29k is 5% or less) home, let alone a $1m home, that simply isn't the primary cost driver.
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The whole article seems like it's poorly written or actively attempting to mislead. It's not until 1/2 way through that you learn:
Prop 13 stymies local tax increases, which means housing is an enormous cost for cities because they can't recoup their costs through property taxes. Instead, taxes go to the state government.
I dunno, could you imagine that severing the link between new development which increases local costs (schools, roads, utilities, police) and local income could affect cities' interest in building housing? Unlike complaints about environmental impact costs, this seems like a much more plausible explanation for the lack of housing.
Then the article finally explains that building impact fees are the only way local cities have to recoup their direct costs, which explains their rise. Why wasn't that in the first 1/2 of the article?
Also, prop 13 means rising prices are all to the good for home owners. In most (all?) other states, rising property prices mean homeowners pay more tax, which creates an incentive for homeowners to oppose too large an increase in home prices.
Finally, the complaining about the Zero Net Energy mandate is misleading as well when it presents it only as a negative. A few minutes research will show that it's intended to curb the growth of energy requirements. Power plants are big, expensive, and tend to pollute a lot. If we want to have 45m people in CA, we have to be judicious about how much pollution our state can withstand. And someone has to pay for those new power plants we will have to bring online if we don't curb power usage growth.
Because the authors hope you never read that far.
I was 15 when Prop 13 passed. My feeling back then was that despite the spouted wisdom of the adults around me that Prop 13
1. Wouldn't 'force the government to cut wasteful spending' Which is to say the government doesn't spend money on anything that doesn't have a powerful interest group behind it. Wave your arms as much as you want but those people aren't going to go away.
2. The government would make up for lost tax revenue by imposing nickel and dime fees on everything.
3. Also raise fines for just about any small infraction.
4. #2 & #3 being less efficient ways to raise revenue would lead in increases in government spending.
5. Wouldn't make housing more affordable, but instead would create a two classes winners and losers.
#5 is because of my belief that housing prices reflect how much people have to spend minus costs like maintenance and taxes, divided by the interest rate. Reduce taxes and the price just goes up. Bonus, local tax revenue tends to stay in the local economy creating local demand. Interest on debt is paid to the bond holders few of which are local.