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Thesis of the article: Californians are fleeing California and causing the same housing pressure in the spots they flee to. The real question is whether these

Thesis of the article: Californians are fleeing California and causing the same housing pressure in the spots they flee to. The real question is whether these other locations can avoid the high-density housing NIMBY response that became entrenched in California. It isn't just a matter of income disparity, which the article pivots to. It's also a matter of density and demand.

spamizbad 6y ago
The challenge you have is that people view housing as an investment. Americans expect their home values to keep pace with inflation. And because housing values are so expensive, there's a tremendous amount of psychological pressure to "preserve" what they've purchased beyond their own property line (eg: "Neighborhood character"). For these reason, they're going to oppose any new supply entering the market. The only way you're going to fix this problem for good is to have the government step in and force new housing supply into markets, which is going to be extremely unpopular with everyone, including most YIMBYs who would favor removing market barriers. So it's a political impossibility - you can blame it on Boomers but truth is Americans aren't ready to decomodify the housing market.
- lisper 6y ago
  You're being very unfair here. When you choose a place to live you are not only choosing the structure in which you reside, you are choosing the surrounding environment as well. People's desire to keep the environment from changing too much extends beyond financial interests. I live in a quiet suburban neighborhood, and I want it to remain a quiet suburban neighborhood even if the value of my house drops. In fact, I would love to see the value of my house drop, along with the value of all the houses around me, because that would make it easier for me to move locally and improve some of the sub-optimal features of my current situation, not least of which is that my house is much too big for my needs. But I can't move to a smaller house because the tax hit I would take makes it cost more than I can justify. The smaller houses around me now cost more than our house did when we bought it, so if we move we take both a one-time capital gains hit and an ongoing property tax hit. None of that would happen if houses depreciated like cars. UPDATE: Please take note that I am not saying I have any kind of right to keep my neighborhood from changing, only that my desire to keep it from changing is not purely financial. (In fact, in my case, it is the exact opposite!)
  - sokoloff 6y ago
    If your gains are less than $250K (single) or $500K (married-filing-jointly), you've owned it for 2 years, and you've lived there 2 of the last 5 years, your gains are excluded federally. In general, the structure does depreciate very slowly (in real dollars) and the land appreciates in value (at least in desirable areas), typically more than swamping the slight depreciation on the structure.
    - lisper 6y ago
      We live in Northern California. We bought this house at the bottom of the 2008 crash. Our gains are considerably more than the exclusion limit. (One of the many stupid things about the tax code is that the exclusion limit is not indexed to time.)
  - cltby 6y ago
    The structure itself does depreciate (ask any landlord!). It's the land value that's surging.
    - lisper 6y ago
      Sure, but the structure and the land are tightly bound. I can't buy or sell a structure without also buying or selling the land that it sits on, so this is kind of irrelevant.
      - shuckles 6y ago
        One of the advantages of non-single family zoning is exactly that it allows us to decouple the two.
      - c22 6y ago
        You absolutely can, but moving structures can get pretty expensive.
    - throwaway0a5e 6y ago
      Commercial structures often appreciate as an area gentrifies and starts using legislation to kick out industrial activity in favor of coffee shops and other consumer facing stuff. So the facilities (and permission to operate them) appreciate like there's no tomorrow.
- enraged_camel 6y ago
  >> The challenge you have is that people view housing as an investment. Americans expect their home values to keep pace with inflation. Because real estate appreciation is one of the few ways left for people to be able to retire somewhat comfortably after working in jobs that pay garbage salaries and having to deal with medical costs that are sky high even with what people call “insurance”.
- rhino369 6y ago
  In California, the only reason people can oppose new projects is because the government enables them to have a say in someone else's property. So you don't have to force development, but you do have to remove NIMBY's ability to veto projects. That starts with reforming permitting processes and zoning regulations.
  - shuckles 6y ago
    Single family zoning, though invented in Berkeley, is a national phenomenon.
  - lazide 6y ago
    ‘Having a say in someone else’s property’ is really ‘voters voting for the rules and laws they want’. As long as the rules benefit most people who vote, why would they want to change it? And right now, that is exactly what is happening - it isn’t changing because most people who vote are benefitting from it. It’s a pretty fundamental part of a democracy. Until either 1) more people who don’t benefit from the current rules change the rules through voting, or 2) some non-democratic (in the sense of not directly answerable to an election) institution such as the courts change some rules, or 3) someone manages to convince the voting bloc to vote against their interests and change the rules, it is what is is. All the handwringing about the situation is just hot air.
    - jandrese 6y ago
      Of course the people who want to move in don't get a vote.
      - lazide 6y ago
        The renters do - but they often don’t vote. And realistically, would you want to be subject to the laws passed by someone who doesn’t live in your area? Even if they say they’d like to? It’s bad enough with things like federal marijuana laws vs state ones, and those don’t control where you can live or what gets built next to where you already do.
- majormajor 6y ago
  That's not the big challenge. Upzoning and higher density increases the value of the land. That's why developers want to do it in the first place. Cashing out when someone wants to buy up your neighborhood's land, and getting something nicer somewhere else, would be the purely-financial play. The big challenge is that people chose to live in a certain place because it had certain features. And people don't want to have to move constantly. So folks pushing to change the nature of the areas will always cause opposition ("why do we have to leave or change, why can't they go somewhere else?").
  - mschuster91 6y ago
    > The big challenge is that people chose to live in a certain place because it had certain features In Germany, the most sought-after features are quality mobile ans landline internet, as well as decent public transit. The problem is that our Conservative politicians outright sabotaged (Kohl with fibre vs cable TV, Schröder with the UMTS frequency auction) or, at best, simply sat doing nothing (Merkel) any efforts to improve this situation. The result? Everyone who can flees for the cities, while the rural areas generally only house those "left behind". And then politicians complain about exploding rents in cities or people leaving rural areas... well, d'oh, who would have thought young people and modern jobs require Internet.
  - Supermancho 6y ago
    > higher density increases the value of the land. That's a very short curve that quickly inverts. Density of commercial land is what converts the sprawl to an unprecedented explosion of high-rises in an epicenter. The residential density decreases the value of the land after it's been fully developed, which is then purchased for commercial use and "redeveloped". This happens in most cities at some point, where downtown is converted to the new "hip" redevelopment of the previous slums.
- Supermancho 6y ago
  > For these reason, they're going to oppose any new supply entering the market. Nobody is opposed to new supply entering the market. The opposition is 100% about the devaluation of the area, which is not about the supply per se. If you wanted to build a block up with 500 units which had adequate parking and everyone's homes/land would increase in value 5%, you would have widespread support. The problem of density is solved with substandard buildings that cut corners, alongside the increased density in Southern California.
- jandrese 6y ago
  It's really impossible to not view your house as an investment when you've been paying for it for 30 years and have hundreds of thousands of dollars tied up in it. This goes double if your plan is to work till retirement, then sell the house and move to someplace more laid back. So really the local government needs to be willing to tell people to pound sand when they hold up new construction. But since the local government is made up of those same people that's not going to happen. It is interesting watching movies and TV just how often the "evil developer" trope appears. Always trying to buy the almost-failed gym/ski slope/TV station/etc... until the plucky underdogs win the contest to save their small business. Developers are never the good guys. They're always the evil gentrifiers who want to let hundreds of families invade the quaint little neighborhood with their high rise eyesore.
  - rcpt 6y ago
    God I'd love to watch some movies where the developers win and kick those little NIMBY orphan shits out on their asses.
    - MrMan 6y ago
      Yeah! Anyone who buys a house is a bad person
- jjav 6y ago
  > The challenge you have is that people view housing as an investment. Is there any source to this claim? "View as investment" would mean people buy the house with the specific aim of making a profit. As a middle aged homeowner in suburbia where all my acquaintances are in the same demographic, I can't think of anyone ever saying they bought a house with the goal to make a profit. People buy a house so the kids have a place to play and to stabilize the housing expenses to make budgeting easier. Whether it can be sold for a profit or not in 40 years is not a consideration.
deleted 6y ago
[deleted]
freewilly1040 6y ago
>>> That’s because as bad as California’s affordable housing problem is, it isn’t really a California problem. It is a national one. From rising homelessness to anti-development sentiment to frustration among middle-class workers who’ve been locked out of the housing market, the same set of housing issues has bubbled up in cities across the country. They’ve already visited Boise, Nashville, Denver and Austin, Texas, and many other high-growth cities. And they will become even more widespread as remote workers move around. The thesis is that the problem is not limited or caused by California, it' a national problem. California and Californian expat-related growth are just a particularly glaring example.
deleted 6y ago
[deleted]
umvi 6y ago
> Thesis of the article: Californians are fleeing California and causing the same housing pressure in the spots they flee to. Anecdotally, it seems true. Utah housing used to be cheap, but now in Salt Lake valley the prices are just exploding as tons of Californians move to the tech hubs near Lehi and SLC and buy up all the houses with cash
- shuckles 6y ago
  If your housing market's affordability depended on everyone living in the area having low incomes, maybe it's not any better than California's housing market.
  - MrMan 6y ago
    It's not better or worse it's just a price

spamizbad 6y ago

The challenge you have is that people view housing as an investment. Americans expect their home values to keep pace with inflation. And because housing values are so expensive, there's a tremendous amount of psychological pressure to "preserve" what they've purchased beyond their own property line (eg: "Neighborhood character"). For these reason, they're going to oppose any new supply entering the market. The only way you're going to fix this problem for good is to have the government step in and force new housing supply into markets, which is going to be extremely unpopular with everyone, including most YIMBYs who would favor removing market barriers. So it's a political impossibility - you can blame it on Boomers but truth is Americans aren't ready to decomodify the housing market.

lisper 6y ago
You're being very unfair here. When you choose a place to live you are not only choosing the structure in which you reside, you are choosing the surrounding environment as well. People's desire to keep the environment from changing too much extends beyond financial interests. I live in a quiet suburban neighborhood, and I want it to remain a quiet suburban neighborhood even if the value of my house drops. In fact, I would love to see the value of my house drop, along with the value of all the houses around me, because that would make it easier for me to move locally and improve some of the sub-optimal features of my current situation, not least of which is that my house is much too big for my needs. But I can't move to a smaller house because the tax hit I would take makes it cost more than I can justify. The smaller houses around me now cost more than our house did when we bought it, so if we move we take both a one-time capital gains hit and an ongoing property tax hit. None of that would happen if houses depreciated like cars. UPDATE: Please take note that I am not saying I have any kind of right to keep my neighborhood from changing, only that my desire to keep it from changing is not purely financial. (In fact, in my case, it is the exact opposite!)
- sokoloff 6y ago
  If your gains are less than $250K (single) or $500K (married-filing-jointly), you've owned it for 2 years, and you've lived there 2 of the last 5 years, your gains are excluded federally. In general, the structure does depreciate very slowly (in real dollars) and the land appreciates in value (at least in desirable areas), typically more than swamping the slight depreciation on the structure.
  - lisper 6y ago
    We live in Northern California. We bought this house at the bottom of the 2008 crash. Our gains are considerably more than the exclusion limit. (One of the many stupid things about the tax code is that the exclusion limit is not indexed to time.)
- cltby 6y ago
  The structure itself does depreciate (ask any landlord!). It's the land value that's surging.
  - lisper 6y ago
    Sure, but the structure and the land are tightly bound. I can't buy or sell a structure without also buying or selling the land that it sits on, so this is kind of irrelevant.
    - shuckles 6y ago
      One of the advantages of non-single family zoning is exactly that it allows us to decouple the two.
    - c22 6y ago
      You absolutely can, but moving structures can get pretty expensive.
  - throwaway0a5e 6y ago
    Commercial structures often appreciate as an area gentrifies and starts using legislation to kick out industrial activity in favor of coffee shops and other consumer facing stuff. So the facilities (and permission to operate them) appreciate like there's no tomorrow.
enraged_camel 6y ago
>> The challenge you have is that people view housing as an investment. Americans expect their home values to keep pace with inflation. Because real estate appreciation is one of the few ways left for people to be able to retire somewhat comfortably after working in jobs that pay garbage salaries and having to deal with medical costs that are sky high even with what people call “insurance”.
rhino369 6y ago
In California, the only reason people can oppose new projects is because the government enables them to have a say in someone else's property. So you don't have to force development, but you do have to remove NIMBY's ability to veto projects. That starts with reforming permitting processes and zoning regulations.
- shuckles 6y ago
  Single family zoning, though invented in Berkeley, is a national phenomenon.
- lazide 6y ago
  ‘Having a say in someone else’s property’ is really ‘voters voting for the rules and laws they want’. As long as the rules benefit most people who vote, why would they want to change it? And right now, that is exactly what is happening - it isn’t changing because most people who vote are benefitting from it. It’s a pretty fundamental part of a democracy. Until either 1) more people who don’t benefit from the current rules change the rules through voting, or 2) some non-democratic (in the sense of not directly answerable to an election) institution such as the courts change some rules, or 3) someone manages to convince the voting bloc to vote against their interests and change the rules, it is what is is. All the handwringing about the situation is just hot air.
  - jandrese 6y ago
    Of course the people who want to move in don't get a vote.
    - lazide 6y ago
      The renters do - but they often don’t vote. And realistically, would you want to be subject to the laws passed by someone who doesn’t live in your area? Even if they say they’d like to? It’s bad enough with things like federal marijuana laws vs state ones, and those don’t control where you can live or what gets built next to where you already do.
majormajor 6y ago
That's not the big challenge. Upzoning and higher density increases the value of the land. That's why developers want to do it in the first place. Cashing out when someone wants to buy up your neighborhood's land, and getting something nicer somewhere else, would be the purely-financial play. The big challenge is that people chose to live in a certain place because it had certain features. And people don't want to have to move constantly. So folks pushing to change the nature of the areas will always cause opposition ("why do we have to leave or change, why can't they go somewhere else?").
- mschuster91 6y ago
  > The big challenge is that people chose to live in a certain place because it had certain features In Germany, the most sought-after features are quality mobile ans landline internet, as well as decent public transit. The problem is that our Conservative politicians outright sabotaged (Kohl with fibre vs cable TV, Schröder with the UMTS frequency auction) or, at best, simply sat doing nothing (Merkel) any efforts to improve this situation. The result? Everyone who can flees for the cities, while the rural areas generally only house those "left behind". And then politicians complain about exploding rents in cities or people leaving rural areas... well, d'oh, who would have thought young people and modern jobs require Internet.
- Supermancho 6y ago
  > higher density increases the value of the land. That's a very short curve that quickly inverts. Density of commercial land is what converts the sprawl to an unprecedented explosion of high-rises in an epicenter. The residential density decreases the value of the land after it's been fully developed, which is then purchased for commercial use and "redeveloped". This happens in most cities at some point, where downtown is converted to the new "hip" redevelopment of the previous slums.
Supermancho 6y ago
> For these reason, they're going to oppose any new supply entering the market. Nobody is opposed to new supply entering the market. The opposition is 100% about the devaluation of the area, which is not about the supply per se. If you wanted to build a block up with 500 units which had adequate parking and everyone's homes/land would increase in value 5%, you would have widespread support. The problem of density is solved with substandard buildings that cut corners, alongside the increased density in Southern California.
jandrese 6y ago
It's really impossible to not view your house as an investment when you've been paying for it for 30 years and have hundreds of thousands of dollars tied up in it. This goes double if your plan is to work till retirement, then sell the house and move to someplace more laid back. So really the local government needs to be willing to tell people to pound sand when they hold up new construction. But since the local government is made up of those same people that's not going to happen. It is interesting watching movies and TV just how often the "evil developer" trope appears. Always trying to buy the almost-failed gym/ski slope/TV station/etc... until the plucky underdogs win the contest to save their small business. Developers are never the good guys. They're always the evil gentrifiers who want to let hundreds of families invade the quaint little neighborhood with their high rise eyesore.
- rcpt 6y ago
  God I'd love to watch some movies where the developers win and kick those little NIMBY orphan shits out on their asses.
  - MrMan 6y ago
    Yeah! Anyone who buys a house is a bad person
jjav 6y ago
> The challenge you have is that people view housing as an investment. Is there any source to this claim? "View as investment" would mean people buy the house with the specific aim of making a profit. As a middle aged homeowner in suburbia where all my acquaintances are in the same demographic, I can't think of anyone ever saying they bought a house with the goal to make a profit. People buy a house so the kids have a place to play and to stabilize the housing expenses to make budgeting easier. Whether it can be sold for a profit or not in 40 years is not a consideration.

deleted 6y ago

[deleted]

freewilly1040 6y ago

>>> That’s because as bad as California’s affordable housing problem is, it isn’t really a California problem. It is a national one. From rising homelessness to anti-development sentiment to frustration among middle-class workers who’ve been locked out of the housing market, the same set of housing issues has bubbled up in cities across the country. They’ve already visited Boise, Nashville, Denver and Austin, Texas, and many other high-growth cities. And they will become even more widespread as remote workers move around. The thesis is that the problem is not limited or caused by California, it' a national problem. California and Californian expat-related growth are just a particularly glaring example.

deleted 6y ago

[deleted]

umvi 6y ago

> Thesis of the article: Californians are fleeing California and causing the same housing pressure in the spots they flee to. Anecdotally, it seems true. Utah housing used to be cheap, but now in Salt Lake valley the prices are just exploding as tons of Californians move to the tech hubs near Lehi and SLC and buy up all the houses with cash

shuckles 6y ago
If your housing market's affordability depended on everyone living in the area having low incomes, maybe it's not any better than California's housing market.
- MrMan 6y ago
  It's not better or worse it's just a price