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How does any of that help when the real issue is the distorting effect of prop 13 on the market? Insane housing prices are being driven by an illiquid market, a
by kec 9y ago
How does any of that help when the real issue is the distorting effect of prop 13 on the market? Insane housing prices are being driven by an illiquid market, adding more housing isn't going to change that.
- davidw 9y agoPolitics is about "the art of the possible" and not letting the perfect be the enemy of the good. First the low-hanging fruit, then you keep going.
- kec 9y agowell yes, but what problem are you actually solving by adding more units? Yes, you're adding more people, but due to larger market effects you're not actually making the area any more affordable....
- davidw 9y agoBy adding supply, you will bring down prices or at least stabilize them. This is what all the economic literature on the subject says. Of course, it may not seem like you're making a dent, because housing has been so badly undersupplied there for so long.
- vedanta 9y agoProp 13 affects all of CA, you don't see prices in LA going up 100% in 3-5 years like you do in most south bay cities.
- kec 9y agoLA hasn't seen anything like the VC / tech boom that the bay area is currently in. Prop 13 reduces liquidity, but that doesn't automatically have an outsized effect on prices. It's only when a market is illiquid and there's a huge spike in demand that you see ridiculously negative effects like this.
- PretzelFisch 9y agoTrue, but Seattle is seeing large increases in housing prices do to low inventory as well. Maybe it will play out different in the long term vs the bay area?
- vedanta 9y agoProp 13 is a factor: http://lao.ca.gov/Publications/Report/3497#Does_Proposition.A013_Reduce_Property_Turnover.3F http://lao.ca.gov/Publications/Report/3497#Does_Proposition.... And overturning it for commercial real estate won't do much to help housing prices, except for any re-zoning that happens. Overturning prop 13 or amending it might not happen for 5+ years, if ever. Note: https://www.bizjournals.com/sanjose/news/2017/07/19/california-property-taxes-boom-despite-prop-13.html https://www.bizjournals.com/sanjose/news/2017/07/19/californ... Over the short, medium, and long-term then, building more is the only choice (SB 35, AB 71). Since you see prices not increasing as much in other parts of the state, it means building more can in fact keep prices down, as the deep-east bay construction shows.
- stale2002 9y agoPrices are determined by supply and demand. I can guarantee you that if you built a million apartments, then prices would go down.