Tag Archive for: unaffordable housing

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 that expansive.

The problem with urban containment policies, set to get worse with the likely passage of SB 50, is the lack of balance. Increasing housing density in the urban core of cities is normal and inevitable. It is part of the natural evolution of all cities. But doing that without also permitting the outer footprint of cities to expand is destructive. Population growth that the urban core can’t absorb overflows into tranquil residential neighborhoods and destroys them. It ruins established low density communities, making them fodder for predatory investors and government rehousing schemes.

Environmentalists counter that housing must be near the jobs, and jobs must be near the housing. Notwithstanding the historical amnesia that must be making them unaware of how jobs and housing naturally flow to wherever new land development occurs, these objections ignore the future of transportation. There is no transportation conveyance more versatile than wheeled vehicles, no transportation conduit more versatile than roads.

What are quaintly still referred to as “cars” are on the brink of stupefying transformations. Vehicles over the next few decades will evolve to drive themselves, “convoy” in “hyperlanes” at very high speeds, operate as on-demand shared vehicles, public and private mini buses and full size busses; some of them will be mobile offices, conference rooms and hotel rooms; some of them will even fly. There is monumental folly in allocating funds for light rail and high speed rail, when car of the 2050 will be as dissimilar to the car of 1950 as an eagle is to a fruit fly.

There are other arguments for roads over rail. The supposedly lighter environmental footprint of rail is overstated, since it has to exist as an entire parallel transportation network that still requires cars and roads for anyone to get to the rail stops, or get to their destinations after they disembark. And the supposedly heavier environmental footprint of cars diminishes every year, as we enter the electric age, as cars become far more energy efficient, as their AI facilitates heavier road density at speed, and as more people share them.

As for other enabling infrastructure, it’s time that anyone willing to challenge the environmentalist fallacies that preclude development of civil assets such as roads, water projects, and nuclear power plants also challenge the supposed financial obstacles. One of the primary reasons California doesn’t have billions each year to spend on infrastructure is because, statewide, they’re pouring over $30 billion each year into state/local public employee pension funds – an amount set to double by 2025. Then, of the nearly $800 billion that California’s 83 state/local pension funds have invested, less than 10 percent is invested in California. Require 10 percent to go into public/private revenue bonds to finance infrastructure. Problem solved, assuming the money could be spent on bulldozers instead of bureaucrats.

There’s another cause for California’s failure to build homes and roads, however, one that’s rather elusive but even more fundamental. California’s liberal elites, nearly all of them aging boomers, are immune from the consequences of their voting patterns. These liberal voters never saw a piece of environmentalist legislation they didn’t like. Meanwhile, they’re all living in the homes they purchased well before the politicians they supported passed all those fine sounding, high minded laws.

This liberal immunity is challenged by SB 50, a law that threatens to fill wealthy liberal enclaves from Palo Alto to Brentwood with fourplexes filled with Central American migrants, living on public assistance. The horror! But don’t hold your breath. If SB 50 and similar legislation passes, those fourplexes will indeed be coming to a detached, single family home neighborhood near you, but they’ll skip the zip codes where the residents can afford attorneys. Why bother, when just up the road there’s a nice lower middle class block we can bust?

One cannot stop wealthy liberals from hiring lawyers to stop in its tracks anything they love conceptually enough to vote for, but not enough to suffer personally. But there is something that can be done. Repeal Prop. 13. Make every homeowner in California pay property taxes based on the current assessed value of their homes. That’s never going to happen, thank God. But the reason it will never happen is not what you might expect. The reason is because Democrats know that if they ever overreached that much, they would turn millions of voters into Republicans overnight.

The bigger shame is that the only reason these liberals aren’t conservatives is because they don’t have to live with the consequences of liberalism. They don’t have to buy homes at today’s prices, and as retirees, they don’t have to drive during rush hour. If they did, they might think more carefully about where their money is going, and they might question more urgently the environmentalist moralizing that served as the pretext for wasting so much of it.

This article originally appeared on the website California Globe.

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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, where the average per unit costs for “permanent supportive housing” for homeless people is also around a half-million. As reported by NPR, “The PATH Ventures project in East Hollywood has an estimated per-unit cost of $440,000. Even with real estate prices soaring, that’s as much as a single-family home in many places in Southern California. Other HHH projects cost more than $500,000 a unit.”

This is a scam, disguised as compassion. Developers accept public money to build these projects. Cities and counties collect outrageous building fees. The buildings are then handed off to nonprofits with long term contracts to run them. Politicians accept campaign contributions from the developers and the nonprofits. Where are the journalists? Where is the withering criticism? Why isn’t this a scandal?

Why is the national average construction cost per new apartment unit somewhere between $65,000 and $85,000, yet it costs five to 10 times that much in Los Angeles and Santa Clara counties? Why do we accept this?

Earlier this week, Sue Frost, a Sacramento County Supervisor, spoke about California’s housing crisis to a taxpayers group. Her litany of reasons why housing is so expensive, and why the related problem of homelessness is so intractable, was comprehensive and depressing. It ranged from extreme environmentalist mandates such as the California Environmental Quality Act, to absurdly high fees for building permits (often equal in cost to the value of the materials used in construction), to unchecked immigration, to restrictive zoning, to numerous court orders. Even as Frost limited her remarks to summary bullet points, it took several minutes for her to recite all the causes. But in every case, it was government policies that created this nightmare, and in every case, they were policies largely unique to California.

How to Waste Taxpayers Funds

One of the “creative” solutions Sacramento County has adopted to increase the supply of housing is to streamline the process for homeowners to build “accessory dwelling units” in their backyards. At the same time, Sacramento County is funding the conversion of homes in residential neighborhoods into group homes for homeless people.

All of this sounds wonderful. But it is the path of least resistance, adopted in lieu of making fundamental reforms either through legislation or litigation. This path of least resistance means cities and counties will waste billions on new “affordable” housing for low income and homeless people. At a half-million per unit, however, spending billions will not even make a dent in the homeless population, even as it enriches developers, well heeled nonprofits, and the campaign coffers of compliant local politicians.

Then, since those billions are wasted, they will seed residential neighborhoods with subsidized group homes for a homeless population that is, according Supervisor Frost, 50 percent mentally ill and 30 percent criminal. These group homes are ran by private entrepreneurs who are, in effect, state sanctioned predators that destroy peaceful residential streets. They become inordinately enriched by cramming people into these group homes and collecting reimbursement from the government.

Similarly, Sacramento County’s supervisors have implemented an aggressive interpretation of a new state law designed to streamline the process for homeowners to build accessory dwelling units (“ADUs”) on their properties. There is nothing “accessory” about many of these new ADUs. Often they are full size homes, with their own garage, driveway, utilities, and address. All too frequently, ADU ordinances, for all practical purposes, subdivide a property in violation of zoning laws that residents relied on when they bought their homes. Equally problematic, because these lots are not actually, legally subdivided, both homes on the properties become permanent rentals.

This is happening all over the state. In Southern California, Los Angeles County has launched a program to pay homeowners to build granny flats for the homeless in their backyards. Consider the unintended consequences: Once two or more units are permitted on lots that were previously restricted to single family dwellings, these properties become worth more if they’re converted to permanent, government subsidized rentals.

Remember the “blockbusting” of the 1960s and 1970s? That was an ugly affair. Expect the same displacement in the 2020s, except it will be entirely legal. And this time, as private investors and their accomplices in real estate and the government bureaucracy convert entire residential neighborhoods into multi-family lots, they will receive government subsidies to do the conversion, then the government will pay them again to subsidize the rent they collect as landlords.

To recap: Billions are wasted constructing a handful of ridiculously expensive new housing units, then, since that makes no difference whatsoever, established residential neighborhoods are destabilized and ultimately destroyed thanks to laws enabling opportunistic investors, cashing in on government subsidies, to convert random homes into halfway houses, homeless shelters, and subdivide properties with ADUs. Nobody is safe. Welcome to California in the 2020s.

None of this is a moral choice. It disrespects the residents of these neighborhoods who have worked hard their entire lives to pay for the privilege of living a safe and tranquil environment. Moreover, these residents who are betrayed in this manner have worked far harder than they should have had to (to pay their mortgages) because of California’s state and local government policies which are to the primary cause of overpriced housing.

If a majority of local elected officials in just one major city or county in California mustered the courage to challenge the laws that have needlessly caused California’s housing shortage and homeless crisis, and litigated all the way to the U.S. Supreme Court, they could overturn some of these laws, in order to pursue far more cost effective options.

Housing Solution

For example, for the homeless, here is an alternative that could cost-effectively solve the entire problem within months, not years or decades: You can house homeless people in durable $399 10-foot-by-10-foot tents, sleeping on durable $75 cots, four per tent. You can position $649 porta potties to service these tent dwellers, and you can set up a larger tent to serve as a food kitchen and medical station. You could put these tent cities on city owned property or leased private land on the outskirts of town or in industrial areas, and by enforcing revitalized (through court action) vagrancy laws, you could swiftly move the homeless into these managed camps. You could have three types of camps, one for criminals, one for substance abusers, and one for everyone else.

More Solutions

To increase the supply of housing, the solution is harder, but obviously possible, since so many other states in America do not have housing shortages. Policies to make housing affordable again in California could be accomplished without requiring expensive government programs. Instead, to name a few policy changes: lower the fees for building permits, speed up the permitting process, reform extreme environmental regulations, make it easier to extract building materials in-state, and, crucially, end the policies of “urban containment” that deny building permits on California’s vast expanses of open land.

It is time for a courageous city council or county board of supervisors somewhere in California to pursue, through litigation, cost-effective, practical solutions that don’t ruin the lives of the many for the sake of the few. Particularly since government policies are the reason the many have to work so hard. And if mainstream journalists would abandon their politically correct group-think, and question the status-quo with the skepticism that once was the life blood of their profession, public awareness might demand such action.

This article originally appeared on the website California Globe.

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