California bill to add more housing in single-family neighborhoods blocked
sf.curbed.com
sf.curbed.com
In any case, you need to tear down your existing home in order to realize any gains, which few people are willing to do.
when demand outstrips supply adding a different type of supply (like an apartment building) won't depress prices materially (for detached single family residences). they're different market segments.
also, you don't need to tear down the home to realize gains, since, as you yourself said, the value accrues to the land, not the building. the price would immediately incorporate that value, without the need to replace the structure atop.
if you also want to gain rental income, then yes, you'd need to replace the structure, but that's an investment to unlock a different income stream.
That's not how the real world works. In the real world, people who want to live in a single family home also want to live in a low density area. No one wants a single family home if there's a bunch of apartment buildings across the street.
Because they vote. New York renters are a powerful contingent. Because they vote.
A large fraction of California has self-selected out of the political process. That is the root of a lot of its problems.
If they could vote, they would change this.
2 things that would wreck california here are:
1) restricting immigration (they lose suckers)
2) liberalizing immigration (suckers get bargaining power)
[0]https://www1.nyc.gov/site/planning/data-maps/nyc-population/... [1]http://www.bayareacensus.ca.gov/bayarea.htm
There's already heavy government intervention in the housing markets, that's the problem: developers can't simply buy land and develop it to it's maximum potential. There are regulations that prevent the market from meeting demand, hence the skyrocketing prices that can't be addressed by increasing supply.
I don't see how that's a problem, in fact it sounds like a solution. I'm certainly not going to cry over a bunch of rich people losing their shirts on overpriced real estate.
That includes not investing into retirement funds. They are counting on their house being the retirement fund. When the housing market collapses, there are going to be a lot of people left holding the bag.
[1] https://tradingeconomics.com/hong-kong/housing-index
It may be an unpopular notion or maybe folks in SF are hoping to time the market, but the general trend across the globe is increasing price in desirable locales, barring natural disasters. So, yes, if a major earthquake hit SF, there would be a price correction :)
The entire global equities market has been going crazy for the past decade, in no small part due to the historically low interest rates.
Claiming that housing prices will keep going up is like claiming that the stock market will keep going up. Even if it is true in the long run, you can have recessions or depressions, some that may last decades (see Japan's stock market since the 90s).
Bull runs don't last forever. Rental yields are abysmal in top cities, sometimes barely enough to cover the unit's tax burden & maintenance. If equities go down, so will the value of these units.
HK is an especially speculated and manipulated market, only experts should play there.
Also the quality of life is not guaranteed by prices: SF is the only place i know where millionaires step on human shit on their way to work daily.
It's simple: teachers, nurses, baristas, garbagement, plumbers, etc. won't be able to live there. Nor do they need to.
These people can live somewhere else, far away, and commute in. To entice them to make this ridiculous commute, their pay will have to be extremely high, and they'll probably want shorter hours too (so they can spend half their work-time commuting), so they'll have to hire twice as many people.
So if some wealthy homeowner needs a plumber, it's no problem. Remember, plumbers are usually contractors. They can call up the plumbing company, who will send a plumber who will drive 2-4 hours to get there, and the same amount to go home. This will result in an enormous charge just for fixing a leaking pipe. But that's OK, because the homeowner is wealthy, remember? They can afford $3k for a service call. If they can't, well maybe they need to rethink where they're living, and sell and move someplace cheaper.
Some jobs just don't even need to be done. Baristas, for instance, aren't really needed. They can be paid a fortune to drive 3 hours each way every day, and this can be reflected in the coffee prices, but will wealthy people pay $30 for a latte? If they do, fine: baristas can commute. If they don't, oh well, the coffee shop can go out of business (or maybe have self-serve lattes), and the wealthy homeowners can go without.
The same goes for teachers. If the wealthy people aren't willing to pay enough taxes for teachers to have $250k salaries to live there, then they don't really need to have teachers, and their kids can go without an education. Maybe they can send their kids to boarding school somewhere cheaper.
Seriously, I think that if people stop fretting about these lower-paid people, and just let the chips fall where they will, the problem will resolve itself one way or another. Either the wealthy people will cave in and get local government to approve more affordable housing construction, or the local real estate market will collapse because people don't really want to live in a place where there's no garbage collection.
The unfortunate reality is that many people have little to no real choice in where they work or what they make. They live paycheck-to-paycheck and do jobs that do not come with any bargaining power. If they quit there will be 100 applicants to replace them the next day. And as the money continues to localize into major metro areas, the only available jobs are more and more often in those metro areas.
If you work-to-live then you have to have a job, if the only jobs are in the city you have to commute in, and if all the jobs pay $X you have to try to live on $X.
No, that's not the logic at all.
Remember, this problem is entirely local, and can't really be solved because the local politics are locked up by the local wealthy homeowners.
Minimum wage and employee rights laws are usually either state or federal (or both). But the state and federal governments here have little power to fix the Bay Area's problems, because of the way the governmental systems are structured.
Personally, I think minimum wage should be raised, and employee rights laws should be strengthened. That's government's job, to fix problems like this which hurt the lower classes. But for the Bay Area, I think they should just provide grants to help lower-income people move out of the area and relocate to cheaper places, leaving the Bay Area without any lower-class people. Then let's see how they function without any janitors or teachers.
On the national scale, my issue with “let the chips fall where they will” is because of how I’ve seen this issue play out in some of the places I’ve live here in the North-East. People in the position to demand that their wages match the cost of living do so, but those who work the kind of jobs that afford no barging power (office cleaning crews for example) can’t. This exacerbates the income divide, as the people who have/make more money are the ones in the positions to demand the largest increases to account for the local cost-of-living.
If the job pool starts to dry up, local businesses start busing people in and/or push local governments to subsidize public transportation. People need jobs, the jobs are in the city, so you end up with an entire economic class taking hour long bus/car trips to and from work every day. Nobody with means ever ends up inconvenienced.
You then end up with an entire economic class who doesn’t get compensated for the time spent commuting, incurs other associated expenses and complications (miss the bus and you don’t get paid), and ends up segregated to lower-cost-of-living areas outside the metro, which always see less funding for schools, parks, hospitals, public works, etc.
Yes.
That being said non-pecuniary have strong effects, which is why individuals will pay out the nose to live in the city with amenities rather than commuting 2 hours a day. I think you will be hard pressed to find individuals who are willing to spend 25% of their adult life commuting too and from work. Certainly, not enough will be willing to satisfy labour requirements.
I don't think this is hard at all: I'm not suggesting that people spend 3 hours commuting each way, plus 8 hours working. I'm suggesting they spend 6 hours commuting (both ways), and 2 hours working, and get paid for 8 hours, and the business hire 4x as many people to get the job done because of this.
I'm sure they can find plenty of people willing to spend much of their workday commuting, and only having to do 2-4 hours of actual work, provided they're paid for it all.
This will, of course, result in much higher prices for local goods and services, but the locals can afford it; they're wealthy landowners, after all.
> I think you will be hard pressed to find individuals who are willing to spend 25% of their adult life commuting too and from work. Certainly, not enough will be willing to satisfy labour requirements.
To the extent that there are no people who will do the jobs (i.e. they won't pay $ + time to live close enough), those jobs will need to offer more money, or go unfilled.
That said, the unfairness of single family house subsidies will have tremendous impact on the long term suitability of the state. CA does have a high homelessness and house poverty problem. San Francisco is already a dump: literal human poop on every street in front of million dollar condos built in the 70's.
Once tech diversifies away from CA they are toast.
So? Let them crash and burn and serve as an example to the other 49. There will always be some states poorer than others. What's the harm in CA going from the top to the bottom?
The only thing that worries me about CA crashing and burning is that the upper and upper middle class who advocated for the public policy that caused the crash and burn may move to other states and enact the same policy before it becomes obvious that their policy is what caused CA's demise.
I think the core policy issue is not housing though, its taxes. Single family homes pay less taxes than what they consume: building more housing will increase density, but if my model is right, it will expand public spending and keep rents high.
I wish I knew which legislators blocked this so I could donate to their opponents.
With only my friends as data points, owners are more likely to vote.
This is the problem with renters. When they don't like how things are going, maybe they feel helpless, they just move to a different city.
And CA is 27% foreign born population.
The slogan for the people against it were saying "Don't turn cupertino into condotino!" There are a lot of condos in cupertino now.
Interesting. The quality of life in such neighborhoods seems to me to be some of the lowest in the nation. Sure there are worse places but overall, in my experience, such neighborhoods have no stores, no desirable public lands where people spend any time, and really nothing at all other than houses and ghost streets. One needs a car to go anywhere. There is nothing to do, no one to see, and no one to interact with. It's no wonder people who live there end up using drugs and coping with a ton of anxiety and depression. It's one of the worst places to raise teenagers and young adults especially ones not old to drive. Having lived in such neighborhoods all my life, I still can't understand what people are talking about in regards to the quality of life. The quality of life is shit. But I can see putting up with that for more money. I guess that's what they mean by quality of life. Low taxes and home value appreciation.
I personally prefer to live in a place where I can live my life through walking and transit, but I know quite a few people who prefer open, spread-out, commercial/industrial-free neighborhoods, and either don't mind or actively enjoy having a car and driving places.
Edit: Here is a video of him saying that despite the crisis, he doesn’t think the bill is right, and maybe something better will come along https://twitter.com/BryanRAnderson/status/112911212601702809...
I believe the conventional wisdom is that legislators' offices pay more attention to calls than letters, and either of those are stronger signals to them than emails.
legislators' offices pay more attention to calls than letters
Tell Senate Pro Tem Toni Atkins you want her to do everything in her power to get a floor vote this year.
That said, even "luxury apartments" give the wealthy a place to live rather than bidding on existing housing stock, and so do relieve price pressure on older buildings.
"How about building more housing?"
"Anything but that!"
So "how about limiting influx of new people / new development?"
"Sure, let's do that"
I understand newcomers may disagree with that approach, out of understandable self interest.
But implying people currently living there are clueless or more selfish by defending their interests?? Trying to make newcomers sound morally superior? Come on.... You can do better that than that.
People aren't clueless for defending their interests, but they absolutely are being highly deceptive in the way they are going about it. Many even go so far as to try and claim that increasing housing supply will actually increase prices. There was even a ballot initiative to ban market rate housing construction in central San Francisco.
Again you can disagree with them, it is fair, but I think their approach is perfectly understandable, and if you want to argue and debate, no one should assume they are hypocritical or morally inferior. I read thosr comments all the time on HN.
The minute you say "housing crisis", you show which situation/point of view you're coming from. It's not a crisis that "needs" to be solved with more housing, it is just your viewpoint.
I think you should explain and defend the policy you wish, instead of critizing an imaginary adversary by putting words in their mouth.
If you want more housing, hoping that prices will go down, say so. If you favor a SF Bay area looking progressively more like NY City, say so. Many people are very happy in NYC. And prices are also very high there.
Just expect some people to frankly disagree with that proposed evolution, and don't attack them by being non inclusive: this is not the question. Misrepresenting their arguments is not helping further your point of view.
(whose incumbent said "we will do anything to solve the housing crisis?" in your original point?)
> If you want more housing, hoping that prices will go down, say so. If you favor a SF Bay area looking progressively more like NY City, say so. Many people are very happy in NYC.
Yes, absolutely. Build more housing and build denser housing. This is what pro-housing people have been saying for years.
> And prices are also very high there.
There's 8 million people in NYC instead of 800,000 in San Francisco.
> Just expect some people to frankly disagree with that proposed evolution, and don't attack them by being non inclusive: this is not the question. Misrepresenting their arguments is not helping further your point of view.
Pointing out the contradiction of one's purported values with their actions is not an attack. When people support exclusory policies like rent control and curbing housing development with the goal of reducing the ability of people to move there, they are being exclusive. This is not a misrepresentation. People who support said policies while simultaneously purporting to foster an inclusive community are indeed being hypocritical. This is not an attack, this is a factually correct observation.
San Francisco is a sanctuary city so officially they do encourage more newcomers to come.
Well, their children can't afford to live here so that's going to be a problem.
Contrast this with houses in Japan, where it's expected that a home is a depreciating asset. Houses in the Special Wards of Tokyo can be bought for $300-400k: https://www.youtube.com/watch?v=iGbC5j4pG9w
Somebody defending their interests doesn't make them not selfish.
"We have to do something about X!"
"Here's what sacrifices you can make to help..."
"Oh, I meant we need to help, not me."
It's not gold or silver or stocks and bonds.
People need houses to live in. Other investments don't have practical value. If people want to protect their assets, do it outside real estate.
I'm sure very few owners of multiples houses let them empty and not rent them out so that people can live in them.
Houses are expensive, even outside their speculative value, in terms of raw materials, workmanship etc. So expensive that few people can afford to buy houses with cash.
If someone is paying that cash to build a house, then offering it for an affordable rent so that other people can live in them, they are providing a valuable service.
There are lots of vacant homes. Foreign buyers are pushing their wealth to the west to protect it from their own governments.
So yes, another strategy to lower housing costs is to reign in foreign ownership.
If your family sits down for dinner and one person gobbles up all the food before anyone else eats, were they within their rights? Will the rest of the family ever invite that person to dinner again?
No. We implement these controls on consumption in all areas of life. "Limit 2" when there's a coupon, for example. "All you can eat" restaurants don't allow take home and sometimes charge you for what you do not actually eat.
We must limit the wealthy's ability to consume all the goods so there are goods left over for people who need to live in them.
How does this not make sense? Why do you think it's better that someone owns 2 houses leaving 1 without a home, than two families owning 2 homes (one each).
Isn't that a better world?
If lesser-paid people would just leave the area, leaving that area without service workers (or having to pay ridiculous wages for them, driving prices way up for the wealthy homeowners there), the problem will solve itself.
Basically the service industry just ... evaporates. I've seen it happen in areas with a lot of foreign ownership.
How exactly is this a problem?
Too bad for the restaurant owner, but he can re-open in a place where he can hire staff more easily.
Why does the Bay Area need restaurants? If the wealthy homeowners there don't want any lowly restaurant staff living around them, then why should they have any restaurants?
Products and services can't be human rights.
When mobs of zombies start shuffling out of the Pacific and swarming coastal cities, you call the National Guard and impose martial law, "government overreach" be damned. And when things reach this level of dysfunction in the housing market, it is appropriate to start rationally examining practices we've always taken for granted in the past like unfettered real estate investment.
I don't think it's my right to own all that. I don't need it. Someone else does. Unfortunately, they can't afford it and I can. Doesn't make it right.
It's also your right to give that property away if you like.
https://en.wikipedia.org/wiki/Right_to_property
Article 23 of the declaration states: “Every Person has the right to own such private property as meets the essential needs of decent living and helps to maintain the dignity of the individual and of the home.[10]”
-- This is not the case with real estate in America. It isn't dignified.
It's no different than a bully on the playground taking the ball from a weaker kid. They both have a right to play with that ball, right? The bullying force just comes from a bank account -- that's all.
No, we shouldn't allow financial bullies to run rampant either.
If anything, I think if the state government is going to do anything, it should help service workers relocate to more affordable places and find good work there. Let the Bay Area real estate market collapse.
I'm simply advocating that all the service workers relocate to other cities. I live in the DC area; there's tons of restaurants and other businesses here where service people work, and while housing is relatively expensive, we don't seem to have the problems with it for lower-paid people that the Bay Area has.
I don't think high vacancy rates are the problem, I think they are a symptom.
Most of the people in this thread are only looking at the bay area from the past dozen years or so. In 2002, the picture was much different. In 1999, it was the opposite of 2002.
When you've lived in an area for decades, you can pick and choose where and when you buy. If you just moved there for a job, you're stuck without that time diversification and leverage ladder used by the folks who have lived there for a long time and accumulated many properties.
https://sf.curbed.com/2019/3/21/18276227/vacancy-rate-san-jo...
So, yes -- it does.
If there were 10x as many homes for sale as are currently for sale, what do you think that'd do to the price of homes in the area?
Source: https://www.mercurynews.com/2019/02/14/the-bay-area-has-more...
So your plan is to outlaw ..... renting??
Why?
In reality, half of the population will not want to (or be able to) own two properties (and many will not even be able to own one), so you end up with a nominal amount of home ownership, a very tiny rental market, and a bunch of people who both can't afford homes and have nowhere to rent because of the aforementioned very tiny rental market.
I personally own many pieces of real property. This law would affect me too. I'm actually one of the wealthy who think what we are allowing to happen is wrong.
This would have greatly changed the character of neighborhoods that people have lived and invested in for decades. If you can't see the political problem with that, well, you might want to learn more about California politics.
I don't want to live in a high density area, so that's why I chose to live somewhere else.
When you buy a house, you don't buy the neighborhood.
However you are completely onboard with doing the same to others.
Don’t you want to put more housing where the jobs are?
https://votesmart.org/candidate/campaign-finance/129655/scot...
And, to your second statement: if people do indeed have a "right" to a home less than $2 million, they can exercise that right. It just might not be in Palo Alto.
I guess she votes to keep it that way. Wouldn't most people do so? She helped create the neighborhood that so many people envy. Anybody else who wants a similar neighborhood can go do the same thing: build a house in a cheap area with open land, then live there for 56 years. What people are demanding is to skip that effort. People don't want to build out on empty hills and then wait 56 years. They just want to take what people like her created, degrading it with excess traffic.
No one has such a right. If you want to buy a home for under $2 million, there are plenty of these in the East Bay and East San Jose. No shortage at all.