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Affordable housing in California now routinely tops $1M per apartment to build

158 points by baron816 4y ago

thereisnospork 4y ago
Clearly California should form a committee to require developments containing affordable housing to submit construction cost impact reports, subject to public review and committee approval.
yumraj 4y ago
> will offer two-, three- and four-bedroom apartments for between $1,186 and $2,805 a month Honest question: why does affordable housing needs to be 3 or 4 bedroom? Shouldn't they be mostly Studio and 1-bedroom apartments, and at most, 2-bedroom, that too rarely? 4-bedroom sounds like a luxury apartment and not an affordable apartment.
- djohnston 4y ago
  I dont think bedroom # equates with luxury as long as n < 5.
  - yumraj 4y ago
    It can be a matter of perspective. I go by the necessity -> comfort -> luxury scale. Where, necessity = roof over head. Comfort = a warm, safe place with simple amenities, people sharing bedroom and so on. So, for me, Luxury = anything beyond that, as in no one shares bedroom, guest bedroom and so on.
    - RyEgswuCsn 4y ago
      Just because a beggar is asking for food doesn't mean he is expected to accept even spoiled food, don't you think?
      - lupire 4y ago
        Given budget constraints, better to feed two people a bowl of beans than one person a steak, I think.
        RyEgswuCsn 4y ago
        Better have one happy person vote for you than having two unhappy persons voting for your opponent.
      - leetcrew 4y ago
        having roommates is not akin to eating spoiled food?
- Retric 4y ago
  Families aren’t limited to just a couple with a single kid.
  - bombcar 4y ago
    And even if you allow that there are families with more kids, three bedrooms is kind of a minimum if you put the parents in one, the girls in the second, and the boys in the third. Of course, for many people today kids sharing a bedroom is tantamount to child abuse.
    - yumraj 4y ago
      > Of course, for many people today kids sharing a bedroom is tantamount to child abuse. Well, then they should not be looking for affordable (as in subsidized by other taxpayers) housing, no?
      - bombcar 4y ago
        The problem comes when the legislature decides that it literally is child abuse, and mandates things like minimum bedroom laws (usually aimed at things like frat houses, but the effect can end up the same).
      - thesuitonym 4y ago
        That's easy to say until you consider that the people who need subsidized housing are also the people least likely to be able to attain contraceptives and abortion services.
        lupire 4y ago
        Real question is why a blue state is failing at that.
        rayiner 4y ago
        It’s not. Half of California’s births are from Hispanics, who are more likely to be morally opposed to those things. (And good for them-that’s called winning.)
- msbarnett 4y ago
  Not sleeping a family of 4 to a single room, 19th Century New York Tenement Style, is considered a luxury now?
  - yumraj 4y ago
    For the record, I was referring to 3-4 bedroom, and not 1-2 bedrooms. If one is looking for subsidized housing, isn't kids sharing room a reasonable compromise? Regarding 3-4 bedroom, yes for most of the world they will be luxury.
    - msbarnett 4y ago
      > For most of the world, yes. This is not really true for most values of "most", and the places it is true, the culture tends to be much different than you would find in California, eg) you are generally not looking at children being assigned hours of homework to perform in which they have no space to work on it, nor ability to work on it without distraction while the rest of the family lives on top of them. > If one is looking for subsidized housing, isn't that a reasonable compromise? You may want to look up the history of tenements in the US. Broadly speaking the answer turns out to be: no, this is not a good compromise.
    - lupire 4y ago
      how many bedrooma should a famiy with 4 kids have? What if a grandparent or two lives there? More bedrooms meaning more people makes kitchen and bath more efficient.
- alex_young 4y ago
  According to the USICH [1] there are 271,528 students experiencing homelessness in California. Presumably some of these students would benefit from living in units like these. [1] https://www.usich.gov/homelessness-statistics/ca/ https://www.usich.gov/homelessness-statistics/ca/
- jseliger 4y ago
  The only affordable housing is lots of housing: https://www.brookings.edu/policy2020/bigideas/to-improve-housing-affordability-we-need-better-alignment-of-zoning-taxes-and-subsidies/ https://www.brookings.edu/policy2020/bigideas/to-improve-hou.... From there, people should be able to decide for themselves; "decide for yourself how much housing unit you want to buy" was common, until the '70s: https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-the-1970s/ https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-...
- robonerd 4y ago
  Luxury relative to what, exactly? I think people in America are generally accustomed to one-bedroom-per-child; that's the standard our popular media promotes. I grew up in a family of 5 with a 3 bedroom house; meaning two of us were always sharing a bedroom even as teenagers (we switched up who was sharing every year, meaning none of us had a fixed bedroom.) I think by American standards that was not entirely atypical, but certainly short of luxurious. But you seem to think 3 bedrooms qualifies as luxurious, and don't seem to make any consideration for family size. In some countries, cultures or communities, a family of ten might be living in a single bedroom. Maybe anything more spacious than that should be your standard for luxury. Or further maybe; any shelter that keeps you dry is the bare minimum. If it keeps you dry and warm, that's luxury. Why not? If you get chilly you can use a blanket; furnaces are luxury. Do you really need anything more than a primitive FEMA tent? Running water plumbed straight into your home is a luxury, you can bring a water bucket to a community spigot every day. If you think that's too much work you're just being entitled.
- fshbbdssbbgdd 4y ago
  More bedrooms means the apartment can house more people. While the entire unit is more expensive, it’s probably cheaper per-bedroom. A four-bedroom affordable housing unit could be occupied by a multi-generational household, or maybe a bunch of young adult friends.
- lupire 4y ago
  Legally, a bedroom sleeps at most 2 people.
  - Maursault 4y ago
    Federal occupancy standards require landlords to allow at least 2 persons per bedroom, not limit it to 2.
- idiotsecant 4y ago
  >Shouldn't they be mostly Studio and 1-bedroom apartments No. It's not an intuitive result, but it makes sense when you think about it. Bedrooms are cheap to build. Kitchens and bathrooms are expensive to build. Building 3 units with a total of 3 bedroom, 3 kitchens, and 3 bathrooms is a much less efficient setup than building a 3 bedroom 2 bathroom unit. If you incentivize people to have roomates or co-habitate with extended family by building bigger suites you can make housing cheaper overall.
  - deleted 4y ago
    [deleted]
- ruined 4y ago
  it's single-bed apartments that are the luxury. who do you know that lives alone except single young professionals? everyone else has family or roommates.
- standardUser 4y ago
  There are occupancy requirements. One person cannot rent a 2-bedroom, for example.
Clubber 4y ago
California should just eminent domain all these office buildings that nobody wants to drive to and renovate them for housing. Too bad all the politicians are too corrupt or weak to do anything like that. $1M per apartment, those money buckets must have a lot of leaky holes in them.
- altarius 4y ago
  Possible, but not as cheap and easy as it might seem. https://sfstandard.com/housing-development/turning-downtown-offices-into-housing-isnt-the-solution-you-think-it-is/ https://sfstandard.com/housing-development/turning-downtown-...
- tyoma 4y ago
  Affordable housing has to fight through the same permitting and environmental review process as any other housing. Then there are the lawsuits and planning delays and ballot initiatives by neighbors. Then the housing has to get built, likely with only unionized workers since State money is involved. And it has to follow the same building codes: parking minimums, balconies, mandatory solar panels, etc. With all the barriers involved, its amazing affordable housing gets built at any price.
  - heartbeats 4y ago
    Why don't they just get rid of the process? Hold a referendum to elect the constitution. Assuming it passes, you select a commission of people in charge of it. They get absolute power over anything relating to property - eminent domain, changing zoning laws, and giving building code exemptions. It would only work if there's a democratic majority in favor of it, but if it did, what would be the issue? Then it would be very simple: just buy up some land, start building, and rezone anyone who complains as heavy industry and evict them. I'm of course writing this in jest - hopefully they wouldn't have to be that draconian - but why hasn't anyone tried this? Is there not an electoral majority?
    - qball 4y ago
      >I'm of course writing this in jest - hopefully they wouldn't have to be that draconian - but why hasn't anyone tried this? Is there not an electoral majority? Because the electoral majority is a part of, or gets kickbacks from, the massive amount of bureaucracy! The vast majority of voters own property, and having a constrained supply benefits them, so barring a massive economic crash that wipes out most their property values. Why would they ever change their ways? Clearly, people are still dying to move there, because that's why the prices are so high in the first place- so unless California became the next Detroit (and there are no signs of that so far) they're going to continue.
CobaltFire 4y ago
There are comments here about what "affordable" should mean in the US. I have two kids (1 boy and 1 girl, one special needs) and we live in a two bedroom (850sqft) with the living room doubling as our bedroom so the kids get rooms. When I go visit friends or family that have 3/4/5 bedrooms it feels like a mansion, so I guess what's normal is a function of what you are used to. I will say that the challenges that come from living this small are very different from what my friends and family talk about. This is in SoCal for location reference, and I WFH.
- oneoff786 4y ago
  I’m amused that you start by mentioning affordable and then make no reference to cost
  - CobaltFire 4y ago
    It's SoCal, so cost is relative. It's absolutely ridiculous what things cost here. My place would rent for about $3400 if it hit the market. I think market value is around $1m, and it was built in the 1920's.
- Dma54rhs 4y ago
  I know it doesn't make you feel any better but that size of a home for family of 4 in Europe would be absolutely normal. For me it sounds like the topic is not even about "affordable housing" here anymore.
  - Xylakant 4y ago
    I think that depends on where in Europe you’re located. That’s about 80 sqm if I’m not mistaken and it’s definitely on the lower end for a family of four in Germany, though clearly not outrageously small. (+) Our friends from my wife’s part of the family in eastern Poland happily have flats that many Germans would consider shoeboxes - I’d roughly estimate 2/3rds or less of the size. (+) for example social security rules for flat sizes that need to be paid for are (roughly) 45sqm for the first person, plus 15 sqm for each next, so 4 adults would get up to 90 sqm.
stevesearer 4y ago
In Santa Barbara we just had 31 1-room units built for a total cost of $1.4m. These are spaces to get people off of the streets and are quite basic. https://dignitymoves.org/santa-barbara/ https://dignitymoves.org/santa-barbara/ From what I can tell, the it city and county just went for using emergency rules and bypassed most planning rules (it is on county land). Will be interested to see how it works out.
- TedShiller 4y ago
  > Will be interested to see how it works out Easy to predict: more over-crowding, more pollution, more traffic, lower quality of living for everyone
  - ericmay 4y ago
    Yep. In California, there are two answers: density (no cars, remove highways, etc.) or people need to stop moving there. It’s physics. There is no other way around this.
    - thesuitonym 4y ago
      It doesn't even need to be no cars, just design spaces where people don't need cars.
      - lotsofpulp 4y ago
        It is an either or situation. If you give people the option to use cars, they will use them to drive 20min to a Costco and big grocery store for all their needs. They will also politically support measures that make their lives easier, such as minimum parking and bigger roads which then lead to needing cars. Severely restricting cars is the only way to have viable local businesses tailored to non-car shoppers and political support for advancing non-car infrastructure (i.e. sufficient density for sufficient people to live without cars and support businesses in walking/bicycling distance). The second a road more than 4 small car lanes across gets constructed (or 40ft), you make walking too cumbersome and risky.
SilverBirch 4y ago
> The Terner Center study on the cost to build low-income housing found that projects paying union-level wages to construction workers could cost $50,000 more per apartment and those built to stricter environmental standards cost $17,000 more per apartment than those that aren’t. $1m per apartment. So let’s talk about the cost drivers driving 5% and 1.7% of those costs. Just… wat? Let’s start examining the warts on the rhino charging at you? Also, if your plan to lower the cost of affordable housing is to pay the people who need affordable housing less then I have bad news…
- pclmulqdq 4y ago
  They don't want to address the real cost: the building codes being ridiculous. That would require reducing the amount of regulation. These codes have real cost and they don't necessarily add a lot of quality-of-life for the occupants. Edit - it was pointed out in another thread that affordable housing has to go through the same ridiculous permitting and environmental bureaucracy as other housing. That also costs a ton, probably more than the crazy building codes.
  - idiotsecant 4y ago
    No, building codes are fine. Building codes exist for a reason, and just because you don't know that reason doesn't make them less valid. If you have a particular code example that you think is ridiculous i'd invite discussion on it, you may be surprised how many experts on the subject are floating around.
    - spullara 4y ago
      There are many, but this is an example in CA: All new tenants and new occupancies hereafter constructed, which exceeds 3,600 square feet shall have an approved automatic fire sprinkler system installed throughout.
      - idiotsecant 4y ago
        fire sprinklers are the hill you're going to die on here?
pclmulqdq 4y ago
Can they not spend $1.5 million per unit to build luxury housing and then allow the old luxury housing to become affordable? This kind of economics has worked in the past for housing when we built a lot more units, and it's kind of the natural lifecycle of a building.
- bombcar 4y ago
  The dirty secret is that "affordable housing" is usually a certain number of "dwelling units" in a new development (think apartment building) and so they dump as much as possible of the entire cost of the building into the cost for the "affordable units". If I am building a building with 50 high-end condos, I won't bother making cheaper ones for my affordable units, I'll just designate some as affordable and maybe skimp on the trimmings, but even then probably not much because of the hassle.
  - zdragnar 4y ago
    It's not a dirty secret, it is by design. Having mixed income properties is thought to significantly deter the sort of blight caused by "ghetto projects".
    - opportune 4y ago
      I’m not against mixed income developments as a way to combat ghettoization, but in a lot of cases in CA the costs are born by the developer (and thus indirectly the people purchasing the new units) which keeps the regulatory burden/costs of new developments high. So while it does create some below-market housing for those lucky enough to finagle their way in, it keeps the actual market rate construction expensive. In my opinion it would be better for local governments to buy off the units from developers if they so chose, so the full cost is born by the program. Of course, that wouldn’t really solve the problem unless new construction were less restricted, since not enough is being built anyway for the % of “affordable” units to be able to make much more of a dent. What bothers me is that a lot of people don’t actually know how “affordable housing” is implemented, and if they did I bet most wouldn’t support it. Not only because of the complexity and costs it adds to new market rate construction, but also that you still need an income of like $70-$150k to qualify for owned BMR housing in SF and I don’t really care to subsidize people at those income levels.
lumost 4y ago
Housing construction costs are a nonsensical number to look at. If I’m going to build and sell a 2 million dollar property, I’m not going to spend 100k building a tiny home. Developers need to compete at this price point, the cost of construction is probably a loosely linear function of land value. Land value has been inflated by a puzzling combination of NIMBYs, interest rates, and economic growth.
bombcar 4y ago
If we estimate something like $35k (the poverty line in California) then each affordable house costs twenty eight years of poverty line income; maybe it'd be cheaper to pay them to move far away. Yes, there are obvious problems with this, but the scale is getting out of hand.
- lupire 4y ago
  Poverty like means "regular life is unaffordable" by definition. The solution to "poverty line" is people getting more income, not cheaper housing. "28 years" is still too high, but the units don't compare directly. Use "living wage" income for that.
  - closeparen 4y ago
    Limited housing supply must necessarily be unaffordable to someone. The only question is where we strike the balance between scarcity and abundance, and correspondingly at what income percentile it will be unaffordable. We could also use non market allocation schemes, which would displace the problem of “can’t afford housing” to “stuck on the waiting list” or “my lottery number never comes up.” Same thing in the end.
  - bombcar 4y ago
    Hmm, "living wage" puts a single person at $25k or so in some parts of the country, so it still might be cheaper to just pay them to move away. Doesn't solve the real underlying problem which is that there are too many jobs that need to pay too little.
  - deleted 4y ago
    [deleted]
- seoaeu 4y ago
  And in this proposal who is going to work as baristas, janitors, and delivery drivers?
  - mlyle 4y ago
deleted 4y ago
[deleted]
negamax 4y ago
Surely cost of land is a big part of this amount?
- mirker 4y ago
  Definitely. Housing in LA is not affordable. It would make more sense to build houses in the lowest cost of living area in California.
spicyusername 4y ago
> More than half a dozen affordable housing projects in California are costing more than $1 million per apartment to build A quick summary of the supposed reasons for the high price tag discussed in this article: - increases is labor and material prices - stringent environmental and labor standards - high parking requirements - lengthy local approval processes - bureaucracy to secure financing - [paying] construction workers union-level wages - paying attorneys and consultants to navigate state and local bureaucracies to secure financing - consulting fees and other administrative costs
- idiotsecant 4y ago
  conveniently, they leave out the #1 cause of high construction price. Lack of density. Residential construction gets cheaper the more of it you build in an area. It's possible this is not a popular notion amoung the readers of this article and that's why it was left out but it is in fact the main conclusion of the Terner Center study that they cited.
  - mikeg8 4y ago
    > Residential construction gets cheaper the more of it you build in an area. This is only partially true, currently. It definitely used to be the case that larger developments would leverage economies of scale so that the more you built, the cheaper it cost. But I believe (as someone who works on multi-family housing projects in the Bay area) that we've reached a point where the larger projects do not have that reduced cost advantage because they have more legal/administrative/consulting costs that offset the lower labor/material costs.
    - idiotsecant 4y ago
      Could be, but your conclusion does not match the study quoted in the article. Even in the bay area the cost savings for high density units are substantial.
      - mikeg8 4y ago
smn1234 4y ago
Anecdata from a number of friends in NYC: the mafia controlling much of the market on glass (windows) and other construction materials, along with union jobs costing a premium… with YoY increases because they can, is driving prices much higher than where they should be. Mafia never left. Just transformed
standardUser 4y ago
I worked in the industry for 7 years in California. A big part of it is a race to the "top". If you want to be competitive in winning funding from the 5 or 6 different state/local/federal programs that need to be cobbled together to build a new project, you have to make all of them happy. That means then highest possible LEED certification, on-site resources like computer labs and childcare facilities, plenty of green space, public art, and of course ample parking. That's all above and beyond that already high standards of CA building codes (which, let's not forget, also includes being earthquake-resistant). Most of the new projects I worked on were very nice. Several had community pools. Most had balconies/patios. Most were well connected to transit (a biggie if you want to be competitive with the funding agencies). Virtually all were mixed income and housed families ranging from below the poverty line to 6-figure incomes. I would have happily lived in most of those complexes if they had been geographically desirable, but most were less urban than I prefer. Though I may still be on the waitlist for one particularly well-located building in SF!
- voz_ 4y ago
  > from below the poverty line to 6-figure incomes. In SF, thats the same thing man.
bradleyjg 4y ago
“Affordable housing” is a scam. If you want you want real affordable housing you need market rates that are affordable, not special set aside units.
kristianp 4y ago
Related, lots of things used to be built faster and cheaper than in the modern world: https://patrickcollison.com/fast https://patrickcollison.com/fast
mdavis6890 4y ago
Everybody wants "affordable housing" - but many do not want more people. This is the fundamental disconnect. Many folks just do not want to make it any easier for more people to move in. They would like rents/prices to be lower though. This is how we end up with rent control and tight building restrictions - because it solves both problems. Roll up the drawbridge against new people by blocking development, but then make the housing affordable by fiat. The only remaining problem then is 10 year waitlists to get into one of those rent controlled spaces. Bummer on that...
- Gigachad 4y ago
  Many people do want more people because global populations have been continuously centralizing. Cities have become more dense and rural towns have drained out. People have made this choice on their own.
  - mdavis6890 4y ago
    People want to move to population centers - but many (not all) people in population centers would rather they didn't. So they make it hard to build.
mindvirus 4y ago
Has there been research on subsidized apartments versus paying people the difference and letting them choose where to live? Rather than applying for a subsidized apartment, apply for a $1k-$2k/month rent subsidy from the government and live in market rate units.
- imtringued 4y ago
  Rent subsidy is always better than affordable housing. The government should buy land and lease it out to raise revenue. At some point we can extend it to more people and call it a citizen's dividend.
perryizgr8 4y ago
Let's solve problems created by massive regulation using even more regulation and government involvement. Brilliant idea, why has nobody thought of it earlier??!
- imtringued 4y ago
  Because cutting regulations would require some uncomfortable changes. You would have to tax land and excess liquidity. Nobody wants that. Land ownership redistributes wealth to landowners. Withholding liquidity from the market causes economic downturns and speculative activity. If you solved those two things a lot of politics would become redundant.
diogenescynic 4y ago
Costs for everything are becoming stupidly inflated or just an outright scam for necessities: housing, college education, childcare, food, gasoline, new/used vehicles. America just keeps making things harder and more unsustainable.
stevenjgarner 4y ago
Just a thought: Why not pay the fly-over states to build new housing ($128,868 on average for a new 1,200 sq ft home in Iowa [1]), to accommodate "low-income Californians"? You could tie the expatriate home subsidies to online jobs in California, and reduce your costs to less than 13% of what they are now. Many communities in Iowa have gigabit residential optical Internet, and the cost of living is substantially less than California. It could be great for both the economies of California and Iowa (or wherever). [1] https://www.zenithdesignbuild.com/blog/how-much-does-it-cost-to-build-a-home-in-iowa-with-zenith-design-build-in-2021 https://www.zenithdesignbuild.com/blog/how-much-does-it-cost...
- thorncorona 4y ago
  Who's gonna do all the traditionally low-income jobs?
  - imtringued 4y ago
    The entire point is that they shouldn't be low income.
_uy6i 4y ago
Honestly if it weren’t so depressing I’d enjoy the schadenfreude of watching Californians sacrifice one sacred cow - science (economics), for another - their social mores. I’m constantly amazed by my friends who can get into the minutiae of Covid epidemiology or climate science, can’t or won’t embrace the most rudimentary economic concepts and principles because it conflicts with their social beliefs
- ZeroGravitas 4y ago
  I generally find that when I look into it the 'crazy, communist, californians' are doing stuff that even right-wing parties in Europe take for granted as being a basic part of modern civilization, because its what the relevant experts in the field recommend, so I wouldn't hold my breath waiting for California to collapse into anarchy. This is just a slightly less fanciful trope than the "being nice to gays causes hurricanes" thing. You can tell its not actually believed for similar reasons. If being nice to gay people actually caused hurricanes there's all sorts of useful information we could glean from that and use to make the world better, to fix droughts for example. But the meteorologists weren't the one that noticed this surprising link, were they? It was the people who don't like gay people who spotted it. Similarly, if there was actual useful information about how progressive policy X was bad for progressive goal Z, then people would want to know that information and use it. But weirdly, it's the non-progressives who have all these reasons why progressive stuff is bad for progressives. So you're left in a climate change denial type situation where you need to believe that the whole of academia and government around the world is in cahoots to cover up the truth for unclear reasons. "They're killing all the birds to make expensive unreliable energy and climate change isn't even real!" Well the bird experts, economists, climate and energy folk all think you're wrong but don't let that stop you.
  - _uy6i 4y ago
    Wow kind of a making my case here - you’ve assumed that I have some anti-science position (and why are we talking about gay gay people?) and have said nothing of the sort. when in fact it’s really just that seemingly numerate and intelligent people lose their minds when you point out that any of their pet social goals are in conflict with each other. Like for example, when rich towns have a home sale tax to fund “community preservation” (buying vacant land- decreasing supply), strict zoning codes (no multi-family for example - decrease supply) then also feel the need to have an affordable housing effort (building homes, increase supply). You literally have people in the same town government working at cross purposes! If my local tarot card reader with a healing crystal store doesn’t believe in basic economic theory, not exactly a big shock! But they also don’t exactly purport to be “data driven”
ngcc_hk 4y ago
Any mature and great resident area would be expensive. With network and mostly work at home may be it helps. Otherwise look around it is always expansive for city cf rural … I am not sure there is a solution. When the house value comes down … it is more trouble. Of course $1m is still quite high, btw.
Sparyjerry 4y ago
A $1M house would cost someone about $5,800 per month just to pay a 30 year mortgage at current rates without a down payment and that excludes property taxes, insurance, utilities, repairs, and all the other minor costs that go along with ownership. How can anyone possibly expect to be profitable in the slightest building that housing. Not even luxury housing would be doable at that price. The only return these investors get is from hoping the cost of the property goes up in 10, 20, 30 years, not from the income generated from rent. Companies actually refuse to build in California because what happens when the anti-landlord, anti-profit government decides they don't even deserve enough in rent to stay afloat until they reach those breakeven years 20 years later. The government implements rent control, decides that tenants don't have to pay, decides that tenants can't be evicted if they don't pay, and decides you are the bad guy for being a landlord, or that you are gentrifying the area. There is this assumption some government grant or combination of 5 of them should be the incentive to build there. Why not just allow those properties to actually be profitable an build there - then they would build more housing? Housing built to be affordable housing and those built to be luxury aren't even that different in building costs but you only get incentives if you build the affordable housing. 1000 new units at the top end still increasing overall housing by 1000 units. Instead they incentivize building 1000 units at the bottom end. Why not have the developers actually be the good guys, the hero's that are coming to build housing, sure at their profit but refusing to allow people to become profitable landlords is like saying we don't want more doctors in the world because doctors make too much money. There is an obvious need right now and they sacrifice the entire housing market in order to 'help the poor' but in the end it's a sacrifice. any economist knows that implement pricing controls (like affordable housing) only causes shortages. You have reduced supply because no one wants to build anymore, You have increased demand because everyone wants to pay that lower price. Pricing controls are the biggest disaster in the country and have probably caused more homelessness in their desire to lower prices.
iancmceachern 4y ago
I was looking at a home with property on the central coast, inland a bit. The gentleman had spent the last 20 years building his own little subdivision. He had 10 or so homesites of 1 acre with modular homes on poured foundations. He told me that he would never do it over again. He told me a story about how he was required by law to build an affordable unit for every however many traditional units, so he had to build one. The problem was that the county also said that the maximum acreage for an affordable unit was .5 acres, but the minimum acreage for a septic system was 1 acre. There is no overlap in that venn diagram. So he was stuck there for a while, then the local government organized a meet and greet where he could meet the folks in local government in that county and tell them his troubles with getting his subdivision built. The guy in charge of the affordable housing laws was on one side of him at the table, the septic guy on the other. In that moment each of those men discovered that the venn diagrams did not overlap. Those two functions of government had never talked, and didn't even known that their regulations were mutually exclusive. He said it was a lot of that kind of stuff. What I learned from that whole interaction- don't develop property in California.
- chii 4y ago
  > Those two functions of government had never talked, and didn't even known that their regulations were mutually exclusive. turns out that even in real life, the problem of a company writing internal, incompatible APIs exists.

158 points by baron816 4y ago

Clearly California should form a committee to require developments containing affordable housing to submit construction cost impact reports, subject to public review and committee approval.

yumraj 4y ago

> will offer two-, three- and four-bedroom apartments for between $1,186 and $2,805 a month Honest question: why does affordable housing needs to be 3 or 4 bedroom? Shouldn't they be mostly Studio and 1-bedroom apartments, and at most, 2-bedroom, that too rarely? 4-bedroom sounds like a luxury apartment and not an affordable apartment.

djohnston 4y ago
I dont think bedroom # equates with luxury as long as n < 5.
- yumraj 4y ago
  It can be a matter of perspective. I go by the necessity -> comfort -> luxury scale. Where, necessity = roof over head. Comfort = a warm, safe place with simple amenities, people sharing bedroom and so on. So, for me, Luxury = anything beyond that, as in no one shares bedroom, guest bedroom and so on.
  - RyEgswuCsn 4y ago
    Just because a beggar is asking for food doesn't mean he is expected to accept even spoiled food, don't you think?
    - lupire 4y ago
      Given budget constraints, better to feed two people a bowl of beans than one person a steak, I think.
      - RyEgswuCsn 4y ago
        Better have one happy person vote for you than having two unhappy persons voting for your opponent.
    - leetcrew 4y ago
      having roommates is not akin to eating spoiled food?
Retric 4y ago
Families aren’t limited to just a couple with a single kid.
- bombcar 4y ago
  And even if you allow that there are families with more kids, three bedrooms is kind of a minimum if you put the parents in one, the girls in the second, and the boys in the third. Of course, for many people today kids sharing a bedroom is tantamount to child abuse.
  - yumraj 4y ago
    > Of course, for many people today kids sharing a bedroom is tantamount to child abuse. Well, then they should not be looking for affordable (as in subsidized by other taxpayers) housing, no?
    - bombcar 4y ago
      The problem comes when the legislature decides that it literally is child abuse, and mandates things like minimum bedroom laws (usually aimed at things like frat houses, but the effect can end up the same).
    - thesuitonym 4y ago
      That's easy to say until you consider that the people who need subsidized housing are also the people least likely to be able to attain contraceptives and abortion services.
      - lupire 4y ago
        Real question is why a blue state is failing at that.
        rayiner 4y ago
        It’s not. Half of California’s births are from Hispanics, who are more likely to be morally opposed to those things. (And good for them-that’s called winning.)
msbarnett 4y ago
Not sleeping a family of 4 to a single room, 19th Century New York Tenement Style, is considered a luxury now?
- yumraj 4y ago
  For the record, I was referring to 3-4 bedroom, and not 1-2 bedrooms. If one is looking for subsidized housing, isn't kids sharing room a reasonable compromise? Regarding 3-4 bedroom, yes for most of the world they will be luxury.
  - msbarnett 4y ago
    > For most of the world, yes. This is not really true for most values of "most", and the places it is true, the culture tends to be much different than you would find in California, eg) you are generally not looking at children being assigned hours of homework to perform in which they have no space to work on it, nor ability to work on it without distraction while the rest of the family lives on top of them. > If one is looking for subsidized housing, isn't that a reasonable compromise? You may want to look up the history of tenements in the US. Broadly speaking the answer turns out to be: no, this is not a good compromise.
  - lupire 4y ago
    how many bedrooma should a famiy with 4 kids have? What if a grandparent or two lives there? More bedrooms meaning more people makes kitchen and bath more efficient.
alex_young 4y ago
According to the USICH [1] there are 271,528 students experiencing homelessness in California. Presumably some of these students would benefit from living in units like these. [1] https://www.usich.gov/homelessness-statistics/ca/ https://www.usich.gov/homelessness-statistics/ca/
jseliger 4y ago
The only affordable housing is lots of housing: https://www.brookings.edu/policy2020/bigideas/to-improve-housing-affordability-we-need-better-alignment-of-zoning-taxes-and-subsidies/ https://www.brookings.edu/policy2020/bigideas/to-improve-hou.... From there, people should be able to decide for themselves; "decide for yourself how much housing unit you want to buy" was common, until the '70s: https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-the-1970s/ https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-...
robonerd 4y ago
Luxury relative to what, exactly? I think people in America are generally accustomed to one-bedroom-per-child; that's the standard our popular media promotes. I grew up in a family of 5 with a 3 bedroom house; meaning two of us were always sharing a bedroom even as teenagers (we switched up who was sharing every year, meaning none of us had a fixed bedroom.) I think by American standards that was not entirely atypical, but certainly short of luxurious. But you seem to think 3 bedrooms qualifies as luxurious, and don't seem to make any consideration for family size. In some countries, cultures or communities, a family of ten might be living in a single bedroom. Maybe anything more spacious than that should be your standard for luxury. Or further maybe; any shelter that keeps you dry is the bare minimum. If it keeps you dry and warm, that's luxury. Why not? If you get chilly you can use a blanket; furnaces are luxury. Do you really need anything more than a primitive FEMA tent? Running water plumbed straight into your home is a luxury, you can bring a water bucket to a community spigot every day. If you think that's too much work you're just being entitled.
fshbbdssbbgdd 4y ago
More bedrooms means the apartment can house more people. While the entire unit is more expensive, it’s probably cheaper per-bedroom. A four-bedroom affordable housing unit could be occupied by a multi-generational household, or maybe a bunch of young adult friends.
lupire 4y ago
Legally, a bedroom sleeps at most 2 people.
- Maursault 4y ago
  Federal occupancy standards require landlords to allow at least 2 persons per bedroom, not limit it to 2.
idiotsecant 4y ago
>Shouldn't they be mostly Studio and 1-bedroom apartments No. It's not an intuitive result, but it makes sense when you think about it. Bedrooms are cheap to build. Kitchens and bathrooms are expensive to build. Building 3 units with a total of 3 bedroom, 3 kitchens, and 3 bathrooms is a much less efficient setup than building a 3 bedroom 2 bathroom unit. If you incentivize people to have roomates or co-habitate with extended family by building bigger suites you can make housing cheaper overall.
- deleted 4y ago
  [deleted]
ruined 4y ago
it's single-bed apartments that are the luxury. who do you know that lives alone except single young professionals? everyone else has family or roommates.
standardUser 4y ago
There are occupancy requirements. One person cannot rent a 2-bedroom, for example.

Clubber 4y ago

California should just eminent domain all these office buildings that nobody wants to drive to and renovate them for housing. Too bad all the politicians are too corrupt or weak to do anything like that. $1M per apartment, those money buckets must have a lot of leaky holes in them.

altarius 4y ago
Possible, but not as cheap and easy as it might seem. https://sfstandard.com/housing-development/turning-downtown-offices-into-housing-isnt-the-solution-you-think-it-is/ https://sfstandard.com/housing-development/turning-downtown-...
tyoma 4y ago
Affordable housing has to fight through the same permitting and environmental review process as any other housing. Then there are the lawsuits and planning delays and ballot initiatives by neighbors. Then the housing has to get built, likely with only unionized workers since State money is involved. And it has to follow the same building codes: parking minimums, balconies, mandatory solar panels, etc. With all the barriers involved, its amazing affordable housing gets built at any price.
- heartbeats 4y ago
  Why don't they just get rid of the process? Hold a referendum to elect the constitution. Assuming it passes, you select a commission of people in charge of it. They get absolute power over anything relating to property - eminent domain, changing zoning laws, and giving building code exemptions. It would only work if there's a democratic majority in favor of it, but if it did, what would be the issue? Then it would be very simple: just buy up some land, start building, and rezone anyone who complains as heavy industry and evict them. I'm of course writing this in jest - hopefully they wouldn't have to be that draconian - but why hasn't anyone tried this? Is there not an electoral majority?
  - qball 4y ago
    >I'm of course writing this in jest - hopefully they wouldn't have to be that draconian - but why hasn't anyone tried this? Is there not an electoral majority? Because the electoral majority is a part of, or gets kickbacks from, the massive amount of bureaucracy! The vast majority of voters own property, and having a constrained supply benefits them, so barring a massive economic crash that wipes out most their property values. Why would they ever change their ways? Clearly, people are still dying to move there, because that's why the prices are so high in the first place- so unless California became the next Detroit (and there are no signs of that so far) they're going to continue.

CobaltFire 4y ago

There are comments here about what "affordable" should mean in the US. I have two kids (1 boy and 1 girl, one special needs) and we live in a two bedroom (850sqft) with the living room doubling as our bedroom so the kids get rooms. When I go visit friends or family that have 3/4/5 bedrooms it feels like a mansion, so I guess what's normal is a function of what you are used to. I will say that the challenges that come from living this small are very different from what my friends and family talk about. This is in SoCal for location reference, and I WFH.

oneoff786 4y ago
I’m amused that you start by mentioning affordable and then make no reference to cost
- CobaltFire 4y ago
  It's SoCal, so cost is relative. It's absolutely ridiculous what things cost here. My place would rent for about $3400 if it hit the market. I think market value is around $1m, and it was built in the 1920's.
Dma54rhs 4y ago
I know it doesn't make you feel any better but that size of a home for family of 4 in Europe would be absolutely normal. For me it sounds like the topic is not even about "affordable housing" here anymore.
- Xylakant 4y ago
  I think that depends on where in Europe you’re located. That’s about 80 sqm if I’m not mistaken and it’s definitely on the lower end for a family of four in Germany, though clearly not outrageously small. (+) Our friends from my wife’s part of the family in eastern Poland happily have flats that many Germans would consider shoeboxes - I’d roughly estimate 2/3rds or less of the size. (+) for example social security rules for flat sizes that need to be paid for are (roughly) 45sqm for the first person, plus 15 sqm for each next, so 4 adults would get up to 90 sqm.

stevesearer 4y ago

In Santa Barbara we just had 31 1-room units built for a total cost of $1.4m. These are spaces to get people off of the streets and are quite basic. https://dignitymoves.org/santa-barbara/ https://dignitymoves.org/santa-barbara/ From what I can tell, the it city and county just went for using emergency rules and bypassed most planning rules (it is on county land). Will be interested to see how it works out.

TedShiller 4y ago
> Will be interested to see how it works out Easy to predict: more over-crowding, more pollution, more traffic, lower quality of living for everyone
- ericmay 4y ago
  Yep. In California, there are two answers: density (no cars, remove highways, etc.) or people need to stop moving there. It’s physics. There is no other way around this.
  - thesuitonym 4y ago
    It doesn't even need to be no cars, just design spaces where people don't need cars.
    - lotsofpulp 4y ago
      It is an either or situation. If you give people the option to use cars, they will use them to drive 20min to a Costco and big grocery store for all their needs. They will also politically support measures that make their lives easier, such as minimum parking and bigger roads which then lead to needing cars. Severely restricting cars is the only way to have viable local businesses tailored to non-car shoppers and political support for advancing non-car infrastructure (i.e. sufficient density for sufficient people to live without cars and support businesses in walking/bicycling distance). The second a road more than 4 small car lanes across gets constructed (or 40ft), you make walking too cumbersome and risky.

SilverBirch 4y ago

> The Terner Center study on the cost to build low-income housing found that projects paying union-level wages to construction workers could cost $50,000 more per apartment and those built to stricter environmental standards cost $17,000 more per apartment than those that aren’t. $1m per apartment. So let’s talk about the cost drivers driving 5% and 1.7% of those costs. Just… wat? Let’s start examining the warts on the rhino charging at you? Also, if your plan to lower the cost of affordable housing is to pay the people who need affordable housing less then I have bad news…

pclmulqdq 4y ago
They don't want to address the real cost: the building codes being ridiculous. That would require reducing the amount of regulation. These codes have real cost and they don't necessarily add a lot of quality-of-life for the occupants. Edit - it was pointed out in another thread that affordable housing has to go through the same ridiculous permitting and environmental bureaucracy as other housing. That also costs a ton, probably more than the crazy building codes.
- idiotsecant 4y ago
  No, building codes are fine. Building codes exist for a reason, and just because you don't know that reason doesn't make them less valid. If you have a particular code example that you think is ridiculous i'd invite discussion on it, you may be surprised how many experts on the subject are floating around.
  - spullara 4y ago
    There are many, but this is an example in CA: All new tenants and new occupancies hereafter constructed, which exceeds 3,600 square feet shall have an approved automatic fire sprinkler system installed throughout.
    - idiotsecant 4y ago
      fire sprinklers are the hill you're going to die on here?

pclmulqdq 4y ago

Can they not spend $1.5 million per unit to build luxury housing and then allow the old luxury housing to become affordable? This kind of economics has worked in the past for housing when we built a lot more units, and it's kind of the natural lifecycle of a building.

bombcar 4y ago
The dirty secret is that "affordable housing" is usually a certain number of "dwelling units" in a new development (think apartment building) and so they dump as much as possible of the entire cost of the building into the cost for the "affordable units". If I am building a building with 50 high-end condos, I won't bother making cheaper ones for my affordable units, I'll just designate some as affordable and maybe skimp on the trimmings, but even then probably not much because of the hassle.
- zdragnar 4y ago
  It's not a dirty secret, it is by design. Having mixed income properties is thought to significantly deter the sort of blight caused by "ghetto projects".
  - opportune 4y ago
    I’m not against mixed income developments as a way to combat ghettoization, but in a lot of cases in CA the costs are born by the developer (and thus indirectly the people purchasing the new units) which keeps the regulatory burden/costs of new developments high. So while it does create some below-market housing for those lucky enough to finagle their way in, it keeps the actual market rate construction expensive. In my opinion it would be better for local governments to buy off the units from developers if they so chose, so the full cost is born by the program. Of course, that wouldn’t really solve the problem unless new construction were less restricted, since not enough is being built anyway for the % of “affordable” units to be able to make much more of a dent. What bothers me is that a lot of people don’t actually know how “affordable housing” is implemented, and if they did I bet most wouldn’t support it. Not only because of the complexity and costs it adds to new market rate construction, but also that you still need an income of like $70-$150k to qualify for owned BMR housing in SF and I don’t really care to subsidize people at those income levels.

lumost 4y ago

Housing construction costs are a nonsensical number to look at. If I’m going to build and sell a 2 million dollar property, I’m not going to spend 100k building a tiny home. Developers need to compete at this price point, the cost of construction is probably a loosely linear function of land value. Land value has been inflated by a puzzling combination of NIMBYs, interest rates, and economic growth.

bombcar 4y ago

If we estimate something like $35k (the poverty line in California) then each affordable house costs twenty eight years of poverty line income; maybe it'd be cheaper to pay them to move far away. Yes, there are obvious problems with this, but the scale is getting out of hand.

lupire 4y ago
Poverty like means "regular life is unaffordable" by definition. The solution to "poverty line" is people getting more income, not cheaper housing. "28 years" is still too high, but the units don't compare directly. Use "living wage" income for that.
- closeparen 4y ago
  Limited housing supply must necessarily be unaffordable to someone. The only question is where we strike the balance between scarcity and abundance, and correspondingly at what income percentile it will be unaffordable. We could also use non market allocation schemes, which would displace the problem of “can’t afford housing” to “stuck on the waiting list” or “my lottery number never comes up.” Same thing in the end.
- bombcar 4y ago
  Hmm, "living wage" puts a single person at $25k or so in some parts of the country, so it still might be cheaper to just pay them to move away. Doesn't solve the real underlying problem which is that there are too many jobs that need to pay too little.
- deleted 4y ago
  [deleted]
seoaeu 4y ago
And in this proposal who is going to work as baristas, janitors, and delivery drivers?
- mlyle 4y ago

deleted 4y ago

[deleted]

negamax 4y ago

Surely cost of land is a big part of this amount?

mirker 4y ago
Definitely. Housing in LA is not affordable. It would make more sense to build houses in the lowest cost of living area in California.

spicyusername 4y ago

> More than half a dozen affordable housing projects in California are costing more than $1 million per apartment to build A quick summary of the supposed reasons for the high price tag discussed in this article: - increases is labor and material prices - stringent environmental and labor standards - high parking requirements - lengthy local approval processes - bureaucracy to secure financing - [paying] construction workers union-level wages - paying attorneys and consultants to navigate state and local bureaucracies to secure financing - consulting fees and other administrative costs

idiotsecant 4y ago
conveniently, they leave out the #1 cause of high construction price. Lack of density. Residential construction gets cheaper the more of it you build in an area. It's possible this is not a popular notion amoung the readers of this article and that's why it was left out but it is in fact the main conclusion of the Terner Center study that they cited.
- mikeg8 4y ago
  > Residential construction gets cheaper the more of it you build in an area. This is only partially true, currently. It definitely used to be the case that larger developments would leverage economies of scale so that the more you built, the cheaper it cost. But I believe (as someone who works on multi-family housing projects in the Bay area) that we've reached a point where the larger projects do not have that reduced cost advantage because they have more legal/administrative/consulting costs that offset the lower labor/material costs.
  - idiotsecant 4y ago
    Could be, but your conclusion does not match the study quoted in the article. Even in the bay area the cost savings for high density units are substantial.
    - mikeg8 4y ago

smn1234 4y ago

Anecdata from a number of friends in NYC: the mafia controlling much of the market on glass (windows) and other construction materials, along with union jobs costing a premium… with YoY increases because they can, is driving prices much higher than where they should be. Mafia never left. Just transformed

standardUser 4y ago

I worked in the industry for 7 years in California. A big part of it is a race to the "top". If you want to be competitive in winning funding from the 5 or 6 different state/local/federal programs that need to be cobbled together to build a new project, you have to make all of them happy. That means then highest possible LEED certification, on-site resources like computer labs and childcare facilities, plenty of green space, public art, and of course ample parking. That's all above and beyond that already high standards of CA building codes (which, let's not forget, also includes being earthquake-resistant). Most of the new projects I worked on were very nice. Several had community pools. Most had balconies/patios. Most were well connected to transit (a biggie if you want to be competitive with the funding agencies). Virtually all were mixed income and housed families ranging from below the poverty line to 6-figure incomes. I would have happily lived in most of those complexes if they had been geographically desirable, but most were less urban than I prefer. Though I may still be on the waitlist for one particularly well-located building in SF!

voz_ 4y ago
> from below the poverty line to 6-figure incomes. In SF, thats the same thing man.

bradleyjg 4y ago

“Affordable housing” is a scam. If you want you want real affordable housing you need market rates that are affordable, not special set aside units.

kristianp 4y ago

Related, lots of things used to be built faster and cheaper than in the modern world: https://patrickcollison.com/fast https://patrickcollison.com/fast

mdavis6890 4y ago

Everybody wants "affordable housing" - but many do not want more people. This is the fundamental disconnect. Many folks just do not want to make it any easier for more people to move in. They would like rents/prices to be lower though. This is how we end up with rent control and tight building restrictions - because it solves both problems. Roll up the drawbridge against new people by blocking development, but then make the housing affordable by fiat. The only remaining problem then is 10 year waitlists to get into one of those rent controlled spaces. Bummer on that...

Gigachad 4y ago
Many people do want more people because global populations have been continuously centralizing. Cities have become more dense and rural towns have drained out. People have made this choice on their own.
- mdavis6890 4y ago
  People want to move to population centers - but many (not all) people in population centers would rather they didn't. So they make it hard to build.

mindvirus 4y ago

Has there been research on subsidized apartments versus paying people the difference and letting them choose where to live? Rather than applying for a subsidized apartment, apply for a $1k-$2k/month rent subsidy from the government and live in market rate units.

imtringued 4y ago
Rent subsidy is always better than affordable housing. The government should buy land and lease it out to raise revenue. At some point we can extend it to more people and call it a citizen's dividend.

perryizgr8 4y ago

Let's solve problems created by massive regulation using even more regulation and government involvement. Brilliant idea, why has nobody thought of it earlier??!

imtringued 4y ago
Because cutting regulations would require some uncomfortable changes. You would have to tax land and excess liquidity. Nobody wants that. Land ownership redistributes wealth to landowners. Withholding liquidity from the market causes economic downturns and speculative activity. If you solved those two things a lot of politics would become redundant.

diogenescynic 4y ago

Costs for everything are becoming stupidly inflated or just an outright scam for necessities: housing, college education, childcare, food, gasoline, new/used vehicles. America just keeps making things harder and more unsustainable.

stevenjgarner 4y ago

Just a thought: Why not pay the fly-over states to build new housing ($128,868 on average for a new 1,200 sq ft home in Iowa [1]), to accommodate "low-income Californians"? You could tie the expatriate home subsidies to online jobs in California, and reduce your costs to less than 13% of what they are now. Many communities in Iowa have gigabit residential optical Internet, and the cost of living is substantially less than California. It could be great for both the economies of California and Iowa (or wherever). [1] https://www.zenithdesignbuild.com/blog/how-much-does-it-cost-to-build-a-home-in-iowa-with-zenith-design-build-in-2021 https://www.zenithdesignbuild.com/blog/how-much-does-it-cost...

thorncorona 4y ago
Who's gonna do all the traditionally low-income jobs?
- imtringued 4y ago
  The entire point is that they shouldn't be low income.

_uy6i 4y ago

Honestly if it weren’t so depressing I’d enjoy the schadenfreude of watching Californians sacrifice one sacred cow - science (economics), for another - their social mores. I’m constantly amazed by my friends who can get into the minutiae of Covid epidemiology or climate science, can’t or won’t embrace the most rudimentary economic concepts and principles because it conflicts with their social beliefs

ZeroGravitas 4y ago
I generally find that when I look into it the 'crazy, communist, californians' are doing stuff that even right-wing parties in Europe take for granted as being a basic part of modern civilization, because its what the relevant experts in the field recommend, so I wouldn't hold my breath waiting for California to collapse into anarchy. This is just a slightly less fanciful trope than the "being nice to gays causes hurricanes" thing. You can tell its not actually believed for similar reasons. If being nice to gay people actually caused hurricanes there's all sorts of useful information we could glean from that and use to make the world better, to fix droughts for example. But the meteorologists weren't the one that noticed this surprising link, were they? It was the people who don't like gay people who spotted it. Similarly, if there was actual useful information about how progressive policy X was bad for progressive goal Z, then people would want to know that information and use it. But weirdly, it's the non-progressives who have all these reasons why progressive stuff is bad for progressives. So you're left in a climate change denial type situation where you need to believe that the whole of academia and government around the world is in cahoots to cover up the truth for unclear reasons. "They're killing all the birds to make expensive unreliable energy and climate change isn't even real!" Well the bird experts, economists, climate and energy folk all think you're wrong but don't let that stop you.
- _uy6i 4y ago
  Wow kind of a making my case here - you’ve assumed that I have some anti-science position (and why are we talking about gay gay people?) and have said nothing of the sort. when in fact it’s really just that seemingly numerate and intelligent people lose their minds when you point out that any of their pet social goals are in conflict with each other. Like for example, when rich towns have a home sale tax to fund “community preservation” (buying vacant land- decreasing supply), strict zoning codes (no multi-family for example - decrease supply) then also feel the need to have an affordable housing effort (building homes, increase supply). You literally have people in the same town government working at cross purposes! If my local tarot card reader with a healing crystal store doesn’t believe in basic economic theory, not exactly a big shock! But they also don’t exactly purport to be “data driven”

ngcc_hk 4y ago

Any mature and great resident area would be expensive. With network and mostly work at home may be it helps. Otherwise look around it is always expansive for city cf rural … I am not sure there is a solution. When the house value comes down … it is more trouble. Of course $1m is still quite high, btw.

Sparyjerry 4y ago

A $1M house would cost someone about $5,800 per month just to pay a 30 year mortgage at current rates without a down payment and that excludes property taxes, insurance, utilities, repairs, and all the other minor costs that go along with ownership. How can anyone possibly expect to be profitable in the slightest building that housing. Not even luxury housing would be doable at that price. The only return these investors get is from hoping the cost of the property goes up in 10, 20, 30 years, not from the income generated from rent. Companies actually refuse to build in California because what happens when the anti-landlord, anti-profit government decides they don't even deserve enough in rent to stay afloat until they reach those breakeven years 20 years later. The government implements rent control, decides that tenants don't have to pay, decides that tenants can't be evicted if they don't pay, and decides you are the bad guy for being a landlord, or that you are gentrifying the area. There is this assumption some government grant or combination of 5 of them should be the incentive to build there. Why not just allow those properties to actually be profitable an build there - then they would build more housing? Housing built to be affordable housing and those built to be luxury aren't even that different in building costs but you only get incentives if you build the affordable housing. 1000 new units at the top end still increasing overall housing by 1000 units. Instead they incentivize building 1000 units at the bottom end. Why not have the developers actually be the good guys, the hero's that are coming to build housing, sure at their profit but refusing to allow people to become profitable landlords is like saying we don't want more doctors in the world because doctors make too much money. There is an obvious need right now and they sacrifice the entire housing market in order to 'help the poor' but in the end it's a sacrifice. any economist knows that implement pricing controls (like affordable housing) only causes shortages. You have reduced supply because no one wants to build anymore, You have increased demand because everyone wants to pay that lower price. Pricing controls are the biggest disaster in the country and have probably caused more homelessness in their desire to lower prices.

iancmceachern 4y ago

I was looking at a home with property on the central coast, inland a bit. The gentleman had spent the last 20 years building his own little subdivision. He had 10 or so homesites of 1 acre with modular homes on poured foundations. He told me that he would never do it over again. He told me a story about how he was required by law to build an affordable unit for every however many traditional units, so he had to build one. The problem was that the county also said that the maximum acreage for an affordable unit was .5 acres, but the minimum acreage for a septic system was 1 acre. There is no overlap in that venn diagram. So he was stuck there for a while, then the local government organized a meet and greet where he could meet the folks in local government in that county and tell them his troubles with getting his subdivision built. The guy in charge of the affordable housing laws was on one side of him at the table, the septic guy on the other. In that moment each of those men discovered that the venn diagrams did not overlap. Those two functions of government had never talked, and didn't even known that their regulations were mutually exclusive. He said it was a lot of that kind of stuff. What I learned from that whole interaction- don't develop property in California.

chii 4y ago
> Those two functions of government had never talked, and didn't even known that their regulations were mutually exclusive. turns out that even in real life, the problem of a company writing internal, incompatible APIs exists.