3 ms·

It is good they are going to support the building of more housing. However the requirement to sell twenty percent at below market value is simply going to pass

It is good they are going to support the building of more housing. However the requirement to sell twenty percent at below market value is simply going to pass that cost on to everyone else who cannot qualify for the lower priced housing. As in, everyone else pays more. It might be better to work otherwise as those moving into the new housing would surely be vacating other housing. Yes there will be people totally new to the area moving into the new housing but the majority should be local movers. Before some throw out the idea that its needed to have the developers sell below market it will push some out of the market as well as the cost of the market value homes have to increase to pay for the subsidized homes. In other words, politicians do this to gain votes all the while hoping those who are adversely affected are not annoyed enough to vote against them

Aeolos 11y ago
> However the requirement to sell twenty percent at below market value is simply going to pass that cost on to everyone else who cannot qualify for the lower priced housing. As in, everyone else pays more. You say this as if it's a bad thing. It's not.
wpietri 11y ago
> However the requirement to sell twenty percent at below market value is simply going to pass that cost on to everyone else who cannot qualify for the lower priced housing. That's not necessarily true. Future purchasers are one source of money, but others include builders, investors, and landowners. If the 20% requirement is typical and historically consistent, then presumably that has already been priced in by the property market. In other words, the parcel value may already be discounted from your alternate-universe value to reflect the below-market requirement. In that case nobody really pays more; it's just that whoever held the parcel when the requirement was created wasn't able to sell it for as much as they might have. Even if it were 100% true, I don't think anybody involved would be shocked to hear it. If you have a limited commodity that you sell at auction, the richest people will get the commodity. With housing, that means you may in effect create a community of only rich people. Presumably the citizens of Mountain View want a different outcome. If you just don't like the mechanism, you should suggest a different one. But if you're disagreeing with their goal, then the mechanism's mostly irrelevant.
- Aeolos 11y ago
  Beautifully written.
nradov 11y ago
The trouble with below-market-rate requirements is that they distort the market by inhibiting price discovery and imposing a hidden tax on property developers. A fairer solution would be for cities to use their general funds to directly subsidize housing for certain residents. Cities could purchase residences at market rates and then rent or sell (with deed restrictions) to low-income people. One of the key drivers for BMR requirements is that municipal workers can't afford to live in the cities where they work. So the obvious solution there is to simply pay them more. Of course with Proposition 13 imposing a straitjacket on city budgets it's nearly impossible to put market-based solutions like these in place.

Aeolos 11y ago

> However the requirement to sell twenty percent at below market value is simply going to pass that cost on to everyone else who cannot qualify for the lower priced housing. As in, everyone else pays more. You say this as if it's a bad thing. It's not.

wpietri 11y ago

> However the requirement to sell twenty percent at below market value is simply going to pass that cost on to everyone else who cannot qualify for the lower priced housing. That's not necessarily true. Future purchasers are one source of money, but others include builders, investors, and landowners. If the 20% requirement is typical and historically consistent, then presumably that has already been priced in by the property market. In other words, the parcel value may already be discounted from your alternate-universe value to reflect the below-market requirement. In that case nobody really pays more; it's just that whoever held the parcel when the requirement was created wasn't able to sell it for as much as they might have. Even if it were 100% true, I don't think anybody involved would be shocked to hear it. If you have a limited commodity that you sell at auction, the richest people will get the commodity. With housing, that means you may in effect create a community of only rich people. Presumably the citizens of Mountain View want a different outcome. If you just don't like the mechanism, you should suggest a different one. But if you're disagreeing with their goal, then the mechanism's mostly irrelevant.

Aeolos 11y ago
Beautifully written.

nradov 11y ago

The trouble with below-market-rate requirements is that they distort the market by inhibiting price discovery and imposing a hidden tax on property developers. A fairer solution would be for cities to use their general funds to directly subsidize housing for certain residents. Cities could purchase residences at market rates and then rent or sell (with deed restrictions) to low-income people. One of the key drivers for BMR requirements is that municipal workers can't afford to live in the cities where they work. So the obvious solution there is to simply pay them more. Of course with Proposition 13 imposing a straitjacket on city budgets it's nearly impossible to put market-based solutions like these in place.