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The answer to California's housing crisis is more housing

• epmatsw 7y ago
  > because developers mostly would build high-end units This is such a frustrating perspective.
  • maehwasu 7y ago
    It's frustrating because, as propaganda, it's been extremely effective. If you're an opponent of increased housing supply in California, you can roll out that talking point whenever threatened. It's tested, emotionally resonant, and most people don't have the time to be explained why it's wrong. Supporters of increased housing in CA need to come up with their own powerful rhetoric, rather than whining about the fact that their opponents' rhetoric works. (Whining further that bad rhetoric shouldn't be allowed is even worse--we live in a democracy; you have to influence people; rhetoric matters.)
    • burlesona 7y ago
      I usually put it this way: The wealthy are coming and they are going to take a house. If you build nice new condos, they’ll happily take them. But if you don’t, they’ll buy up run down duplexes, evict the tenants, and convert them into McMansions instead.
    • dyeje 7y ago
      It is, in my experience, true. I live in an up and coming suburb of Detroit and every new apartment / condo building is incredibly skewed towards the high end. In fact, a huge development project is going on in the downtown area currently. One of the requirements of the project was to set aside a certain percentage of the new units as affordable housing. When the developer was asked about the affordable housing at a city council meeting, they revealed they were targeting a price point of ~$1600/mo for a 1 bedroom. For context, the going rate in the city for a bedroom is $300-800/mo. There was no language specifying what exactly affordable housing so they can get away with it (something the city is working on for next time). My point is, this is a real problem. You need to think about it and you need to actively prevent it in from happening in whatever legislation you put forward.
      • robertAngst 7y ago
        > I live in an up and coming suburb of Detroit and every new apartment / condo building is incredibly skewed towards the high end. >new And what happens to the old units? They are sold and rented to the non-super wealthy. I also live in south east michigan and my neighborhood is undergoing gentrification, they are tearing down 1000 sq ft homes and replacing them with 3500 sq ft homes. What is the problem? I couldn't fit my large family(and renters) in a 1000 sq foot home.
        • cf 7y ago
          Old units in many places are frequently renovated and re-sold to upper-middle class and wealthy tenants. The end result is an erosion of housing stock for average and low-income residents.
          • guardiangod 7y ago
            But the said "upper-middle class and wealthy tenants" already bought the "new apartment / condo building" that were built in the first place. It seems to me that opponents seem to think there is a phantom limitless pool of "upper-middle class" that buys up all the new high-end condo _and_ all the refurbished older units. Logically speaking, this is not possible
            • cf 7y ago
              There doesn't need to be a limitless supply. In many cities if buyers aren't found, property owners are content to leave them vacant. You can see this in the relatively higher rates of vacanies in condos compared to other kinds of housing.
    • sidlls 7y ago
      Rhetoric matters much less than economic clout. Much of the "influence" you describe is from sustained marketing rather than through rhetoric. The rhetoric itself is almost irrelevant, in fact.
    • inferiorhuman 7y ago
      It's effective because there's a measure of truth in there, especially in California. Prop 13 will limit taxes on existing housing stock, so cities and counties will levy fees on new developments to make up for it. Additionally, the cost of labor in much of California is such that just building any structure is extremely expensive (to the extent that only luxury units will make any money for the developer).
      • MagicPropmaker 7y ago
        Prop 13 allows a 2% increase a year. That's more than enough to keep up with inflation.
        • inferiorhuman 7y ago
          Housing price growth well exceeds inflation.
  • trevyn 7y ago
    A lot of today’s housing stock was originally built as higher-end units, and moved down the chain as it got older. The idea is that when higher-end units are built now, the wealthy vacate some of their current units, which then have downward price pressure and become middle-range units, and so on.
  • friedman23 7y ago
    Any new modern apartment is considered luxury. Its actually impossible to build non luxury apartments in Sf. It seems what people want is for builders to actively destroy the apartment after they build it so that it will be rented at a lower price.
    • dragonwriter 7y ago
      > It seems what people want is for builders to actively destroy the apartment after they build it so that it will be rented at a lower price. What some people want is subsidized building of units in exchange for rent limits.
      • friedman23 7y ago
        Ok so what you want is subsidized luxury apartments. Because the quality of the apartment doesnt seem like its going down under your model.
        • dragonwriter 7y ago
          > Ok so what you want is subsidized luxury apartments. The main thing that makes an apartment luxury is location and being new; new construction in the Bay Area (except maybe an isolated single unit or small development in a particularly blighted area) is luxury inherently. The only thing that's not is old units, and you can't ramp up the supply of old housing units easily (about the closest is you could do a minimal inhabitable renovation on existing units that are too dilapidated to be legally inhabitable, but the supply of those is limited and IIUC it's often more expensive to do that than demolishing and rebuilding front scratch. So, yes, that's literally the most cost effective way to increase the supply of affordable housing for anybody but the rich.
          • friedman23 7y ago
            > The main thing that makes an apartment luxury is location and being new; new construction in the Bay Area (except maybe an isolated single unit or small development in a particularly blighted area) is luxury inherently. Ok, so a 1 bedroom 2nd story apartment in San Francisco in a new building without air conditioning and without a dedicated doorman that costs $4000 a month is luxury but a $1200 a month apartment on the 25th floor of a highrise in Atlanta with a view of the entire city, a dedicated doorman that will bring groceries and packages to your door and air conditioning isn't? Or are they both? The San Francisco option is to be clear not a luxury apartment. It's just overpriced. So what I'm saying is > The main thing that makes an apartment luxury is location and being new; new construction in the Bay Area (except maybe an isolated single unit or small development in a particularly blighted area) is luxury inherently this statement is flat out wrong. >So, yes, that's literally the most cost effective way to increase the supply of affordable housing for anybody but the rich. Just so we stop using terms that were invented for the sake of propaganda such as "affordable housing" and "luxury apartments" why don't we call a thing what it really is? Affordable housing - a limited supply of apartments taken off the market and given off in a lottery to a lucky few who get to pay less than market rate for rent. The rent is subsidized by the rest of the people living in the city. Luxury apartment - a normal apartment that is overpriced due to artificial scarcity. This artificial scarcity exists because of people using direct democracy to vote for laws that they believe to be in their interest without any understand of the second or third order effects of the law.
  • adrr 7y ago
    Because the cost to create a unit makes them high end from the start. You have to add fire suppression systems, elevators, seismic reinforced construction and pay for the land. NPR had a segment on it, listing the costs to build a modern day high rise unit and it there is no way to build it for low-income housing and make a profit. Even if given the land, at most it is break-even. Low income would have to rely on housing that wasn't new. Kinda like cars, it wouldn't make sense to have car manufacturers to try to create a sub $10k car when you require air bags, backup cameras, tire pressure monitors etc.
    • ip26 7y ago
      Where has the middle gone? Is it either extreme luxury or low income assistance?
      • DuskStar 7y ago
        The middle is old luxury housing.
        • ip26 7y ago
          Is that a unique SV situation? Where I live, most new housing is close to or only slightly above general market price for the corresponding market segment (e.g. 2br condo, 3br SFH, etc). It usually seems to come with pretty ordinary trappings- ordinary countertops, ordinary fixtures, maybe the floors are laminate, etc. Luxury appointment can be found, but nobody's building five hundred units with gold inlay.
  • epistasis 7y ago
    And it's self fulfilling too by those who limit housing construction. If only 10 units are built but there are 1000 units needed, those 10 units are going to be sold to the 1% wealthiest. If, seeing this, voters to restrict construction even more because the "wrong type" of person is buying, and only 1 unit is built, only the wealthiest buyer gets housing and it becomes even more "luxury." The only way to start serving the needs of "normal" people with new construction is to issue permits for that full 1000, or maybe even better, try to get developers to build 1200 or 1500 and then compete for buyers, rather than having buyers compete for limited production.
  • niftich 7y ago
    The notion that new construction being 'high-end' won't improve the market on the low-end is erroneous in markets where the spread of rent budgets of people forms smooth, continuous gradient. But the Bay Area is not such a market -- nor are places where significant cash infusions such as very high pay at the high-end or subsidies like military housing allowances to people of middle incomes will distort the field upwards. Then there's Prop 13, which disincentivizes the sale of legacy homes, removing many residents and homes in the middle of the income/rent spread from the liquidity of the market. Developers want to build units that are 'high-end' because it's the best way to recoup their costs. Urban construction is expensive and many projects are made possible by a combination of loans, private equity funding, and government subsidies. The increase of supply in high-end apartments creates competitive pressure on older units, places with less amenities, places with dated design, and places in inferior locations. Since housing sorting resembles an auction, people with the highest rent budgets have the most options. Landlords of less ideal places will see some tenants filter out and replaced. Eventually, the replacements stop coming, because all people of higher rent budgets have already moved to more desirable places. Instead of letting apartments sit empty, the landlord might lower the rent while still staying within the profitability threshold. This doesn't work every time. If people of high rent budgets never stop coming, they never have to lower prices: there's an undersupply on the high-end too. This is clearly the case in the Bay and other desirable areas of California.
  • imtringued 7y ago
    Serving the customers who can pay the most first is pretty much what happens in almost every industry but for some magical reason housing is "special". It's probably just that they have let their "customers" wait so much there is now a massive backlog of hundreds of thousands of them and in the current political climate it will take decade to serve all of them.
• mabbo 7y ago
  You can't just demand more housing. You have to make people want it. This is why I'm strongly in favor of taxing land by area. A ten story condo with 100 units takes up as much land as 8 houses with yards. By reducing everyone's taxes then making up the difference via a land tax, you effectively lower the taxes on people using high density land use homes. You make it a more desirable lifestyle. Demand from voters leads to changes in law.
  • codingdave 7y ago
    That would significantly increase the taxes on agricultural use. Is that your intent? To incentivize high density residential, while making it hard to grow food?
    • jdietrich 7y ago
      America is one of the world's largest exporters of agricultural products. There is no shortage of agricultural land that could and should be used for housing development.
      • khuey 7y ago
        Developing additional agricultural land on a large scale is incompatible with the carbon intensity reductions necessary to avoid incinerating the planet.
    • YeahSureWhyNot 7y ago
      agricultural use means different zoning which will taxed differently.
    • rmah 7y ago
      There isn't much agricultural land, if any, in cities and suburbs. In the US, land is taxed at the local level (municipality and county), not at the state or federal level.
      • aetherson 7y ago
• orkon 7y ago
  Could this crisis be an instance of induced demand? [1] [1] https://en.wikipedia.org/wiki/Induced_demand https://en.wikipedia.org/wiki/Induced_demand
  • epistasis 7y ago
    What is induced? California has been growing at a rate slower than other states. When it comes to domestic migration, it exports more people to other states than it accepts. When it comes to international migration, net migration is less than births minus deaths, and that's with a low birth rate. In the early 1960s, California had a population of 15 million and built 250k-300k homes per year. Currently California has a population of 40 million and build 80k homes per year. After the next census, California is expected to lose representation in the House because most other states are growing faster than California. California has had a major major change in population and building styles since 1980, but policy decisions are still made under the assumption that we are living with the 1960s numbers for building and population.
• DataWorker 7y ago
  California has a ‘too many people problem’. Housing is less critical than transportation, infrastructure, fire safety, jobs for all demographic groups (as opposed to tech jobs for well born young white men), and so on. Building housing is like giving candy to calm a child’s tantrum.
  • mabbo 7y ago
    All prices are determined by supply and demand. You're complaining that demand is too high as a reason to not increase supply.
  • futureastronaut 7y ago
    Since you're race baiting, I'd like to point out that there are plenty of us white guys out here who are not from privileged backgrounds and who have worked very hard to get to where they are. Please stop with the prejudice, for all people.
    • DataWorker 7y ago
      I’m talking job growth and demographics. The answer isn’t to make everyone learn to code. We need jobs for other demographic groups. Look at San Francisco and the displacement that’s occurred. To pretend it’s orthogonal to race or age or parental ses is simply wrong. Yes, you and many others may be somewhat exceptional, somewhat. I’m referring to aggregate statistics, not exceptional cases.
  • imtringued 7y ago
    https://news.ycombinator.com/item?id=19771824 https://news.ycombinator.com/item?id=19771824
• AbdulMohammad 7y ago
  If more housing was the answer then NYC would not have a housing problem. The answer is not more housing.
  • weeksie 7y ago
    This is entirely wrong. We don't build nearly enough housing in NYC and that's why our rents are so high.
  • Bombthecat 7y ago
    Absolutely agree! In my opinion the only way is to make smaller cities attractive! No matter how high or wide you build. People want to move to cities. Except they see a chance in smaller viliages. So we need more / attractive jobs in villages and better infrastructure. Including theaters, cinemas, shops, kindergartens etc etc.
    • kitsunesoba 7y ago
      Much easier said than done. For this to happen you’d have to convince multiple companies, hopefully across several industries, to risk opening offices and shops in such towns on nothing but faith that they’ll fill up in a somewhat timely manner, and then you have to convince a bunch of folks to move to these towns. Neither is particularly simple or straightforward. And of course, there also a large portion of people who have no desire to live in towns or suburbs, and these plans wouldn’t appeal to them at all. I’m personally in this camp — I’ve had enough small town for a lifetime already.
      • Bombthecat 7y ago
        I don't think it about people. In my old town a bunch of offices closed and moved to big city. They didn't hire new people. (probably also a way to get rid of old people which didn't want to commute 1 hour to the city) Also : why must it be 4 million city? Shouldn't it a 500k also enough? But right now, even those cities bled people. Moving to big cities.
• ahelwer 7y ago
  Have there been any studies examining the impact on the market of banning career landlords and REITs? What happens if you restrict residential housing to being owned by a single person who cannot own anything else in that area, rather than letting capital have the run of the place and treating homes as an investment plaything?
  • dahfizz 7y ago
    Would this mean no apartment buildings? Many people prefer to rent, and banning that seems a little selfish and short sighted.
    • walshemj 7y ago
      Many people have to rent, from a purely economic aspect owning is better than renting - there are social aspects to it as well.
      • jogjayr 7y ago
        > from a purely economic aspect owning is better than renting This is not the case in many places, especially the Bay Area.
      • dahfizz 7y ago
        Owning is better economically if you're going to stay in that house for a while. If you're living there less than a few years, all the costs associated with purchasing and selling g a house can hurt pretty bad.
    • ahelwer 7y ago
      Renting is not banned, people can rent out the single unit they own.
      • deleted 7y ago
        [deleted]
  • conanbatt 7y ago
• api 7y ago
  This is true, but I also think the answer is addressing the problem of seemingly all opportunity being concentrated in less than 10 cities. Cities face inevitable scaling limits. There has always been regional inequality of opportunity, but never to this degree. A great way to see the problem is to look at where the top ten most popular early personal computers came from. You will see places like Philadelphia (C64), Miami/Boca Raton (IBM), Dallas (TI), and Albuquerque (Altair). These days it would be almost all the Bay Area and maybe one from Seattle, NYC, Boston, or LA metro.
  • erentz 7y ago
    > Cities face inevitable scaling limits. The scaling limits being reached in CA are completely self imposed ones that have tested to the limit just how far it is possible to sprawl a city. All the way into the central valley it turns out. > There has always been regional inequality of opportunity, but never to this degree. This has been happening since people first settled in permanent locations. The trend isn't going to stop and the only way to reverse it would be to interfere pretty strongly with the market. What are you going to do, set up a central government agency that tells citizens where they can and can't live? That says how many "computer companies" are allowed to exist in a city and ban anyone from starting a new one? It's a fair observation but it's a pointless one that distracts from reality and actual solutions.
    • 0x445442 7y ago
      > What are you going to do, set up a central government agency that tells citizens where they can and can't live? I didn't see api suggest government intervention. I imagine at some point, if FAANG doesn't adjust the wages for their direct, local employees or start to contribute more to supporting service sectors then they'll be forced to decentralize. I see no insurmountable reasons preventing Google spreading to Wichita, Akron or Chatanooga, the employees just need to start demanding better living conditions. That said, it seems like younger folks want to live in environments more like Tokyo than Des Moines.
  • 0xB31B1B 7y ago
    Strong disagree. Urban aggregation is a global phenomenon in modern times, literally every country is seeing a rise of “mega cities”. It’s because workers are choosing to move to these cities as these cities have more opportunities for workers due to efficiencies of scale. The most dynamic economies are encouraging moving to mega cities (ex: China). Cities might have “scaling limits” but there is no evidence that any city in the world has approached these limits.
• walshemj 7y ago
  The problems with this is developers would love to abolish the green belt - but guess what when it came to selling the price wont go down.
• temp99990 7y ago
  There is so much wasted/poorly optimized land in SF. I cringe whenever I see the massive surface level Safeway parking lot in Duboce/Church.
  • kradroy 7y ago
    They should tear down the Fed Mint building behind that Safeway and turn it into housing. I don't even believe that branch does anything other than print proofs. A waste of space, but it's not happening during this presidency for sure.
    • ip26 7y ago
      Organizations that live on indefinitely- governments, universities, churches- don't give up land almost as a rule. One or two hundred years from now, they might really need this or that plot, and it could be nearly impossible to acquire then. One easy to appreciate example are universities & other schools holding (& sometimes leasing) land adjacent to them. If they didn't, in the distant future if they need to expand, some scalper or holdout could cause large problems.
      • temp99990 7y ago
        Definitely a few post office closures I’m aware of...
      • kradroy 7y ago
        The US Federal government sells land/property all the time. And as a consequence of the old adage "time is money", an indefinitely existing organization has an indefinite amount of money. Those institutions you mentioned have no issue buying whatever they want; holdouts be damned. A government pretty much has infinite money, churches are quite wealthy as a whole, and universities have a substantial pool of donors to tap despite having insanely large endowments that are quite well managed. I don't think your argument holds up.
  • erentz 7y ago
    The whole dogpatch to India Basin and hunters point areas could be upzoned massively to accommodate a few hundred thousand new residents very easily. Lay down a good street grid, have a plan to eventually put the third street light rail underground or overhead to give massive transit capacity and have a complete free for all of new high rise (20+ stories) apartments there. You could do this without touching any zoning anywhere else in the city. Yet we can’t even do this. Similar “win-win” options exist all over the Bay Area that don’t get done, and you begin to realize the real reason is preserving property values. All new housing is bad. Thus there is no negotiation with existing vested interests. They’ll run the city into the ground until the state forces their hand in some way.
• thatfrenchguy 7y ago
  Let's overturn Prop 13 first.
  • robertAngst 7y ago
    >government creates zoning laws that cause prices to skyrocket >person wants more government I've been confused about this perspective, can you break down the thought train you have?
    • raydev 7y ago
      Don’t confuse “more government” with “different policies”. If abusive parents exist, our first thought shouldn’t be to ban the existence of parents.
    • Retra 7y ago
      They had six government, now they want seven government. It's always good to have spare government in case one of them breaks.
  • MagicPropmaker 7y ago
    This is an evil idea. Why make people lose their home because some specu-vestor pays too much for the house next door, "revaluing" their property?
• maxxxxx 7y ago
  I think there should be a national effort to "spread out" the economy and fight the trend towards centralization in a few areas. If you build more housing in CA, even more people will move there and the overcrowding will become even worse. There should be incentives for companies to move away from places like SV and NY. More acceptance of remote work would help too but I wouldn't hold my breath for it.
  • rileymat2 7y ago
    I am not sure some areas that are growing are ideal from a water usage perspective, but I thought density was very efficient and should be promoted.
    • dgudkov 7y ago
      Density creates land scarcity which in turns gives a lot of power to landlords who collect the lion's share or economic benefits created by density. Density should come hand in hand with power-rebalancing measures, e.g. tax property hikes, more efficient zoning, and government-controlled rent, but practically it doesn't happen.
      • epistasis 7y ago
        Density is the response to land scarcity that takes away power from landlords, not the other way around. When there's massive land scarcity, but density is not allowed, it gives landlords far far more power than if density were allowed. Land value taxation is one way to reduce speculative land use by landlords, but it's rarely used, unfortunately. And in California it would require overturning Prop 13, a hugely regressive tax policy that has been somehow falsely enshrined as helping the little guy out, when in reality it mostly helps landlords and speculative land hoarders.
        • taysic 7y ago
          Focusing jobs in one area reduces competition among landlords while fostering multiple job centers with amenities encourages competition including price competition
• esotericn 7y ago
  How does ownership of apartments work in California? In the UK, owning a flat is decidedly inferior to owning a house. In large blocks you will almost always have a leasehold, which almost always means being subject to a whole host of onerous conditions from the actual building's owner. Share of freehold arrangements exist in smaller properties like old converted houses. But that only increases density slightly, and these sorts of places aren't really built any more; new developments are usually huge tower blocks or little houses. I'm looking at buying a place soon and will be going for a small freehold house simply because that's the only way to actually own property in the UK as far as I can tell. I've wasted far too much time on attempting to negotiate sane leasehold conditions.
  • aaronblohowiak 7y ago
    the most common way is to own a condominium. You own your apartment and a share of the common spaces / common infrastructure. The common stuff is administered by a homeowners association (HOA) that you as an owner are a part of. you typically then have a mortgage for the loan against the apartment and HOA dues to cover things like maintenance and insurance.
  • matchagaucho 7y ago
    Maybe just a matter of semantics, but high-density housing in the U.S. is mostly comprised of "condos" and "apartments". Condos are owned but must comply with homeowners association (HOA) rules on upkeep and maintenance. Apartments are rented and maintained by Landlord.
• drfuchs 7y ago
  And what will be the source of the water for additional California residents to subsist on? We just went through a 7-year drought, and they seem to be becoming more frequent and longer; never mind that climate change is making it all worse, as the snow-pack gets smaller and melts quicker. We can cut agriculture and build more dams somewhere to buffer more snow melt, but these are politically difficult to pull off, and of course have other negative effects on various constituencies (including migrant workers, like the ones who used to pick the crops where Silicon Valley now sits).
  • 80mph 7y ago
    Not too long ago during the Camp/Paradise fires, just about everyone in northern CA was breathing a toxic cloud of burnt drywall, cars, chemicals, etc. for over a week. Think of the millions of gallons of water wasted, flame retardants dumped, and carbon emissions created. Californians need to live in denser construction near jobs. No more sprawling, low-level construction where fires can easily spread and jump from one building to the next.
    • drfuchs 7y ago
      The amount of water used in fighting fires amounts less than a drop in the bucket (pun intended), so your advice, while perhaps otherwise worthwhile, wouldn't make a measurable difference in the quest to provide sufficient water for population growth.
    • ip26 7y ago
      Californians need to live in denser construction near jobs. No more sprawling, low-level construction where fires can easily spread and jump from one building to the next. I don't necessarily disagree with your conclusion, but you don't exactly solve the problem of fire propagation from house to house by putting everyone all into one building. A given suburban house might propagate and burn down. But if a 500 unit apartment building goes, you're losing 500 units, no ifs ands or buts.
      • imtringued 7y ago
• honkycat 7y ago
  People should just move to bumblefuck nowhere, Iowa where the land is cheap, there is no public transit or taxi service, no nature to interact with, and hang out with a bunch of racist uneducated Evangelical yokels who think driving around the country running over varmits is a great Friday night. Tons of opportunity there. It's just as good. Trust me. I've never lived there but I love to imagine the simple country life.
  • dang 7y ago
    Regional flamewar isn't allowed here any more than nationalistic flamewar is. We ban accounts that post this way, so please don't do it again. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html