California is building fewer homes. The state could get even more expensive | Hacker News Reader

California is building fewer homes. The state could get even more expensive

latimes.com

40 pointsPaulHoule45 comments

The NIMBYism here is, at this point, an intentional plan to price people out. We basically hate that we have to have open borders with the rest of the US.

Yup — it’s pretty clear that if they could, most California towns would want an application and interview process to move there. (And of course everyone who applies would be rejected)

> most California towns would want an application and interview process to move there

My hometown, Cupertino, was forced by the state to build low-income housing. They designated it low-income senior housing, and the application process strongly favours existing residents.

Yet I see condos in SF even in good areas outside of downtown sell for the same price as a decade ago

https://www.zillow.com/homedetails/2200-Market-St-APT-404-Sa...

> $759/mo HOA.

That's why.

$759 HOAs sound cheap to me actually.

Really? That's crazy. I imagine these are full service HOAs that take care of landscaping and provide other services?

I pay $480/mo for a CA-based HOA and receive very few services. A large chunk of that money goes toward insurance and maintenance. You start seeing real services (pool, etc.) at $1500+/mo.

that’s typical of any new construction condo

I think this is a unique circumstance. Market at 15th is not really a good area IMO - while it is close to Duboce Triangle (which is very nice), the road noise from Market combined with proximity to the sketch part of SOMA[1] make it fairly undesirable. But in 2014 when the building was brand new, there were many new developments going up in that area (Whole Foods opened around that time), so my guess is buyers were betting that the area would improve rapidly, and that was priced in. 10 years later, it seems pretty clear that that optimism was misplaced, so that premium evaporated.

[1] For example, that Safeway a block away is quite rough: https://www.sfgate.com/bayarea/article/safeway-2020-market-s...

there’s nothing “rough” about that area

i live right over there. you can pick a dozen other condos in SF outside of downtown being listed today and doubt any of them are selling for much more than a decade ago if at all. this is not an uncommon situation right now.

Except California wants as much immigration as possible to keep pumping up home prices as much as possible.

Limit supply, increase demand.

bingo

There is something of a cost death spiral in CA. Workers need housing, and so do all of the workers for all the services construction workers consume. This means construction labor is very expensive, so it’s hard to build housing that would solve the problem.

It's interesting that the "housing crisis" is exclusively a supply-side problem and the demand-side is never considered.

With the lowest birthrate in 100 years, and the deathrate at record highs, how is it possible that we have a supply problem? 15 years ago the Economist forecasted a glut in housing supply.

What is driving demand and why is it never mentioned?

How many undocumented migrants have arrived in CA in the past 4 years? Is California building housing or infrastructure (healthcare, energy, transit) sufficient to meet the influx?

Yale , MIT revised nationwide number up to 22 mil this year. since they settle predominantly in the southwest that would be 20-30% of the population . An unmanageable figure even for policy proponents

The US has millions of legal immigrants every year and also has had a record number of illegal immigrants the past few years(some estimates says 10M since Biden to office). That more than makes up for lower birth rates.

Arrests for illegal border crossings is at a record number, but that is a very different thing from the number of illegal immigrants in the USA. See https://apnews.com/article/immigration-border-crossings-mexi...

You can get more arrests simply by catching more people crossing the border with more border officers or better technology. Also, coyotes are using swarming techniques now, which means they expect a certain number of migrants are going to get caught, but the border patrol will be overwhelmed and miss the rest (pay extra to be in “group B”).

For cities with the most extreme prices, demand is driven in part by larger increases in office space than housing. ‘Unaffordable’ cities for people can be very attractive for businesses due to the local workforce, and for cities office space doesn’t have downsides like the need for schools and similar infrastructure.

That’s how you get extreme prices independent from national population trends. There’s other effects in play, increases in earnings and low interest rates allow for increased prices, but that doesn’t explain why housing specifically would be expensive.

I would like to see the inventory change rates compared to the population rates to understand the primary driver

Lower birth rate can still mean population is increasing (for now). It’s just doing so at a slower rate and will eventually hit equilibrium and only then start to drop

not if the birth rate has been below replacement and the death rate is at record levels

This is similar to Canada. All the talk is about 'build more homes' and none of it is about maybe not bringing in a million new immigrants in 9 months [0], which is an immigration rate of 3.3% of the population per year.

And of course if you dare mention the insane immigration rate, you're liable to get labelled a racist.

[0] https://globalnews.ca/news/10386750/canada-41-million-popula...

It's a resource constraint issue . First step of any new administration should be to do an inventory and assess whether the population trajectory is sustainable.

Immigration, legal and illegal. Just lookup US population growth.

Who flagged this? Show yourself!

If California was its own county with control over monetary supply, it could subsidize the building of houses (edit: without raising taxes) which would change the equation for building construction.

California can subsidize the building of houses even though it isn't a country, let alone one with control over monetary supply.

All it has to do is borrow or collect the relevant amount in taxes and spend it on housing.

FWIW, California actually does that. (Yes, California subsidizes housing at the same time that it does other things to discourage housing.)

if taxes have to be raised, it's dead in the water.

> California was its own county with control over monetary supply

You’re describing Argentina. If California monetised its deficit, it would be a hyperinflationary disaster.

This is nonsensical.

> This is nonsensical

California spends about $600bn a year on construction [1]. That’s 15% of its GDP [2]. Let’s say half of that is residential, in line with the nation [3].

The proposal is thus to monetise 7.5% of GDP. That is literally Argentina [4].

[1] https://fred.stlouisfed.org/series/CACONSTNQGSP

[2] https://en.m.wikipedia.org/wiki/Economy_of_California

[3] https://www.agc.org/sites/default/files/Files/Construction%2...

[4] https://www.statista.com/statistics/316916/argentinas-budget...

Of the FAANG companies, how many of them were started in Argentina? Of produce, how much is sold to other states in the US by Argentina? It's a lazy argument to say this totally different other place did this thing, and so we should expect the same results if California did that.

I wonder what happens when there’re no new dwellings that can come into a particular market. Only the existing can be used.

You tear them down and build higher capacity ones.

That adds a lot of cost to your project, so the pay off has to be huge. You buy the land with the existing structure, pay to tear it down, and pay to build the new thing. If you are building only slightly more capacity, the numbers won't work out, so hopefully zoning allows for a lot more.

You were presenting it as somewhat of an existential issue. In that case, I'm sure the concept of zoning would need to be radically overhauled, and it can no longer be a mechanism to protect property values but instead to prevent abuse of those who do not currently own any.

Zoning is the limiter, but a lot of zoning is due to infrastructure or geologic issues. You can build a trailer on land with septic, but you aren’t going to build an apartment building there. Actually, why mom owned land near Seattle that had this restriction: it was cheap, but you couldn’t actually build a house on it, so they built a huge garage with a second floor instead.

They build skyscrapers in Tokyo, and in San Francisco for that matter - on mud and bay-infill no less. Zoning has very little to do with anything resembling an engineering limitation. As for infrastructure there's taxes which should pay for everything, but it's common practice to simply require constructors pay for the upgrades. Nevermind that infrastructure should only be cheaper per head with density.

They don’t build many skyscrapers in Tokyo compared to its population: Tokyo has 173 skyscrapers at 14 million people, Chicago has 137 skyscrapers at less than 3 million. Most of the housing is 10-15 stories, under 150 meters. Tokyo has made huge investments in transportation, but a lot of that is private. They also have a multi billion dollar drainage system needed to keep the city from flooding.

HK is the gold standard for skyscraper living, if that’s what you are into. It is still very expensive though.

Bold of you to assume higher capacity is legal.

Shouldn't be flagged.

Limousine liberals doing the best they can to maintain their way of life without compromise. Problem is that the less fortunate are the ones who have to make the compromises.

The means to build (labor, construction material) as well as infrastructure like water, transit, roads, schools with teachers, etc...can be as limiting as land available to build and now how much can be built on that land.

I wonder if the former can be handled via more use of prefab homes. We really need to figure out how to up productivity in the home construction industry. The latter...well, its the same problem basically, we suck at building infrastructure: we either don't, or it is very costly and takes forever.

Reply on news.ycombinator.com