Housing and Transportation – Why California’s Legislature Gets EVERYTHING Wrong

California, the welcoming sanctuary state, has a population on track to break 40 million by the end of this year. Its highway system was designed to handle a population of 20 million. Its cities, bound by legislated “urban containment,” are 3.5 million homes short of what would meet current housing needs. As a result, commuters spend hours stuck in traffic, and millions of homeowners endure indentured servitude to mortgages on ridiculously overpriced homes.

None of this had to happen.

There are many reasons it has come to this, but two causes stand out, because if they were corrected, the problems would be solved in a few years. The first is obvious but very tough to counter – there is a conventional wisdom that most of these damaging policies are necessary to save the planet. But upon examination, almost none of the ones with the worst consequences for housing and transportation were environmentally necessary.

With respect to housing, the environmentalist boogeyman was alleged “sprawl.” But California is a vast, spacious state, including tens of thousands of square miles of semi-arid wasteland that could easily be brought to life if used for housing. California is only five percent urbanized. If that allocation were just increased by half, to a mere 7.5 percent urbanized, ten million new residents could live in new homes on half-acre lots. It is absurd to think there isn’t enough land in California to accommodate this sort of development, which, in any case, would never be […] Read More

California’s Unaffordable “Affordable” Housing Scandal

When discussing the seemingly intractable and growing problem of homeless people living in California, journalists reporting on the issue don’t spend enough time questioning the numbers, much less the policies driving the insane numbers. A recent article in the San Jose Mercury provides a perfect example.

The article gets off to a good start with a provocative, and very informative title. “How much would it cost to house the Bay Area’s homeless? Try $12.7 billion.” Then paragraph two leads off with another bit of vital quantitative information, “With 28,200 homeless residents, the nine-county Bay Area has the fifth-highest concentration of homelessness in the country.”

Ten paragraphs down, the problem is revealed, but not questioned: “By one metric, it would cost $12.7 billion to solve the problem. That’s the price tag to build a new unit of permanent housing for each of the 28,200 residents reported as homeless in the Bay Area in 2017, according to the report. The calculation assumes mid-range construction costs of $450,000 per unit.”

Questions should abound. Four hundred and fifty thousand dollars per person? Why is only one person going to live in each of these subsidized units? And why does a housing unit have to cost nearly a half-million dollars? You can buy a ridiculously overpriced four bedroom home in San Jose for under a million dollars, but you can’t build a studio apartment for less than a half-million? Why?

This isn’t an isolated example. The same problem exists in Los Angeles County, […] Read More

Defining Appropriate Housing Development in California

One of the most frustrating contradictions inherent in the policies being enacted by California’s one-party state goes something like this: We are inviting the welfare cases of America and the expatriates of the world to move here, while simultaneously enacting environmental policies that make it extremely time consuming and expensive to build anything.

No wonder there’s a “housing crisis.” Until demand decreases, or supply increases, housing in California will remain unaffordable for most of its residents. But don’t expect demand to slacken any time soon. The political consensus in favor of increasing California’s population has a strong moral justification – why shouldn’t the wealthy, innovative, compassionate people of California be willing to share their wealth with millions more people who are less fortunate? But there are other less high-minded upsides to population growth and obstacles to new housing.

Currently, real estate prices and rents are on the rise, favoring investors and landlords. Banks enjoy higher lending volumes, while borrowers enjoy greater liquidity, however precarious, as the property bubble offers them more collateral as security. The government agencies profit from higher property tax assessments and higher capital gains collections on sales of real estate. Large land developers that have the political clout and financial heft to build housing despite the many obstacles, enjoy unusually high margins that they could never achieve in a normal competitive market. Finally, as an expanding population increases demand for housing, at the same time public school districts can increase attendance-based revenue – which […] Read More