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Comment by WalterGR | Hacker News Reader

I wonder if there are structural reasons why California's housing construction is lower than Texas, rather than intentional punching-down.

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Not sure if you intended the pun, but the biggest structural reason is not engineering but procedural. The permitting, environmental processes in CA are often onerous making new construction much more expensive. That means the rents must be higher to break even, which in turn means new apartments go up where the incomes support those higher rents. Paradoxicall places where incomes are high also tend to have the most onerous permitting.

>The permitting, environmental processes in CA are often onerous making new construction much more expensive

Can you give an example of this?

Building a toilet cost $1.7m in SF

https://en.wikipedia.org/wiki/Noe_Valley_public_toilet

That's just one specific toilet with unqiue requirements. How is this evidence?

There's basically no zoning whatsoever in much of Texas. That's how you get industrial explosions like the 2020 industrial explosion right up against a residential neighborhood in Houston.

California's largely the other extreme. Even large parts of San Francisco are zoned for single family housing (or maybe duplex if you're lucky). So already things like larger apartment buildings or mixed-use buildings that can be more profitable are out. CEQA allows for a lot of public feedback which is in turn allowed to grind projects to a halt.

For example there's undeveloped land in Brisbane, just south of San Francisco. It's near a freeway (CA-101) and commuter rail (Caltrain). The city of Brisbane's been (successfully) trying to block any development that would include residential buildings — they want office jobs not new residents. I don't know enough about other cities to make relative comparisons, but again in SF the department in charge of permitting (DBI) has seen a number of bribery and conflict-of-interest charges recently. Look at any big project in California really. Corruption at the city/county level may differ but the process by which anyone can gum up the works is a state mandated one.

It’s inaccurate to say that there’s “basically no zoning whatsoever in much of Texas”. In Texas, zoning is up to the individual cities. Houston is notorious for having a lack of zoning laws, but all of the other major cities like Dallas, Austin, Fort Worth, San Antonio all have very complex zoning laws.

NIMBY is by far the main problem CA has. The permitting process includes incredible amounts of public feedback, which makes it difficult to build a chemical plant and a middle school next to one another, but also makes it impossible to rezone or densify neighbourhoods.

> I wonder if there are structural reasons why California's housing construction is lower than Texas

Prop. 13 prevents localities from meaningfully taxing property values, capping nominal rates at lower than the national average effective rates and reducing effective rates even further by limiting assessment increases to much less than the usual value increase in between transfers.

This forces localities to rely on sales and income taxes (both local and redirected shares of state taxes, both directly and as allocations of state funding for particular functions), which are much more volatiles, and do not reward attracting moderate income residents who pay low income tax rates and for whom housing and sales tax exempt basics are a much larger share of their spending.

Three of the major Texas cities (Dallas, Austin, San Antonio) have far more room for growth based on geography they simply aren’t next to the ocean etc. This has significant impact on how infrastructure can be added and the availability of land for housing. California also has significantly increased construction costs dealing with earthquakes, and water scarcity issues.

But that’s a long way from explaining everything going on, government regulations have a real impact.

Texas is much more liberal in what you can do, which means that the market functions better. CA has much more - well meant - requirements and regulations.

Do you have evidence of this?

  > well meant

I dispute this. Parking requirements and stopping multistorey housing have no environmental justification.

The individuals behind these regulations (anti-housing activists like Marc Andreessen and the local NIMBY politicians) are well educated and wealthy. They know what they're doing.

California has significantly stronger NIMBY forces than Texas.

Desirable real estate is also much more constrained by geography than Texas.

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