Powerful opponents have emerged to fight Gov. Jerry Brown’s plan to streamline affordable housing development — and their main reason isn’t about building homes.
To get a subsidized rental unit, so-called affordable housing, in San Francisco it costs a $500,000 investment, a subsidy. $500,000. That means 10 people, it’s $5 million. A hundred people? $5 billion. So you need more housing. There was a time in the 1970s, I think, the median home price in L.A. was like $65,000. So we need more production that will bring, hopefully, the supply is going to bring down the cost. Otherwise, through subsidies and through restrictions, we’re just spending more and more tax dollars and getting very, very little. And the whole program anyway is for very small numbers of people
We also suggest the Legislature consider some modifications to strengthen and expand the Governor’s proposal. Most notably, we suggest the Legislature expand the number of housing projects eligible for streamlined approval by lowering the affordability requirements developers must meet. We also recommend changes to guard against possible actions some communities may take to hinder the use of streamlined approval.
“Hopefully, the supply is going to bring down the cost,” Brown said. “Otherwise, through subsidies and through restrictions, we’re just spending more and more tax dollars and getting very, very little.”
“It is counterproductive to continue providing funding for housing under a system which slows down approvals in areas already vetted and zoned for housing, which only delays development and increases costs,” the revised budget states.
The developments that do get built take years to get through the red tape. In the meantime, more people need homes. The population of Los Angeles topped 4 million for the first time last year. Historically-low interest rates are motivating more people to buy. But inventory is low, as baby boomers stay in their homes longer.
There are broader consequences to urban containment policy. Research has associated urban containment policy with slower metropolitan area employment growth and slower economic growth. Further, during the last decade there was a pronounced net domestic migration toward lower cost housing metropolitan areas from higher cost areas. With their restrictions on development outside the urban footprint, urban containment policies effectively trap people and businesses into higher cost areas, with unintended consequences for the broader economy. – See more at: http://reason.org/news/show/urban-containment-the-social-travel#sthash.jNKWv3Qp.dpuf
The housing market has recovered, but sluggish entry-level construction is putting a squeeze on families that would like to buy their first home. . . It’s a bigger issue at the entry level because builders face tighter margins to begin with. . . For example, consider the typical starter home in California’s Inland Empire, about an hour east of Los Angeles. The FHA loan limit there is $355,350. A typical home might require $70,000 in raw land cost, another $60,000 to develop the land, $100,000 in direct construction costs, and $63,850 in other overhead and selling costs. That brings the total cost to around $294,000. . . Ms. Zelman says impact fees in the Inland Empire now average around $50,000 per home, up from $11,000 in 2005. If this home is going to sell at the FHA limit, the profit—that is, the incentive to build this home—has essentially been washed out by the impact fee.
The remainder of 2015’s population growth, about 100,000, is net migration –the difference between people moving in and moving out. While the state continues to see an inflow of immigrants from other countries, legal and illegal, it loses more people to other states than it gains.
California politicians talk about the housing crisis constantly. But while offering a few token inducements for new construction, they’re unwilling to address the macro issue. . . Not surprisingly, liberal legislators from those cities are unwilling to make the atmospheric changes, such as overhauling the California Environmental Quality Act, we need to encourage more housing and close the widening gap between demand and supply that keeps costs so high.
California’s statewide housing growth, as measured by net unit growth in completed housing units for 2015, was largely flat from the previous year. Although net units were down 3 percent (67,110 net housing units compared to 69,435 net units in 2014), wildfires accounted for most of the decline. The losses to fire were most significant in unincorporated portions of Lake County (1,531) and Calaveras County (549).
The San Francisco Bay Area Renters’ Federation — which goes by the name SFBarf — is suing the city of Lafayette, demanding that it resurrect a scrapped plan to build high-density housing on a 22-acre knoll of Deer Hill Road, just north of Highway 24. It’s the first legal challenge in what SFBarf has promised will be a “Sue the Suburbs” campaign to push places like Lafayette to help the Bay Area build its way out of the shortage of housing.
“What should be alarming to leaders is that our housing is not keeping up with the growth,” Ikhrata said. “We have one of the worst housing affordability rates in the country.”
Exactly how the state’s ambitious goal will be achieved is unclear, and agreement on the price tag is elusive. What is certain is that making homes and other buildings use energy more efficiently will cost money up front, in a state that has some of the country’s most expensive real estate and is struggling to create more affordable housing.
In the first three months of this year, the rate was at 63.5%, not seasonally adjusted. That is down from 63.8% in the fourth quarter of 2015, according to estimates published on Thursday by the Commerce Department. That puts it back near its 48-year low of 63.4% in the second quarter of 2015.