No newsflash here: San Francisco, after recently beating out Manhattan for both price and scarcity of offerings, has been crowned the worst city in the country for renters. But according to Forbes, the second worst city is not Manhattan. It’s Oakland. And the third worst: San Jose.
The legal issue isn’t solely about housing, but about whether cities have unlimited power to extract concessions from homebuilders for things that are not “impacts” from the project. In other words, it’s legitimate for government to require new developments to pay to mitigate the effect of the new residents on local infrastructure (roads, sewers, fire service), but is it OK for cities to require affordable housing just because officials want to see more of it built?
In both the Bay Area and Southern California, plans are now being set to force the building of massive new towers in a few selected “transit-oriented” zones. In a bow to political realities, the planners say they won’t bring superdensity to the single-family neighborhoods beloved by Californians; the wealthy – including those who bought early and those with access to inherited money – will still be able to enjoy backyard play sets, barbecues and swimming pools.
“High student debt, poor job prospects and shifting attitudes are inhibiting homeownership among younger Americans who came of age during the latest recession, potentially hindering the accumulation of wealth for that generation, Federal Reserve governor Lael Brainard said Thursday. “If the decline in homeownership among young people proves persistent, the implications for asset building for the future could be of concern, since homeownership remains an important avenue for accumulating wealth, particularly for those with limited means,” Ms. Brainard said in remarks prepared for a community development research conference.”
Real estate firm Redfin says the median selling price in February in San Francisco was up 16.2 percent from a year ago, to $979,750. And people are buying them. Closed residential sales in San Francisco were up 12 percent from February 2014.
California’s new energy efficiency regulations, which started being enforced last summer, dramatically boost costs for owners of older homes when they need major maintenance on their systems for heating, ventilation and air conditioning. That’s because ducts must be “R-8” insulated and certified to be free of leaks, a standard that can force total replacement for many houses built before 2008. . . The Energy Commission has also mandated construction industry software with epic performance problems. This is devouring dollars across the industry, as well as reducing the efficiency of new homes and commercial buildings.
In the postwar era, developed economies have experienced two substantial trends in the net capital share of aggregate income: a rise during the last several decades, which is well-known, and a fall of comparable magnitude that continued until the 1970s, which is less well-known. Overall, the net capital share has increased since 1948, but when disaggregated this increase comes entirely from the housing sector: the contribution to net capital income from all other sectors has been zero or slightly negative, as the fall and rise have offset each other.
Living in decent, affordable, and reasonably located housing is vitally important to every Californian. Unfortunately, housing in California is extremely expensive and, as a result, many households are forced to make serious trade-offs in order to live here. While many factors have a role in driving California’s high housing costs, the most important is the significant shortage of housing in the state’s highly coveted coastal communities. We advise the Legislature to address this housing shortfall by changing policies to facilitate significantly more private home and apartment building in California’s coastal urban communities.
The state that had earlier earned its own “California Dream” label now limits the dream of homeownership principally to people either fortunate enough to have purchased their homes years ago and to the more affluent. Many middle income residents may have to face the choice of renting permanently or moving away.
The cost of housing — and concerns about commutes — are causing anxiety among Jindal’s clients. He recently had to revise a deal that involved recruiting a crack team of hackers for projects in Silicon Valley. Instead, partially based on the projected cost to lure them, he was forced to export the projects — and the cash infusion it would have meant locally — to a coding team in Dallas and Charlotte. . . “It’s very difficult. I just lost three servers to Texas, and one cook and a busboy to Oregon,” Rocca said. “They can’t make enough money to get ahead, so they spend every dime they make. So they left. They just didn’t like that.”
The San Francisco metro area – where the $952,162 median home price is more than twice the state median – seems to have all the symptoms that the state’s legislative analyst office says causes a housing sickness across California’s coastal cities. High housing costs in those cities are caused by insufficient supply, which are in turn caused by community resistance, environmental objections and scarce land.
“California’s unfortunate evolution into a society of haves and have-nots has many root causes, but a highly distorted housing market looms very large. We have the nation’s second highest home prices (only Hawaii is higher) and, not surprisingly, its third lowest level of homeownership.”
California’s high housing costs are crimping economic productivity, increasing poverty rates, lowering homeownership, increasing crowding and lengthening commute times, a new state report says.
Paradoxically, perhaps the city’s biggest strength is its sprawl. Unlike most other big cities in America, Houston has no zoning code, so it is quick to respond to demand for housing and office space. Last year authorities in the Houston metropolitan area, with a population of 6.2m, issued permits to build 64,000 homes. The entire state of California, with a population of 39m, issued just 83,000. Houston’s reliance on the car and air-conditioning is environmentally destructive and unattractive to well-off singletons. But for families on moderate incomes, it is a place to live well cheaply.
Assembly Speaker Toni Atkins announced a sweeping affordable housing plan Tuesday that would impose new real estate fees and expand tax credits as a way to house the needy.