Posted on 03/11/2018 6:03:30 AM PDT by Kaslin
The California Legislature passed many bills this past session that were signed into law which gave the government greater control of the housing market. This is a perfect example of invasive government creating a problem, blaming others for the problem and then creating even more rules to destroy the market even further.
The cost of housing in California is certainly a problem. The Business Insider identified that 18 of the top 25 most-costly housing markets in the U.S. are in California, with all of the top 10 being in the state. In a recent study by UC Berkeley, 56% of residents are looking at relocating due to the costs of housing, many moving to another state. Today just 28% of California households can afford a new home versus 56% in 2012 per a study by the California Association of Realtors.
Governor Brown signed 15 bills related to housing that were passed through the Legislature. These included a bill which would put a $4 billion bond initiative on the 2018 ballot. There is also a new fee of up to $225 on the sale of a property that would drive up the cost of housing, but be used to lower the cost of housing. One bill signed by Gov. Brown would revise the Housing Accountability Act and subject local governments to a $10,000 fine per housing unit if they do not meet the new rules and build affordable housing.
State Senate President Pro Tem Kevin De Leon (a candidate for the U.S. Senate) stated he was privately informed by members of the Los Angeles City Council that “We have been strangled, we have been handcuffed by NIMBYism and the threats from Neighborhood Councils.” This started a firestorm of outcry from the 2,000 members of local neighborhood councils who themselves are elected officials. This is all part of the fight over the interests wanting further housing development and others wanting preservation of neighborhoods. De Leon was characterized as bigoted and anti-diversity by some.
Many of the bills countered the mission of lower cost for housing. One bill signed requires that any private housing project that receives any public funding and is under agreement with a government agency pay union wages. The legislature got so detailed they passed another law which required union wages be paid to remove a tree – yes, a tree. Now the people who cannot afford housing in the first place cannot work on many of the projects that would enable them to live in that housing.
I spoke to Roger Davila, an Orange County housing developer, who told me that after 20 years he has gotten out of the low-income market. He said between the requirements placed on low-income housing by California and the local governments, together with the negative attitude of local residents toward the housing, it became impossible to build anything affordable. Davila said the bill to have the prevailing wage on private projects will drive the cost of development out of sight. He stated “They may be well intentioned, but they really don’t understand the effects of their legislation.”
The National Association of Home Builders (NAHB) study showed the regulations add just shy of $85,000 per unit of housing nationally. You can be assured those costs are even higher in California. But none of these bills addressed those costs.The bills just created more invasive government involvement in the housing market.
This is a patented process by the Left to take over an area of the economy. First, they see a problem; then they express outrage at the problem and suggest governmental solutions to the problem. When the governmental solutions fail, they suggest more governmental solutions and then more governmental solutions until they have nearly completely destroyed the free market. When that happens they completely take over that area of the economy and point fingers at the free market and say it is their fault.
Two prime examples of this are in California (and many other states’ legislatures) which loaded up health insurance -- adding minimum requirements like covering pre-natal care and chiropractors -- that the cost of health insurance became unaffordable to most. They then declare a crisis and further interceded in the market by passing Obamacare. Now that market is falling apart because their solutions have driven costs out of sight. The other example was when the federal government took over the housing loan market through Fannie Mae and Freddie Mac. They kept on layering the program with requirements for ridiculous loans. The market collapsed and they pointed fingers at the bankers instead of the laws.
Joel Kotkin, the Presidential Fellow in Urban Futures at Chapman University in Orange, CA, stated in a recent column “At the heart of the problem lie ‘urban containment’ policies that impose ‘urban growth boundaries’ to restrict — or even prohibit — new suburban detached housing tracts from being built on greenfield land. Given the strong demand for single-family homes, it is no surprise that prices have soared.”
You can believe that these 15 laws will further destroy the free market for housing and do next to nothing to resolve the homeless crisis in California which has to do with the cost of housing and other factors such as mental illness.
In five years, they will be back addressing the newly-branded crisis that these 15 laws did nothing to resolve with 15 new laws further taking over the housing market until there is no affordable housing in California. And then we will become Venezuela.
Not to worry, by the time the State Government finishes ruining the economy, and driving out the producers, real estate prices will be near zero.
So people can’t afford a home but they say that there is room for unlimited immigrants? What’s wrong with this picture?
Uh.... Is this California logic?
“I advise them to drop the bullet train and used the money to buy a nice RV for everyone who can’t afford a house. Also, give them an “I can park anywhere I want” sticker. Problem solved.”
Drive down El Camino Real in Palo Alto where it adjoins the Stanford University and you will see that your proposal is already implemented. Derelict motor homes and travel trailers are parked there for what must be a mile!
“Every town in California has a string of old motels that are under-utilized. “
Really? Not in the part of California in which I live!
We don’t need to build any more new housing in California. We need to remove 5 million people who are not supposed to be here.
One reason for the wild fires is there is still massive amounts of open land, not suitable for farming but fine for housing. The goverment won’t allow low density housing though as it leads to Republican voters.
You have to jump through so many hoops to remodel or build a new home here is So Cal it is going to kill the housing market. My wife deals with the cities and they are being force to charge extra fees for all the new regs. The home owner is getting raped. It’s getting ridiculous.
“I was on Treasure Island for nearly a year going to a Navy electronics school in ‘62 and ‘63”
Well, when the Navy moved out twenty years ago, the government turned most of it over to San Francisco. The then mayor, Willie “the sharecropper from Alabama” Brown, decided that he’d allocate all the housing there to Black welfare recipients. Now, it’s a ghetto with a marvelous view of the city, bay and Alcatraz!
These kinds of building processes are what caused Carl’s Jr to move their national headquarters to Tennessee.
It was taking their franchisees almost 2 years to get permits to build —all the while, they were either paying for a land lease or a mortgage payment. Since places like Carl’s JR do not run 500 different kinds of floor plans, that was beyond stupid. So entire headquarters moved to Tennessee-—where there is NO INCOME tax.
California housing about to burst yet again
The “housing crisis” areas of CA have hit theirs.
Something has to discourage a greater population at that point: higher prices, smaller “sardine” occupancy, emigration, or mass die-off. Pick one.
Having lived in the SF Bay area before escaping to rural Southern Oregon, I can tell you that they are no where near the real "carrying capacity".
The problem is that the government owns an enormous amount of land very close in to the population centers but preserves it as "green space" and will not let it be developed. They have also taken land from large private owners through zoning which prevents development and sequestered it from the housing market.
There is a secondary problem of the government now hating cars and roads so there is no chance of ever being able to actually access any of this close-in land even if it were available for development.
Existing homeowners are very happy to see their property values soar and have no desire to vote for anyone who would actually reduce housing costs.
The reason CA housing prices is so high, is because the prices are what the market is willing to pay, obscene as it is.
These Calif bashing threads are pretty funny. I challenge anyone to identify a state/region where ones net-net after-tax income/savings are greater than anywhere else. If there were a true imbalance, smart operators would soon flock there, re-establishing equilibrium between supply & demand.
The basic fact remains that while Calif indeed has very high costs of living, it also has comparably high wages & income. And please don't give me any malarkey about those holding low-skill jobs becoming priced out. There are many, many perfectly comfortable tradesmen, whether construction, plumbers, electricians, etc, working and thriving throughout the state.
The core problem, which drives a lot of the envy and criticism, is getting in on the ground floor in the first place. The initial high costs of entry, with limited network connections, makes for a difficult struggle. Which, of course, is one of the key reasons so many fail and leave.
But for the ones who survive and carve out their own space, once you've stabilized the income/cost balance, it's straight ahead sailing. We've got people in our neighborhood from a couple of different states - all have developed an anchor point and are in the flow.
Enforcing immigration laws?
Looks like east LA 2018.
Interesting.
I’ll note that gov’t sequestration of land is another factor contributing to reduced carrying capacity. They _could_ handle way more people, if (say) they just built SF into a single megalithic 100-story Kowloon-style building - but that would kinda wreck the point of living there.
One can find no verifiable number of the illegal aliens living in HUD-paid housing.
One suspects that the number is astonishingly high, and that this is a key driver in low housing availability; thus, high housing costs. Especially in the once-Golden State.
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