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What is the end solution to this housing crisis? The solutions will all hurt existing homeowners or multi-homeowners and are not likely to be implemented. The d

What is the end solution to this housing crisis? The solutions will all hurt existing homeowners or multi-homeowners and are not likely to be implemented. The duplex in a single family lot is not going to move the needle on this crisis much, as building 2 houses on a existing lot will require a teardown of the original structure, then a buildup of the new duplex, all very costly. It will run at least $500K+ and I don't see many middle class owners using this route, also construction workers are scarce in the state due to high housing costs. What would truly fix things right away: #1. Prohibit Companies/Entities/hedgefunds from buying houses and renting them, ala zillow, blackrock etc. #2. Repeal CA prop. 13, all housing should be taxed at current market value. (exclusions for older retirees and the disabled) #3. Homeowners that wish to own a second property should be taxed at a very high rate. #4. Mandate real estate commissions to be halved, currently its 6%(3% buyer, 3% seller) it should be closer to 3% total, this would allow greater mobility and encourage more buying and selling of houses. #5. Rezone unused commercial(3 years unused) to residential to allow for more units to be built. None of these solutions above would change the makeup of a neighborhood by introducing high density housing which some owners don't want, and could easily be implemented by a few laws being crafted and passed. I bet 10-15% of the housing market would free up right away and prices would come down 20-30% within a year or two. But the root of the problem is just the people who are intentionally moving to southern California due to the mild climate. They know how crowded and dry[lack of water](and also expensive) it is but move here anyways contributing to the congestion. They don't want to move to other areas even when there are jobs there, and this issue will always be there.

dmode 5y ago
Two things I would add to your list: - CEQA reform to now allow single individuals to hold up project - State level zoning guidance (similar to SB 9 / SB 50), where if a developer meets certain zoning guidance, local communities cannot oppose
- subsubzero 5y ago
  yeah good mention, I would def. add that as the state currently lets these phony "environmental" concerns prevent housing from being built.
givemeethekeys 5y ago
My thoughts on the above list: #1 will be challenged in court the highest level. Think "corporations are people". #2 will pass only if a majority of California residents are renters and decide that they want to band together on this one issue. #3 could work since it would ensure support from people who are currently renting but want to buy a home soon. #4 is small compared to how much home prices appreciate. The real problem is supply. #5 this would open up more space for residential development. If it is zoned mix-use with a mandate for minimum density, then it could definitely add more supply.
SkeuomorphicBee 5y ago
A much better alternative for #1: simply improve tenant protections so much that renting out a property becomes a bad investment (to risky).
- bluGill 5y ago
  That forces people who shouldn't own a house to buy one. Renting vs buying as which is a better investment is a complex calculation, but for some people renting is clearly better, and you have just ensured they are forced to make a bad investment.
- hyuuu 5y ago
  it's already pretty bad in tenant friendly areas and that's why those areas have severe housing crisis, not just in the Bay Area. Here is a more recent example: https://reason.com/2021/11/10/developers-halt-projects-mayor-demands-reform-after-st-paul-voters-approve-radical-rent-control-ballot-initiative/ https://reason.com/2021/11/10/developers-halt-projects-mayor... you'd want to incentivize the private market to purchase, maintain, market to distribute housing to the masses and the government does that through favorable taxes. Making them unprofitable would put the burden on the renters + government with no private money capital injection.
Dylan16807 5y ago
> #2. Repeal CA prop. 13, all housing should be taxed at current market value. (exclusions for older retirees and the disabled) Why the exclusions? Is there a reason to give extra help for the disabled to own homes (and, implicitly, not help disabled renters a similar amount)? Older retirees could sell off a third of their house's value and cover property taxes for something like 20 years.
- subsubzero 5y ago
  Trying not to throw the older/helpless out into the street. Its no fault of theirs that the house they own increased from $40k to $3M(know 2 elderly people in this exact situation) and they would now incur a gigantic tax bill(if prop-13 was repealed). They could sell but would most likely be forced to move out of the area and away from all family/community and would be devastating to a person of advanced age or who was disabled. Also the thinking would be "oh they will have so much money!", #1 the majority of the windfall would be taxed at max tax rate, and #2 I imagine people preying on these forced out older "millionaires" ie. family members and con artists.
  - abduhl 5y ago
    Who cares if they're taxed at the max tax rate? One of the main effects of repealing Prop 13 would be to start actually collecting taxes. I don't think that the fact that people who are forced out (because they can't pay their yearly taxes) now have to pay taxes, which they CAN pay because they're now liquid, something we should be concerned about after making the decision to repeal Prop 13? Old people get a lot of protections. Protections they put in place themselves. Prop 13 is one of those protections. Perpetuating it just means that the protections will never go away. Maybe they can just move in with their children - the ones that are apparently a driving factor of why they can't leave the region.
    - treeman79 5y ago
      California collects plenty of taxes. It doesn’t need more. It’ll just blow it on more trains that don’t run or such. 100% tax rate would not be enough for many politicians.
ErikCorry 5y ago
4 out of your 5 suggestions don't improve supply, which means they probably won't move the needle much. (At least #2 might allow some existing empty buildings to enter the active housing market.)
deepakhj 5y ago
SB9 and SB10 are meant to be small improvements. It's understood it won't completely solve the crisis. SB50 would have made a big impact but it didn't pass. Prop 13 can easily be fixed by a) Limiting it to primary homes. b) Removing it from commercial properties. c) Make it means based and if the homeowner can't afford the taxes, tally it up and assess it at death or final sale w/o an equivalent purchase. You can see how subsidies work due to prop 13 in the map here https://www.taxfairnessproject.org/ https://www.taxfairnessproject.org/.
kwere 5y ago
#6. limit foreign (even other states) residential real estate investments. (exception maybe for high density ones)

dmode 5y ago

Two things I would add to your list: - CEQA reform to now allow single individuals to hold up project - State level zoning guidance (similar to SB 9 / SB 50), where if a developer meets certain zoning guidance, local communities cannot oppose

subsubzero 5y ago
yeah good mention, I would def. add that as the state currently lets these phony "environmental" concerns prevent housing from being built.

givemeethekeys 5y ago

My thoughts on the above list: #1 will be challenged in court the highest level. Think "corporations are people". #2 will pass only if a majority of California residents are renters and decide that they want to band together on this one issue. #3 could work since it would ensure support from people who are currently renting but want to buy a home soon. #4 is small compared to how much home prices appreciate. The real problem is supply. #5 this would open up more space for residential development. If it is zoned mix-use with a mandate for minimum density, then it could definitely add more supply.

SkeuomorphicBee 5y ago

A much better alternative for #1: simply improve tenant protections so much that renting out a property becomes a bad investment (to risky).

bluGill 5y ago
That forces people who shouldn't own a house to buy one. Renting vs buying as which is a better investment is a complex calculation, but for some people renting is clearly better, and you have just ensured they are forced to make a bad investment.
hyuuu 5y ago
it's already pretty bad in tenant friendly areas and that's why those areas have severe housing crisis, not just in the Bay Area. Here is a more recent example: https://reason.com/2021/11/10/developers-halt-projects-mayor-demands-reform-after-st-paul-voters-approve-radical-rent-control-ballot-initiative/ https://reason.com/2021/11/10/developers-halt-projects-mayor... you'd want to incentivize the private market to purchase, maintain, market to distribute housing to the masses and the government does that through favorable taxes. Making them unprofitable would put the burden on the renters + government with no private money capital injection.

Dylan16807 5y ago

> #2. Repeal CA prop. 13, all housing should be taxed at current market value. (exclusions for older retirees and the disabled) Why the exclusions? Is there a reason to give extra help for the disabled to own homes (and, implicitly, not help disabled renters a similar amount)? Older retirees could sell off a third of their house's value and cover property taxes for something like 20 years.

subsubzero 5y ago
Trying not to throw the older/helpless out into the street. Its no fault of theirs that the house they own increased from $40k to $3M(know 2 elderly people in this exact situation) and they would now incur a gigantic tax bill(if prop-13 was repealed). They could sell but would most likely be forced to move out of the area and away from all family/community and would be devastating to a person of advanced age or who was disabled. Also the thinking would be "oh they will have so much money!", #1 the majority of the windfall would be taxed at max tax rate, and #2 I imagine people preying on these forced out older "millionaires" ie. family members and con artists.
- abduhl 5y ago
  Who cares if they're taxed at the max tax rate? One of the main effects of repealing Prop 13 would be to start actually collecting taxes. I don't think that the fact that people who are forced out (because they can't pay their yearly taxes) now have to pay taxes, which they CAN pay because they're now liquid, something we should be concerned about after making the decision to repeal Prop 13? Old people get a lot of protections. Protections they put in place themselves. Prop 13 is one of those protections. Perpetuating it just means that the protections will never go away. Maybe they can just move in with their children - the ones that are apparently a driving factor of why they can't leave the region.
  - treeman79 5y ago
    California collects plenty of taxes. It doesn’t need more. It’ll just blow it on more trains that don’t run or such. 100% tax rate would not be enough for many politicians.

ErikCorry 5y ago

4 out of your 5 suggestions don't improve supply, which means they probably won't move the needle much. (At least #2 might allow some existing empty buildings to enter the active housing market.)

deepakhj 5y ago

SB9 and SB10 are meant to be small improvements. It's understood it won't completely solve the crisis. SB50 would have made a big impact but it didn't pass. Prop 13 can easily be fixed by a) Limiting it to primary homes. b) Removing it from commercial properties. c) Make it means based and if the homeowner can't afford the taxes, tally it up and assess it at death or final sale w/o an equivalent purchase. You can see how subsidies work due to prop 13 in the map here https://www.taxfairnessproject.org/ https://www.taxfairnessproject.org/.

kwere 5y ago

#6. limit foreign (even other states) residential real estate investments. (exception maybe for high density ones)