6 ms·

The most hilarious thing about housing in california is they had a chance to use ADUs to lower housing prices but of course they totally rigged the game by outl

by ty6853 1y ago

The most hilarious thing about housing in california is they had a chance to use ADUs to lower housing prices but of course they totally rigged the game by outlawing splitting off ADUs as a seperate property, meaning all they did was making housing even more expensive because the value of a plot now includes the additional value of the potential to be a landlord but no way to split that value into an economical individual home. They managed to find the one fucking way to make additional housing make being a new homeowner even more expensive, and I believe it was not by accident.

onlyrealcuzzo 1y ago
It is intended that all of the policies make land more expensive... No politician wants more affordable housing in a place where >65% of voters are property owners...
- Ericson2314 1y ago
  It's good for land to become more valuable. We want land prices to go up, and housing prices to go down. All that means is density is increasing faster than land values. Nothing against allowing lot splits, but this is the wrong reason to be for it. The reasoning in the previous to replies reaks of "homeownership is more virtuous than renting" which is not true. And besides, if you really want more homeownership, the most important path forward is condos, and thus condo defect liability reform.
  - deleted 1y ago
    [deleted]
  - ty6853 1y ago
    On its own higher housing density should lower land prices. All else equal land prices are both cause and effect of housing access. In the philosophical extreme, if zoning allowed infinite density you could stick a hong-kong style condo skyscraper for the entire population on 0.1 acres and the rest of the land would provide no additional housing utility pushing prices down to whatever the value it is as farmland/business/recreation. The housing value of surrounding land would plumet. Low land prices are indicative of less restrictive zoning. In more restrictive zoning that punishes building houses on small plots, land becomes more valuable because the land is the license to build a house. i.e. where I live I had to buy more land than I needed because without it I could not build my house, which drives up land prices (increased demand). The reason why california ADU increase parcel prices is because it prints an additional house license while being illegal to split it off. Otherwise you would be left with two cheaper parcels, although in sum they may be more expensive, but you would still pay less for enough land for license to print a house.
    - Ericson2314 1y ago
      > On its own higher housing density should lower land prices. All else equal land prices are both cause and effect of housing access. > > In the philosophical extreme, if zoning allowed infinite density you could stick a hong-kong style condo skyscraper for the entire population on 0.1 acres and the rest of the land would provide no additional housing utility pushing prices down to whatever the value it is as farmland/business/recreation. The housing value of surrounding land would plumet. No I mean the land value of where the density is / right next to it. In your example, the land with the crazy tower / right next to it would be incredibly valuable. If other areas use land value, that's because the land value is being concentrated in/around the dense areas. When we talk about upzoning, we want to not only do less sprawl, but also increase overall population (growth will attract population). The exurbs will loose land value, but the cities will gain immense land value, and the suburbs will gain some land value too.
      - ty6853 1y ago
        At the time of creating the condo the 0.1 acres would be substantial cheaper. If I have thousands or millions of acres to choose from and I can pick whatever 0.1 acres I want my demand for housing is 0.1 acres and the supply is still all the available land. Pushed to the mathematical limit the housing value of the land approaches zero for the land you buy for your hong kong condo, since demand is now near zero and supply far outstrips it. That is, the cost of the 0.1 acres to the developer is about the same as all the worthless for housing land surrounding it. Since a large portion housing is currently locked up in 30 year mortgages in a once in a lifetime COVID era near 0% loan that people will not give up for less than a king's ransom, we should be especially sensitive of price of land for new construction, and that will continue to be a dominant factor in rental costs and home prices.
        Ericson2314 1y ago
        You talking about the average price of all land. I'm talking about the price of built-up land. We're not talking about the same thing. Land in Hong-Kong and Manhattan is more expensive. And arbitrarily tall tour makes its tiny neighborhood of land arbitrary valuable. Your also assuming housing demand is exogenous to land use — e.g. that everyone that would live in SF but can't afford it lives in Tracy. That's not true. If you make SF contain 3.5 million people, at Manhattan density, you better believe we'll not suck all the people out of Palo Alto or Oakland, but also increase demand in those areas. Fremont would have more demand but less so, Pleasanton in not sure, and the central valley exurbs less demand.
  - alexb_ 1y ago
    Big correction: we want the value of land to go up. Under our current systems, this corresponds with the price of land going up, but that does not necessarily have to be the case. Taxation of land values causes the value of land to go up while keeping the price of land down, solving both problems at once.
    - Ericson2314 1y ago
      Oh yes total agreement of course :) But then we would actually be messing with homeowners capital gains, so I was going to bring this up separately. I fear the only way to get rid of prop 13 is to buy out the incumbents, in effect. We will compensate for higher property/land taxes with much higher land values, so the lucky incumbents gains are not threatened, but for later generations, the LVT already started high, and the prices low, and capital gains should not be expected.
- betaby 1y ago
  > No politician wants more affordable housing in a place where >65% of voters are property owners... Despite the fact of living in Canada for 10+ years, where the same argument is repeated. I just don't understand it. I'm originally from the country where >80% of population live in a owner occupied housing. At the same time everyone wants cheaper housing.
gruez 1y ago
>They managed to find the one fucking way to make additional housing make being a new homeowner even more expensive, and I believe it was not by accident. Who cares about "being a new homeowner" (ie. housing as an investment)? I think the far more important thing to care about is housing as a service, ie. being able to find an affordable place to live. Housing is not a great investment. It lags behind equities, isn't diversified, and is an unproductive asset. As such, I'm not going to care too much that people can't get in on the action.
- deleted 1y ago
  [deleted]
- trod1234 1y ago
  > Who cares about .... Secure shelter is a necessary pre-requisite to having and raising children. The low birth-rate is a direct result of disadvantaged capital formation, selection interference, and the chaotic and growingly insecure future economically. Housing is a great and tax favored investment if you know what you are doing. Cash flow is king. That said, rent-seeking behavior is non-productive, and vile in a lot of ways, and equally regulation to address issues is so poorly written that it ends up destroying the market wholesale. If you take a look at the demographics and trends, we may actually end up having a housing surplus within a decade.
  - gruez 1y ago
    >Secure shelter is a necessary pre-requisite to having and raising children. The low birth-rate is a direct result of disadvantaged capital formation, selection interference, and the chaotic and growingly insecure future economically. Housing in Singapore is famously affordable, but it has the lowest birth rates. Same goes for Japan, or other European countries where house prices haven't skyrocketed but birthrates are still plummeting. There's just no good data backing your claim. >Housing is a great and tax favored investment if you know what you are doing. Cash flow is king. Explain. How does a house have better tax treatment and cash flow than buying a vanguard ETF? You might get to deduct your mortgage interest, but you can also deduct margin interest in a brokerage account. I can't see how signing up for a 30year commitment, 20% down payment, and 6% realtor fees is good for cash flow.
asdff 1y ago
There are even models of lot split in CA that they somehow ignore. So many homes all over the place in various municipalities in CA that have had the ~170ft+ deep lot clearly split into sometimes four discrete homes each with their own mailing address on a shared driveway. You can see this readily in some municipalities like Bellflower and others in LA county where a large fraction of the housing stock is already like this in split lots. Yet somehow the legislature has botched this and not made whatever goes on in Bellflower or Hawaiian Gardens or Gardena in terms of their own lot splits by right for elsewhere. I guess these cities don't have enough "clout" to be seen as good examples for lot splits for the state.

by ty6853 1y ago

onlyrealcuzzo 1y ago

It is intended that all of the policies make land more expensive... No politician wants more affordable housing in a place where >65% of voters are property owners...

Ericson2314 1y ago
It's good for land to become more valuable. We want land prices to go up, and housing prices to go down. All that means is density is increasing faster than land values. Nothing against allowing lot splits, but this is the wrong reason to be for it. The reasoning in the previous to replies reaks of "homeownership is more virtuous than renting" which is not true. And besides, if you really want more homeownership, the most important path forward is condos, and thus condo defect liability reform.
- deleted 1y ago
  [deleted]
- ty6853 1y ago
  On its own higher housing density should lower land prices. All else equal land prices are both cause and effect of housing access. In the philosophical extreme, if zoning allowed infinite density you could stick a hong-kong style condo skyscraper for the entire population on 0.1 acres and the rest of the land would provide no additional housing utility pushing prices down to whatever the value it is as farmland/business/recreation. The housing value of surrounding land would plumet. Low land prices are indicative of less restrictive zoning. In more restrictive zoning that punishes building houses on small plots, land becomes more valuable because the land is the license to build a house. i.e. where I live I had to buy more land than I needed because without it I could not build my house, which drives up land prices (increased demand). The reason why california ADU increase parcel prices is because it prints an additional house license while being illegal to split it off. Otherwise you would be left with two cheaper parcels, although in sum they may be more expensive, but you would still pay less for enough land for license to print a house.
  - Ericson2314 1y ago
    > On its own higher housing density should lower land prices. All else equal land prices are both cause and effect of housing access. > > In the philosophical extreme, if zoning allowed infinite density you could stick a hong-kong style condo skyscraper for the entire population on 0.1 acres and the rest of the land would provide no additional housing utility pushing prices down to whatever the value it is as farmland/business/recreation. The housing value of surrounding land would plumet. No I mean the land value of where the density is / right next to it. In your example, the land with the crazy tower / right next to it would be incredibly valuable. If other areas use land value, that's because the land value is being concentrated in/around the dense areas. When we talk about upzoning, we want to not only do less sprawl, but also increase overall population (growth will attract population). The exurbs will loose land value, but the cities will gain immense land value, and the suburbs will gain some land value too.
    - ty6853 1y ago
      At the time of creating the condo the 0.1 acres would be substantial cheaper. If I have thousands or millions of acres to choose from and I can pick whatever 0.1 acres I want my demand for housing is 0.1 acres and the supply is still all the available land. Pushed to the mathematical limit the housing value of the land approaches zero for the land you buy for your hong kong condo, since demand is now near zero and supply far outstrips it. That is, the cost of the 0.1 acres to the developer is about the same as all the worthless for housing land surrounding it. Since a large portion housing is currently locked up in 30 year mortgages in a once in a lifetime COVID era near 0% loan that people will not give up for less than a king's ransom, we should be especially sensitive of price of land for new construction, and that will continue to be a dominant factor in rental costs and home prices.
      - Ericson2314 1y ago
        You talking about the average price of all land. I'm talking about the price of built-up land. We're not talking about the same thing. Land in Hong-Kong and Manhattan is more expensive. And arbitrarily tall tour makes its tiny neighborhood of land arbitrary valuable. Your also assuming housing demand is exogenous to land use — e.g. that everyone that would live in SF but can't afford it lives in Tracy. That's not true. If you make SF contain 3.5 million people, at Manhattan density, you better believe we'll not suck all the people out of Palo Alto or Oakland, but also increase demand in those areas. Fremont would have more demand but less so, Pleasanton in not sure, and the central valley exurbs less demand.
- alexb_ 1y ago
  Big correction: we want the value of land to go up. Under our current systems, this corresponds with the price of land going up, but that does not necessarily have to be the case. Taxation of land values causes the value of land to go up while keeping the price of land down, solving both problems at once.
  - Ericson2314 1y ago
    Oh yes total agreement of course :) But then we would actually be messing with homeowners capital gains, so I was going to bring this up separately. I fear the only way to get rid of prop 13 is to buy out the incumbents, in effect. We will compensate for higher property/land taxes with much higher land values, so the lucky incumbents gains are not threatened, but for later generations, the LVT already started high, and the prices low, and capital gains should not be expected.
betaby 1y ago
> No politician wants more affordable housing in a place where >65% of voters are property owners... Despite the fact of living in Canada for 10+ years, where the same argument is repeated. I just don't understand it. I'm originally from the country where >80% of population live in a owner occupied housing. At the same time everyone wants cheaper housing.

gruez 1y ago

>They managed to find the one fucking way to make additional housing make being a new homeowner even more expensive, and I believe it was not by accident. Who cares about "being a new homeowner" (ie. housing as an investment)? I think the far more important thing to care about is housing as a service, ie. being able to find an affordable place to live. Housing is not a great investment. It lags behind equities, isn't diversified, and is an unproductive asset. As such, I'm not going to care too much that people can't get in on the action.

deleted 1y ago
[deleted]
trod1234 1y ago
> Who cares about .... Secure shelter is a necessary pre-requisite to having and raising children. The low birth-rate is a direct result of disadvantaged capital formation, selection interference, and the chaotic and growingly insecure future economically. Housing is a great and tax favored investment if you know what you are doing. Cash flow is king. That said, rent-seeking behavior is non-productive, and vile in a lot of ways, and equally regulation to address issues is so poorly written that it ends up destroying the market wholesale. If you take a look at the demographics and trends, we may actually end up having a housing surplus within a decade.
- gruez 1y ago
  >Secure shelter is a necessary pre-requisite to having and raising children. The low birth-rate is a direct result of disadvantaged capital formation, selection interference, and the chaotic and growingly insecure future economically. Housing in Singapore is famously affordable, but it has the lowest birth rates. Same goes for Japan, or other European countries where house prices haven't skyrocketed but birthrates are still plummeting. There's just no good data backing your claim. >Housing is a great and tax favored investment if you know what you are doing. Cash flow is king. Explain. How does a house have better tax treatment and cash flow than buying a vanguard ETF? You might get to deduct your mortgage interest, but you can also deduct margin interest in a brokerage account. I can't see how signing up for a 30year commitment, 20% down payment, and 6% realtor fees is good for cash flow.

asdff 1y ago

There are even models of lot split in CA that they somehow ignore. So many homes all over the place in various municipalities in CA that have had the ~170ft+ deep lot clearly split into sometimes four discrete homes each with their own mailing address on a shared driveway. You can see this readily in some municipalities like Bellflower and others in LA county where a large fraction of the housing stock is already like this in split lots. Yet somehow the legislature has botched this and not made whatever goes on in Bellflower or Hawaiian Gardens or Gardena in terms of their own lot splits by right for elsewhere. I guess these cities don't have enough "clout" to be seen as good examples for lot splits for the state.