4 ms·

> Houses get built, maybe just not in the favorite places. So 9 out of 10 families get to live in a commutable distance to where they work, or 2 families get t

> Houses get built, maybe just not in the favorite places. So 9 out of 10 families get to live in a commutable distance to where they work, or 2 families get to live in half the appropriate space. Not good for the economy, not good for the families, very good for landlords. Whether or not housing is naturally flexible, CA's government has done pretty darn well making it inflexible. See rents vs. inflation. Every dollar of rent above costs for construction and necessary administration is a monetary redistribution from the renting class to property owners. CA doesn't lack land, and it doesn't lack the ability to pour concrete into earthquake-safe cubes with plumbing; the difficulty in construction and resulting high rents is the result of intentional obstruction and regulatory capture by the benefiting property owners.

JoeAltmaier 7y ago
Straw man.
- thereisnospork 7y ago
  Please elaborate: which man is made of straw? Has California real estate valuations and rents not exceeded inflation for the past decade+? In economic equilibrium should rents not equal amortized construction costs? Have increasing rents not impacted commuting distances and housing availability for the renting class worker? Would these impactions not hurt the economy as a whole? Or do you disagree that regulatory barriers to building housing benefit those who own existing housing?
  - dragonwriter 7y ago
    > In economic equilibrium should rents not equal amortized construction costs? No. I mean, even with the kind of generic-market idealized assumptions (such an unlimited competition) that never really apply to real estate anyhwere, rent would equal the amortized cost of providing the rental property, including land acquisition, construction, maintenance, etc.
    - dllthomas 7y ago
      Notably including opportunity cost.
    - thereisnospork 7y ago
      I agree that my earlier argument is simplistic in its presentation, (here I would treat 'construction costs' as to build and operate an apartment, amortized over lifetime and apartments in a building -- I understand I could have phrased that better but terseness is necessary lest every comment devolve into an essay) but is still correct in its assessment: CA rents are far in excess of any reasonable economic equilibrium, per 'amortized cost of providing the rental property, including land acquisition, construction, maintenance, etc.' Given in particular that in CA (the bay area and SF too) land is in surplus[0]. [0]Regulatory-allowed access to said land, on the other hand, is less permissive.
      - dragonwriter 7y ago
        > CA rents are far in excess of any reasonable economic equilibrium, per 'amortized cost of providing the rental property, including land acquisition, construction, maintenance, etc.' Really? Show the numbers. I was under the impression that the Bay Area had a very high land ownership premium, that is, that land acquisition costs are very high compared to rents. Plus, real prices are usually out of line with economic equilibria in dynamic markets, the equilibrium is the price that a market would achieve if it was in a steady state with no changes for an infinite period. A sustained market distortion raises the equilibrium, it doesn't maintain prices above the equilibrium. Prices above (or below) equilibrium are so are do to frictional forces which cause prices to adjust toward equilibrium at a limited rate. So, I'm not sure why you are harping on equilibrium, it seems to be the wrong issue for what you seem to be concerned about. > Given in particular that in CA (the bay area and SF too) land is in surplus[0]. Even if that was true, regulatory permitted access largely effects rent through land acquisition costs, not independently of it, so it would explain why both land acquisition costs and rents were higher than they would otherwise be, but not why rents are higher than they would be expected to be given costs to landlords including land acquisition costs.
fargle 7y ago
Pretty sure it's not the landlords and wealthier classes that are making CA's government into a giant tarpit. They'd love to see less and smaller government. Over-regulation is only a part of the cost. The biggest part is the demand. But don't worry, whenever people figure out that silicon valley jobs can easily be relocated, to basically anywhere, that will all work itself out.
- thereisnospork 7y ago
  > Pretty sure it's not the landlords and wealthier classes that are making CA's government into a giant tarpit. They'd love to see less and smaller government. They, like anyone else, want to see a government act in their interest. Sometimes that means less government, sometimes it means more. Democrats want more government in healthcare, Republicans want more government in immigration; it is about what they want not how they get it. And yes it will sort itself out, much like Detroit has worked itself out after the auto boom. It is just sad seeing myopic governance[0] lead CA towards that future. [0]"Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

JoeAltmaier 7y ago

Straw man.

thereisnospork 7y ago
Please elaborate: which man is made of straw? Has California real estate valuations and rents not exceeded inflation for the past decade+? In economic equilibrium should rents not equal amortized construction costs? Have increasing rents not impacted commuting distances and housing availability for the renting class worker? Would these impactions not hurt the economy as a whole? Or do you disagree that regulatory barriers to building housing benefit those who own existing housing?
- dragonwriter 7y ago
  > In economic equilibrium should rents not equal amortized construction costs? No. I mean, even with the kind of generic-market idealized assumptions (such an unlimited competition) that never really apply to real estate anyhwere, rent would equal the amortized cost of providing the rental property, including land acquisition, construction, maintenance, etc.
  - dllthomas 7y ago
    Notably including opportunity cost.
  - thereisnospork 7y ago
    I agree that my earlier argument is simplistic in its presentation, (here I would treat 'construction costs' as to build and operate an apartment, amortized over lifetime and apartments in a building -- I understand I could have phrased that better but terseness is necessary lest every comment devolve into an essay) but is still correct in its assessment: CA rents are far in excess of any reasonable economic equilibrium, per 'amortized cost of providing the rental property, including land acquisition, construction, maintenance, etc.' Given in particular that in CA (the bay area and SF too) land is in surplus[0]. [0]Regulatory-allowed access to said land, on the other hand, is less permissive.
    - dragonwriter 7y ago
      > CA rents are far in excess of any reasonable economic equilibrium, per 'amortized cost of providing the rental property, including land acquisition, construction, maintenance, etc.' Really? Show the numbers. I was under the impression that the Bay Area had a very high land ownership premium, that is, that land acquisition costs are very high compared to rents. Plus, real prices are usually out of line with economic equilibria in dynamic markets, the equilibrium is the price that a market would achieve if it was in a steady state with no changes for an infinite period. A sustained market distortion raises the equilibrium, it doesn't maintain prices above the equilibrium. Prices above (or below) equilibrium are so are do to frictional forces which cause prices to adjust toward equilibrium at a limited rate. So, I'm not sure why you are harping on equilibrium, it seems to be the wrong issue for what you seem to be concerned about. > Given in particular that in CA (the bay area and SF too) land is in surplus[0]. Even if that was true, regulatory permitted access largely effects rent through land acquisition costs, not independently of it, so it would explain why both land acquisition costs and rents were higher than they would otherwise be, but not why rents are higher than they would be expected to be given costs to landlords including land acquisition costs.

fargle 7y ago

Pretty sure it's not the landlords and wealthier classes that are making CA's government into a giant tarpit. They'd love to see less and smaller government. Over-regulation is only a part of the cost. The biggest part is the demand. But don't worry, whenever people figure out that silicon valley jobs can easily be relocated, to basically anywhere, that will all work itself out.

thereisnospork 7y ago
> Pretty sure it's not the landlords and wealthier classes that are making CA's government into a giant tarpit. They'd love to see less and smaller government. They, like anyone else, want to see a government act in their interest. Sometimes that means less government, sometimes it means more. Democrats want more government in healthcare, Republicans want more government in immigration; it is about what they want not how they get it. And yes it will sort itself out, much like Detroit has worked itself out after the auto boom. It is just sad seeing myopic governance[0] lead CA towards that future. [0]"Democracy is the theory that the common people know what they want, and deserve to get it good and hard."