Simple. The cost of running a business in CA. is expensive. Endless red tape and high taxes mean businesses have to charge more to live and work here. The greedy state and local governments are the problem, they make it expensive!
Why do homeless drug addicts deserve a place in a highly desirable area is the question. When you're on welfare, you don't get to choose..
5
China can build a hospital in less than a week but in California everything is forever mired in red tape. There are more people living here, driving here, and homeless here than ever before. Federal, state, county and city representatives and workers must find ways to expedite and cut costs and timelines. In Los Angeles, the housing for homeless were coming in at $500,000 per unit and took 3 years to complete. Obviously wrong design, wrong contractors and wrong approach.
3
One word: externalities. The TRUE cost of developing in my neighborhood is, indeed, high. That said, I would argue that the true costs were always high and that the hidden costs of development anywhere in So Cal were never discussed in appropriate terms. What about bringing in water? What about traffic? What about "roads are the only way to go" shortsightedness? What about sewer? What about underfunded schools? And who the heck was supposed to pay for all the problems scraping hillsides to build 1,000 homes in Santee eventually brought? The average citizen who wants to buy a home in Sunny San Diego County has always been caught b/t Nimby worries and the GOP anti-regulation, free-market types who refuse to admit they should always have included externalities like transportation, imported water etc. (Yeah, talking to you Brian Jones...the unfunded liabilities issue goes both ways, sir.)
When Rancho Santa Fe has to be subdivided, well, then, I'll know pigs are flying in the Dept of Planning and Land Use.
5
I have lived for 33 years in a West Hollywood, California, neighborhood which has always been nice but decidedly middle class and non-luxurious. Most of the little cottages here are Spanish Colonial stucco and were built in the late 1920's, with two bedrooms and one bathroom. These homes now sell for at least $2 million, most for more than that. The interesting thing, though, is that everywhere I look, I see houses being built, boxy, ugly Tomorrowland houses, that when finished sell for $4-5 million. It's interesting that these builders seem to have no trouble finding their way through a maze of regulations and laws, yet those wanting to put up reasonably priced ones do.
8
I grew up in California and very much wanted to live in the Bay Area. But I quickly realized that I would be unable to afford living there and moved to a much less expensive part of the country. I recently saw a story on TV about a couple from Alaska who moved to Seattle to receive treatment for their drug addiction with their three year old son. They decided they wanted to continue living in Seattle after recovering which also has a homeless crisis and unaffordable housing. They continue to live in a tent in a homeless camp in downtown Seattle with their three year old son hoping for low income housing. Given that there are many places in the country with jobs and significantly lower housing costs, why should taxpayers be asked to fund the extremely high cost of affordable housing in these places when these folks could move to other locations in the country where housing is much cheaper and jobs are available?
13
So: 1) Improve public transportation to further-flung towns and cities with more space and less expensive housing options
2) Reduce the bureaucracy that's drowning low and median income housing opportunities
3) Incentivize some companies to move to more rural parts of the state
3
So a key driver for costs to build in CA is government bureaucracy. Who would have thought?
9
I live in a middle class area of LA. It used to be working class. But no one who has been here 15+ years could afford to buy now. The modal house is one million dollars. I think the estimate that regulation has added 250K to that cost is low as it is compounded at every turn-over and flippers, domestic and foreign, fuel the market: you need a about 8% higher price at every iteration of a sale to make a profit. This again is where our government is a parasite. Add to this doubled commuting time because many roads are nearly the same as Eisenhower's contributions to highways in the 1950s, the hidden taxes of inciompetence in our government - R and D- are repressive. And these non-tax taxes do ZERO to address social ills of every stripe, As a nation, we are past the point of no return. Clearly, our species will kill itself in a 100 years. Too bad we will have taken with us a beautiful ecosystem evolved over 4 billion years.
6
I know there are so many reason why people are homeless but why can't CA. due what FEMA did after Hurricane Katrina. Set up hundreds (or thousands) of trailer homes where tent cities now exist? Seems like the least expensive solution.
5
I would like to learn more about market failure. Costs are high, so is it really possible, even if you eliminate “artificial’ cost such as fees, for the magical market to build such housing when it doesn’t really cost much more to build luxury housing.
1
It’s a bubble. It’s another symptom of wealth and income inequality. The great quantitative easing and ultra-low interest rates adopted by the Fed has created pockets of inflated asset valuations because the disproportionate benefit to investors went into asset classes they prefer. Up goes the DOW, up goes real estate valuations in communities with densities of high salary earners. Add in billions of dollars of suspect corrupt looting from China looking for safe haven assets in the United States (just as dirty Russian money has shown a preference for Miami and Manhattan). Valuations are absurdly disconnected from average local salaries and wages. Affordable housing is demolished to make way for luxury housing which is the most saleable, profitable asset as the valuation bubble grows. The poor and middle class in California have very little political leverage in Sacramento or Washington. Developers, the wealthy, Silicon Valley, big agribusiness in central California call the tune. I’m all right Jack, but boy, the service in local restaurants is terrible. Why can’t they hire better staff? Q: How come so many young families are migrating out of California? A: They are fleeing from a giant monetary policy bubble. It will burst and it won’t be pretty. That red tape is a red herring. Follow the money.
13
Water. We need water. Build more housing means using more water. California really isn't suffering from a drought. It is suffering from a water shortage. Nobody wants to remember the last long dry spell because it was so long ago, ending about two years ago. But the foothills are nice and green right now, the weather is beautiful, flowers are blooming people are walking around in shorts and tees. Never mind that this is supposed to be the rainy season. Finally time to hang the NO VACANCY sign and let the chips fall where they may.
6
California certainly is suffering from a drought. We are also suffering from a water shortage. The two are not mutually exclusive.
5
It certainly sounds like no one wants to build affordable housing! All these excuses! The glaring unspoken message is move out of California if you can't afford the housing. To bad, no room at the inn!!
6
Yada yada yada. Never read so many ridiculous excuses and obfuscations except listening to something coming out of the White House. The bottom line is greed, pure and simple. All of this could be changed quickly and easily enough - by the politicians. Need I say more?
2
Why does affordable housing have to be built in San Francisco? Why not Livermore, CA which is an hour east of San Francisco?
10
So that middle income worker bee folks like teachers, architects, day care providers, landscapers, plumbers, etc., can live where they work. Those who live in the east bay are increasingly unwilling to work in SF.
8
How droll. So, I'm lying on the sidewalk in S.F. and need a place to live. Along come the adults who want me to have affordable housing. Turns out I'll have to pay a relatively stupid amount of money to get it when I check in my pocket and pull out 37 cents, adjust my cardboard pillow and go back to bed. Repeat thousands and thousands of times.
Until we go full Weedpatch on this situation (campgrounds with social services), and stop fooling around, we're just going to sink further and further into third world status and homeless people will continue to slowly rot away and die in front of our eyes.
6
SF is essentially an island ...the ground is unstable and it sits on a major faultline...of course it is more expensive to build there.
The real underlying question is why taxpayers have to support and house those that don't work or don't have the income to afford a place in a high cost city
Granted people can live where they chose but how does their choice/desire translate into other people paying the bills for an individuals choice?
42
@mike If one considers SF an island and that the scarcity of land coupled with the expense of the materials and resources is prohibitive to building affordable housing, those of us living in Hawaii also suffer similar exorbitant real estate prices. We are also wrestling with a high percentage of homeless as well as increased construction of luxury condominiums. On average, the cost per square foot to construct in the west is $139. In Hawaii, our cost to construct per square foot ranges from $180 - $250.
6
@mike If one considers SF an island and that the scarcity of land coupled with the expense of the materials and resources is prohibitive to building affordable housing, those of us living in Hawaii also suffer similar exorbitant real estate prices. We are also wrestling with a high percentage of homeless as well as increased construction of luxury condominiums.
@mike Says the guy from New Orleans. His entire city is a deep bowl surrounded by water on all sides, and only survives because of constant inflows of billions in federal $$$, via the ACOE and other agencies.
Get back to us when you move out.
12
Homes have been built quickly and at much lower cost using recycled shipping containers. A much lower cost way to build shelters too. Co-Living affordable housing would also bring down costs by not necessitating a unit for each individual. It's working for young professionals so why not for the homeless.
13
A shipping container farm would decimate nearby property values. See: NIMBY
9
After reading all the comments so far, one real point is not highlighted enough.
Concentrations of employment and tech have driven costs in several areas of the country.
People move to those cities, in part, to be part of those industries.
We have the ability to hire workers in places like India, El Salvador, the Philippines, and Pakistan to support work done in insurance, banking, tech, taxes, real estate, medicine, pharma, etc.
Why are we not talking about forcing the industry giants into building new hubs in land-rich areas of the United States?
Oklahoma for example has 4 million residents, Idaho about the same. Their population density, on average, is 1 person per mile (varies on county)
So instead of creating an overflowing demand in a few areas, corporations could invest to drive populations to more vacant areas.
most commenters here are demanding other people pay for them to live in high cost cities. Instead we should be demanding corporations create opportunity in this country by decentralizing headquarters and production out of high cost areas to those that need economic stimulation.
7
@mike
Because people don't want to live there. California has it worst because the climate is great. Hawaii would be even more popular if you didn't have to fly there. Most of the places with low population are that way for good reasons. Forcing companies at gunpoint to place their headquarters and production sites in specific areas doesn't sound like something that would work very well. Also doesn't seem to be legal.
1
If SF were in Europe, there would be frequent, fast, affordable trains going to Gilroy, Stockton, Vallejo, Napa, Hollister, Watsonville, and elsewhere that land was not so crushingly expensive. People with ordinary incomes would buy and build homes in those places and commute by rapid transit. We don't even have Bart around the Bay and the bus system outside of SF itself is a cruel joke. An effective greater Bay Area mass transit system would do more - long term - for housing affordability than handfuls of below market rate in the presently urbanized area. And I'd take such a effective mass-transit system in a heartbeat over high-speed rail between San Francisco and Los Angeles. LA probably would too.
188
@Milo: Just curious: how much would such a mass transit system cost to develop? And could the new bridges and/or tunnels built to get across the bay survive 6.0+ earthquakes? I wonder whether transportation planners have already considered cost and risk, and ruled out extended mass transit as a result...
7
@Milo
If SF were like not just Europe, but like Taipei too. A small island of Taiwan has rail and high speed rail going from
Taipei to Taichung, and in each city they have a myriad of transportation options: buses, Uber, cabs, motorcycles, bicycles, and subways. Rarely do you see women in heels - even the most young, fashionable, beautiful women sport sneakers and flat shoes because almost everyone is walking and taking public transport. The public transportation is clean, quiet, efficient, affordable, and pleasant.
19
@Milo: There's enormous opposition to housing construction in the major cities of CA, but in reality it's all about traffic. New housing is firmly linked in the public mind with more traffic jams and fewer parking spaces. So people use environmental rules or historic preservation as sham issues to block more cars on the street.
If we had Euro-style transportation, this would be much less of a concern. But it's chicken-and-egg; transit doesn't work without density, but we can't abide density because we don't have transit.
30
Been working in affordable housing nearly 50 years. There is no magic bullet. One common denominator is that purely private, profit motivated housing development cannot serve poor and homeless people who often cannot afford to pay an amount that covers even ongoing housing operating and maintenance costs, let alone any debt service costs. Public subsidy is a necessary component. Many strategies are part of the solution: reform of zoning and permit process; land trusts (particularly appropriate strategy to address high land costs in California); reforms in the LIHTC program to reduce legal and other soft costs; revision to rent subsidy program ("Section 8" vouchers) to ensure greater acceptance by landlords and targeting of allowed rent levels; just plain more dollars to increase subsidies. While trying to fix the somewhat broken general housing market, there needs to be an urgent effort to address homelessness that is a complex of housing, mental health, addiction, and economic dislocation issues.
34
@CK
Also separating out affordable (LIHTC) from permanent supportive housing. To have tie breakers in funding programs be determined by deepest affordability in a rush to the bottom is putting affordable developments at risk by increasing their reliance on operating subsidies instead of having the costs fully subsidized on the front end. Homelessness is a unique issues that is so incredibly multifaceted and complicated that it needs to be addressed by experts in the field and not developers who lack the expertise on the operational end. It's not an issue of solely providing them places to live. Also, wouldn't complain if a MIHTC (middle income housing tax credit) program were to be implemented.
8
@CK
Hey, good info. And, if i recall correctly, some low income apts may qualify for a lower assessment, perhaps on the actual income rather than fair mkt income. Not real certain, tho. I never appraised any of those.
An obvious approach is to incorporate standardized paperwork into a shared computer application that also allows for a minimum of site-specific aspects. There is no reason to duplicate activities over and over again for the benefit of lawyers. It's amazing that the Silicon Valley region has not done this already to reduce housing costs and address housing shortages.
1
Keywords missing in this article:
- Earthquake
- Building codes
These keywords, combined, explain some of the extra cost.
2
Land in SF is scarce and expensive. Ever been there? Building are frequently spaced inches apart.
Build housing on the city fringes and move the homeless there. While they're at it do something about their alcohol problem. I saw homeless with booze bottles sticking out of their pockets, smoking $15 a pack cigarettes, with costly tattoos all over, and sometimes cellphones.
Enough of this nonsense Messing things up for decent people.
6
@MIKEinNYC The distance between homes in parts of SF is known as the "San Francisco Inch".If you can fit a piece of paper it is too far apart. The city fringes? Water on three sides and Daly City and South San Francisco on the fourth side. There are no fringes of SF. As for services for the homesless...non profit orginizations provide them. The most profitable businesses in SF are non-profits. Not unlike how the defense industry bleeds the federal government..
4
@MIKEinNYC ...true that. I've seen them begging for money with a cardboard sign on the side of the road, then walk away for a spell talking and texting on their smartphones. We're being conned.
3
They want to build $1,000,000 condos for the guys down at the beach. The same condo in Riverside or San Bernardino costs $250,000 and in Trona, CA it costs $150,000.
6
Californians wants to wrap themselves in regulatory tape and then don't understand why they can't get anything done. "around one quarter of the cost of building affordable housing goes to government fees, permits and consulting companies". There ya go.
6
Don't conflate low income with affordable. We would love to move to San Francisco to be closer to our grandchildren, but selling our 3bed 2 bath colonial in NH (there are thousands of homes like ours) would give us enough money to buy a studio apartment in a so so part of town. Our daughter and her husband do well financially compared to most, but have decided it is cheaper to rent their 3bed 2bath apartment with a small backyard in a nice part of SF than to take out a million dollar mortgage.
4
And yet urban Democrats from NYC and Coastal California believe they can solve all the country’s problems with yet more regulations, and by brute force if opposed.
4
It would cost somewhere around $70 billion to build housing for its current homeless population of 150,000.
UTTER NONSENSE.
That's more than $400,000 PER person.
4
@AWENSHOK .... And right after they build it, another 150,000 will show up. Maybe even me. Who wouldn' t love a deal like that in sunny warm Cali?
4
@AWENSHOK agreed, and not the only inaccuracy in the report. Average construction worker in SF not making $90 an hour. Not sure where they got that metric, maybe budgeting labor hours or something.
The biggest corporations and richest people (can you say Hollywood?) live in the state of California. Let them pay for building housing for the homeless.
1
@Don Juan
And they pay the highest tax rates in the country. Maybe ask the state what it's doing with all the money it takes in.
3
Quite the slanted article filled with credulous acceptance of any “fact”from the Trump administration, a Republican politician, real-estate developers and their front organizations, and silly comparisons of building costs in San Francisco with red states like Texas, with disastrously few regulations and Bangalore, with none. The real problem in California is that far too many people want to live here. One in eight Americans lives in California now, with more moving in every day. Paving over all of the state to accommodate everyone wishing to live here is not the solution. Infilling in already overcrowded cities with already gridlocked roads, overburdened sewers and other resources is not the solution. Doing away with all regulations to make wealthy developers happy (and richer) is not the solution. Millions leaving California for all of those states claiming to be oh so superior and cheaper would be a great solution.
8
China would build enough to house all of the homeless in SF in less than a year.
1
@NH Have you ever seen how Chinese government building projects work? Government takes land, clears out any current occupants, often not reimbursing them in any way, uses cheap labor, doesn't worry about environmental impact, and in many cases, doesn't worry about building codes.
The result is much cheaper, but at the cost to many people. Some projects are falling apart within 10 years.
9
I wonder how much those pesky earthquake codes add to the building costs. When I see construction outside California, it strikes me that the columns are far apart and there isn’t a lot of rebar in them.
3
My sense is that part of the problem here in the Bay Area is that the homeless advocacy industry demands quality units for the homeless. That sounds great, but what we end up with is a small fraction of the needy population getting really nice units.
Ages ago I lived in dorms at both UCLA and Cal. At both locations our "apartments" were, I'll estimate, 11' by 14', and two of us were in each. Bathrooms were down the hall, and food service was on the ground level. After I moved out of the Cal dorms, I recall that they were deciding to put three students in each room.
Enough of these $750,000 apartments; it's time to serve more, offering less.
10
@Bill It's the basic costs of buying land and construction, along with permitting, that raise the cost. The difference in cost between building homeless accommodation and luxury apartments is mostly in finishing materials (i.e. laminate counter top vs granite) . I read a good article about these base costs, but can't find the link.
4
I built affordable homes (as defined by the Napa County Affordable Housing Ordinance) but pay about $10 / sq. ft.to the county for an affordable housing tax plus about $5 / sq. ft. for a school impact fee, and see no evidence that the county produces any affordable housing. Skilled construction workers cost about $50/hr. Workmans compensation insurance rates are outrageous.
San Francisco needs housing for those who have jobs there. It is crazy to build homeless housing in the most expensive area of the country. Build it in Napa or Vallejo or Detroit.
13
Some of this is built into the ethos of the Bay Area. The idea that everyone deserves a voice...
I witnessed this first hand as a long time Bay Area resident. Meetings, projects, every aspect of a build allows for infinite comments and suggestion from anyone. Aspects of the actual build, from the most benign, like the color of your window sills, to the severe, like the material make up of your roof. Are regulated and pontificated over by anyone and every one who has an opinion.
Pair this with the imbalance of Prop 13 that puts the burden of paying for the services on the young, and the plethora of Title 24 regulations (environmental) that do not take into account the actual local of the home, and its incredibly difficult and expensive to build anything. For example, in SF a temperate climate on every measure, windows and insulation must meet the highest efficiency standards in the world. That triples the costs. And that's just two of the hundreds of requirements!
In the end it all comes down to the law of unintended consequences. Which in a state that passed some 30k bills last year seems lost on the legislators who spend their lives writing bills...
8
This article really opened my eyes to the fact that the high cost of living in California isn't just due to supply and demand. I hope Newsome and others in the capitol are able to be radical enough to completely overhaul to home building process and get to a place where the homeless and all others can afford a place to live.
4
@Liz Don't hold your breath. His State of the State address was all about supply and demand, and building more housing to meet the demand.
1
@ B-town, in Ithaca NY one pays $5,100 a year in property taxes on a $170,000 house, plus water, $800 at a year, plus trash tags, plus now yard waste tags. $9,000 on at $500,000 house sounds like a deal. I do recognize that property taxes are regressive and have grown out of all proportion for income for those who bought long ago and didn't pay anything near current values. One cannot live off the current market value of one's home without selling it and leaving for a less expensive community which one might have no desire to live in or connection to.
4
As a lifetime Californian, I can attest to the insanity of the building and code approval process. At the same time, there is an almost 100% chance someone in the process will be corrupt, selfish or crooked, and require regulator oversight. It's part of the nature of California that attracts both interesting and inventive people and crooked and sleazy people. If we had a robust and trustworthy team that could oversee building permits and supervise those projects to completion, like a small town, that would be great. But the scale of the corruption and dishonesty in building trades or ownership is such that the oversight regulations are necessary. Although when the next earthquake comes and reduces 20% of the housing stock to rubble, everything will reset again like it does here periodically. We seem to rely on earthquakes as a mitigating economic factor. That's the only sure thing here.
8
We need to incentivize people and Business to start moving back to the declining small towns and villages away from these Elite cities.Poor people and those without the skills needed in a particular city need to go when rent is normal and opportunity for a normal life in supported.People need to see your going to spend your life living on someones sidewalk if you stay in S.F.Elites and Tech Bros need to see the advantage to help revitalize these small towns and give people a hand in getting started somewhere else.If i was homeless in S.F i would love going to a small town that has a normal job for me AND a new Basic Income for support and humane existence.The wandering souls walking the streets aimlessly need to be forced into Mental health treatment and helped also.Then you might get a normal city
It appears that "The world's sixth largest economy" is dysfunctional. Wait till it starts running out of water, electricity and citizens wealthy enough to pay for the cumulative effects of this chronic dysfunction.
@Ed California haters have been predicting that for as long as I can remember. My beautiful state is no more dysfunctional then any other state in the union, we pay for those wonderfully run states i.e Mississippi, Arkansas, Missouri etc. Btw, it's the FIFTH largest economy on the planet.
4
It's nearly impossible to build anything in America quickly and efficiently because everyone from the lawyers to the janitors want a piece of the pie. More time is spent debating how much goes where as oppose to how to actually build something.
1
The fastest and surest way to get new housing is for the government itself to build it. Enough with the nonsense of "incentivizing" the private sector to do something they really are not interested in doing. Much of the problem is in the wholesale privitization of functions that should be done by government.
15
Putting in tiny homes nationwide to help the homeless crisis seems like a great idea! Make sure developers include granite counter tops and viking ranges so profit margins remain high and out of reach cost wise for most. Hipster Millennials with inheritance will eat them up. Problem solved!
There are so many other facets to this issue. Currently in San Francisco, one of the biggest issues we are facing is Real Estate investors and speculators manipulating the prices of the rental markets. Their business plan is to buy older, rent controlled buildings, harass & bully existing rent controlled tenants out, then demolish and convert the units from studio-1 bedroom and one bedrooms to two bedrooms, aka "maximizing square footage." In doing so they take market rate rent controlled units and double the rent for the unit. Units in my building have gone from a market rate of $3100 to $5200 for the EXACT SAME unit. Once my building is finished, they will have taken 15 market rate units off the market, and this is only ONE building. This is one of the largest issues destroying the affordability of housing in SF, and it's all unregulated. No one is doing anything about it, other than politicians pleading that the only solution is to spend billions on building more units, where more developers, attorneys, etc will be the true benefactors. A second major issue destroying affordability are these same speculators and developers using loopholes in the rent control laws to "passthrough" capital improvements to renters to raise their rents to increase profit. Many speculators also use these passthroughs as threats to tenants who don't take paltry buyouts to leave their apartments so that they convert. San Francisco has a MAJOR problem.
9
@JM It can be worse than that. A man I know, disabled, died under suspicious circumstances (body nowhere near his walker, which he never left), and his $4,800/year apartment went back on the market for $50,000/yr.
1
The cost of living in San Francisco is gigantic. Trying to keep homeless people in San Francisco is the worst thing you can do for them. They will never be able to get a job that pays enough to live in the city. They will be dependent on government hand outs forever.
Homeless people need to be sheltered in a city where a low-end job has a chance of paying the cost of living. The best thing we can do for homeless people in San Francisco is to move them where they have a chance to become self sufficient. This is not San Francisco.
10
It's a sad irony that those who passed and support the morass of paperwork and legal fees are the ones who are now wringing their hands. We have met the enemy and he is us.
3
It is no surprise that a developer would say that "the housing shortage is purely a supply problem." Actually, it is a demand problem. There is an insatiable demand that construction will not be able to satisfy for the foreseeable future. Local governments have approved, and continue to approve, too much office construction without requiring housing. The actual housing "need" is to house the homeless, and to provide affordable housing. All other alleged "needs" are based on the unstated policy assumption that unrestrained economic growth is our highest value -- higher than the benefits of space, quiet and privacy that lower density provides. Another unstated assumption is that we have unlimited water, and adequate schools, parks, roads, and transit, to accommodate unrestrained population growth. Both unstated assumptions are wrong. We need a head tax on large corporations to fund housing for the unhoused and affordable housing, and we need state tax incentives that will cause new jobs to be located in areas where housing is affordable.
5
California built housing like any other western state - carelessly, without planning. Then, sometime in the post-war years, Californians realized they lived in the promised land. Too good to lose.
Supply and demand. The demand for housing skyrocketed, but the supply was ersatz. The standard 5-story residential apartment building, found everywhere around the world, didn't exist in California. People moved into stucco houses or steel towers.
Newsome is right: lead with new technology. Build housing using wood and steel modules. Override NIMBY opposition.
Costs can be driven down. Labor costs are so high because of all the office development going on. Rescind the Prop 13 tax break for offices, and they'll be less appealing. Residential builders won't face as severe a labor shortage.
But California will always have a housing shortage. It's too nice a place for people not to want to live here. If the supply of housing increases, more people will move in.
1
Here in Minnesota affordable housing is also a big issue. Even though the cost of building is much lower here, the real issue is that wages have not kept up so that lower income people can afford what's being built.
4
Just a few questions:
Hasn’t affordable housing always meant ‘used’ housing until recently? When did we accept the idea that affordable housing could be new construction?
What happened to all the used housing that provided a steady supply of affordable housing? Who bid it up? Why? What happened to their historic sources of housing?
Do the geographic boundaries of cities still allow us to address these problems and solve them? Are their new mapping boundaries of income groupings that no longer fit our old city boundaries? Why are we still trapped in using the city boundaries when the boundaries that define this problem are so different and conflicting?
Is the power to solve the wider housing supply problem so fractured by political boundaries that we can no longer solve it? How do we shift the power ‘larger’ so we can match it to the problem?
@Rick Philips It's much harder to renovate old wooden buildings than brick. Look at the east coast and Europe. Brick buildings are the backbone of middle-income residential housing, which becomes affordable at times. California can't do brick - earthquakes. Wood rots. Wood doesn't build 5 stories. The Bay Area's older housing is wood. That's changing now, but only recently.
1
@Rick Philips In CA, the older homes have insane market value. A 1500 sq foot ranch from the 1950s on a tiny lot that hasn't been renovated will cost about 1.5 million in Silicon Valley. This has been true for a while, so many of these have been "flipped" and renovated. The updated ones may cost closer to 1.8 million.
The cost of land procurement, environmental studies and permits is staggering. It can easily double the cost per unit of housing.
I would propose that State wide studies be made as to ideal locations for large multi unit housing. Focusing on open space for families, proximity to public transportation and available parking. Permits and studies would be paid for by the state. The goal is to purchase those prosperities by the state at a local comparable price (with eminent domain if needed) and let out bidding for contracts to build apartments from small to mid-size. When purchased or rented, the state would be reimbursed for part though most probably not all of their investment in the site.
Continued oversite by the state would be necessary to prevent.
Anyone who thinks government regulation is all good and has no adverse effects should read this article. In addition to fees for permits - that account for 25% of housing costs in CA - there are zoning regulations that add to the burden. And of course the tax subsidies for mortgage interest and property taxes (albeit limited for the latter) boost house prices.
The best way to reduce housing costs is to get the government out of subsidizing housing for the rich. Totally eliminate the mortgage interest deduction and let government sponsored entities only guaranty or purchase mortgages up to $150,000.
7
@J. Waddell\: I am always amused by the fact there are so many non-Californians who are experts on what is right for California. It reminds me of Trump's visit to the town of Paradise when it was devastated by a horrific forest fire. Trump blaming the policies of the Democrats in the State of California, claiming that their policies prevented any clearing of highly flammable dead trees and such in the forest around Paradise. The only problem is that the fire started in and swept through Federal National Forest land that the Republicans have, for decades, blocked any money for fire prevention.
2
“The reasons for California’s high costs, developers and housing experts say, begin with the price of land and labor in the state.”
Well, we’re not making any more land so let’s focus on labor costs.
California needs to become a “right-to-work” State. In addition to lowering labor cost, job growth follows.
According to the National Institute for Labor Relations Research, the rate of job growth was two times higher in right-to-work states between 2008 and 2018 than in states where workers can be compelled to join unions or pay dues as a condition of employment.
5
@Miguel G: Rigth to work states are those with the poorest standard of living. There may be more jobs in the right to work states but the wages and benefits are fare lower than in California. That is why so many people from the "Right to Work" States move here.
6
@Miguel G
I don’t think we read the same article. Labor costs are higher in CA, true. But it’s clear that that’s one factor among several, not the primary driver of high housing costs.
The central problem here, as referenced in this article and the piece last week titled “Build Build Build Build Build Build Build Build Build Build Build Build Build Build” is what Larry Summers would call promiscuous distribution of the veto power. Too many people get to say no or add baggage onto housing development, to the point where they never get started.
@Miguel G There is actually a lot of land available in San Francisco and other towns in the bay area. It's just that it's all tied up in single family homes. It is illegal to build multi-unit dwellings on 75% of city land - an exclusionary zoning practice left over from the last century meant to keep non-whites out by making sure that apartments could not be built. With the stroke of a pen many lots could be converted from housing 3 to 5 people into housing 15 to 30, or more. Minneapolis Minnesota has just made that change and I can't wait to see the results.
7
Why do the homeless feel they have a "right" to live in San Francisco or Santa Monica or San Diego? I've worked hard my whole life knowing that the best I could do was visit those places a couple of times every few years on vacation. Take the homeless out to the Mojave desert. build tiny homes for them. Add services they may need, like a community bus to get to grocery stores, etc. We have to take care of them, but they also have to try to take care of themselves. We don't "owe" them a waterfront home in any of the places they would like to live.
75
@grmadragon So right... The irony in CA being that the majority of the state is empty. Seriously, pick anywhere other than Los Angeles and San Francisco and costs will fall dramatically. One needs only to travel less than an hour outside of these areas to find wide, open, cheaper land. And why do the homeless get free housing in a city where a single person making $150K a year can barely afford to live?
18
@grmadragon While I can somewhat agree, I'm not in favor of forcing anyone to move to the middle of nowhere for your own convenience. What I'd like to see is new towns built where there are none with infrastructure, but minus some of the ridiculous restrictions on every single bit of building material having to be new to conform with the neighbors new McMansion ideas of "beauty". If restrictions are to be in place how about limiting what can be built by the richest guy in town and the price of the actual land it's built on. How about a new town where NO, you cannot just come in and gentrify every parcel of land and force everyone not to your particular standards out?
7
It is a real shame that the homeslee are housed in multimillion dollar mansions and eat caviar 3 times a day.
1
I question whether home ownership should be a priority in Mr. Newsom's $6.8 billion affordable housing budget. Although more affordable, housing costs in Phoenix have also spiked considerably, partly due to CA companies and their workers migrating here for the affordability. Affordable housing partners have built some attractive small single family homes a gentrifying neighborhood near downtown; they sell in the $300K range, with $100K in downpayment assistance for income eligible buyers. The lots were all city owned, some acquired during the recession. More are planned for that area. However, when I look at those lots, I wonder how many more people could be housed in 2-story duplexes or four-plex rentals. Units like these abound in places in older neighborhoods in cities like Louisville (KY), Cincinnati, and Cleveland. The area is walkable, on a major bus route and close to our expanding light rail. Unfortunately, planning seems allergic to high density and dedicated to an over-abundance of free parking. However, it makes little sense to me to focus on homeownership when, at the moment, even single people making in the mid $50k range can't afford a decent 1 bedroom unit. I did take advantage of a first-time buyer's program in my 30's but it would have been a very unwise move had I not had the backup resource of the "family dole" for homeowner emergencies. Most low-income folks at risk for homelessness are not so advantaged.
7
Ban air b&bs and or investment bankers and other entities from buying up the stock of existing properties and new properties. Every Air B&B removes another unit from the rental stock. In Sf alone that numbers in the 1000s (counting illegal units). Add in the entire SF Bay area and you will see how to quickly mitigate, if not end the manufactured crisis. The current definition of affordable is laughable. We are in the age of corporate ownership of an ever-increasing amount of housing. It is a great investment but it should not be at the expense of the tax payer. It is not regulations that drive price it, is demand. If you keep limiting the supply by removing units you drive up demand. The rallying cry of dense housing and cram in buildings at any cost serve to bolter the argument that this is not a real crisis but one of property mismangement.
26
@john roche YES air BnB and properties allowed to sit vacant can and must be turned into multifamily rentals.
@john roche It's a useful argument perhaps.. but talk with all my neighbors who will say the only way they can afford their SF mortgage is by having an AirB&B unit or MIL apartment (or two) in their house. What's happening now across the cities is garages are being converted at an insane rate into small apartments for rent..
1
Part of California's affordable housing insanity, that this article touches on but doesn't really explore, is the crazy-quilt of funding sources required to actually build an "affordable" project -and how much that contributes to the cost per unit.
We had the opportunity to witness this first-hand in the development of two similar parcels near a BART station several years ago. One parcel was being used for "market-rate" apartments and the other parcel was being used for low-income "affordable" apartments at very similar densities and construction techniques. What was pure insanity was that the "affordable" units cost more to build on a per-square-foot basis than the "market-rate" units! When we delved into the numbers, the difference was in the "soft-costs" (non-construction/non-land) - and was primarily from all the attorneys representing each of the various funding sources (federal, state, tax-credit, etc. etc.) that the "affordable" housing developer had had to pull together to build the heavily subsidized units.
Providing simpler "single-source" funding for affordable housing would go a long way towards building more of it. Let's pay more construction workers and fewer attorneys!
23
What qualifies as "affordable" in the SF Bay area is not affordable to any unhoused individual or family. 93,000 per year income is how much money you can make and still qualify as needing affordable housing. You need to make $46 per hour to afford what they call affordable housing. That income is what landlords expect to even rent to you. Permits and fees start at $40,000 and NIMBY neighborhood associations pressure spineless city council members to restrict and limit housing projects to keep their own homes exclusive and expensive. Outlaw those associations and require building departments be staffed by people with building experience.
"
6
You cannot build new housing that is affordable anywhere.
Housing becomes affordable when housing that was out of reach of the poor deteriorates.
When I bought my first house, new, for $21,500, the city was building a demonstration project of similar 'affordable' townhouses (this was in Virginia) and the city's cost was $80,000.
The city work was better than the shoddy that I bought, but not 4 times better.
1
Sobering article. In the best of cases, the pace of construction ordinance deregulation needed to accelerate the construction of affordable housing will be too slow to effect the change needed to slow the pace homelessness. Subsequently, this burgeoning crisis will evolve into an even more serious public health nightmare and a continued exodus of middle class residents in areas like San Francisco. This inevitable reduction of tax revenue and incomes necessary to pay for bond issues will add to the financial quandary of who will pay for not only housing, but also who will pay for basic municipal maintenance. Either a massive tax increase will need to be enacted, or in ten years it will look like post-modern feudalism.
5
Perhaps the rich folks in this country could satisfy themselves with just one or two houses each. That would free up some supply. How many does Bloomberg own? There are thousands of residences that are empty because their owners are at their other properties. A little less greed and a greater commitment to our collective wellbeing among the wealthy might make a dent in homelessness.
16
@J You completely missed the point of the article. This isn't about class war, it's about the regulations that are constricting the development of affordable housing. Try reading it before throwing blame around.
3
@c yep, regulations favored by big gov libs is the only reason why housing isn't affordable in CA. Thanks, Hannity!
To be blunt, why promote housing for the homeless in some of the most expensive cities in the US?
Almost all of us that are self-supporting have to limit our choices of where to live based on affordability. We might want to live in a certain neighborhood or area, but reconcile our desires with our resources.
100
People move every day in this nation to make more money. Why can't people move to save money? This is a VAST country. I know it's not quite that simple and there are a lot of chicken-and-egg issues at the individual level; however, as a society, as a country, it has to be a lot cheaper than say...$70 billion dollars...to fire up some government committees and social service organizations and start figuring out how to redistribute California residents who are interested in moving out to other parts of the country where these kinds of ridiculous market forces simply don't exist. I'm sure California is great, but so is "Billionaires' Row" on 59th Street in New York City, the difference is nobody thinks that there has to be some sort of taxpayer-funded initiative to make it "affordable" today just because it was at some point in the past. It would be a shame if it is impossible to build affordable residences in a state that houses 10 percent of the US population but if you can't actually fix it despite all kinds of good intent then maybe the time has come to acknowledge it's really broken and really move on...by literally moving. If that happened then sooner or later (and most likely later) market forces would kick in on their own in California.
27
@Eric if you have a job and family where you are but not elsewhere, if you cannot afford uhaul and gas and don't have a job elsewhere nor savings for first and last month rent .... how are you supposed to pick up and move and to where?
5
Need to look at addressing how property is taxed and develop structures that encourage housing to be built and essentially lower the value of certain land for other uses. Disincentivize property owners from sitting on land. Get rid of the minutiae in land use regulations. Disincentivize flippers and second home buyers. And repeal Prop 13.
8
This article only examines one solution to the lack of housing crisis driving homelessness. Meanwhile 1.5 million homes sit vacant across America. While over regulation may be one barrier to affordable housing, our perverse notion of private property is another. The fact that the uber wealthy can amass unlimited amounts of homes and property is another. It causes prices to soar as the wealthy continue to pay higher prices and in turn charge more for rentals, driving struggling families onto the streets. I find it troubling that the article seems to single out environmental protection laws as the biggest problem without offering a fix. We see with Trump the dangers of unobstructed roll backs of public protections in the name of business friendly cost savings. Perhaps we should look at the costs of permits and perhaps we could use the national guard to help with construction rather than deploying them to the border to protect us from brown skinned assylum seekers.
13
Not that this would work in every case, and only for people willing to accept, but it seems like it'd be cheaper and a faster solution for those without a home to place people in existing housing in other cities, pairing them with employment, and offer them a $10,000 moving bonus. You could move 70 people out of the city for what it sounds like is the cost to house 2 in SF.
27
I would love to believe that lives would be changed by affordable housing. I cannot. In our desire to get people off the streets we seem to think that we will have solved the problem. These units will be trashed in 6 months. We need a fundamental change in how we deal with the tragedy of broken lives. Putting a roof over it is not the answer
15
“Housing first” exacerbated the crisis - as evident in the article it’s really “housing never”
it seems impossible to house the homeless population in the most expensive real estate in the world. You can't collect enough additional taxes from the existing working population
( who can barely afford to live in the Bay Area as it is) to fund it. What about revitalizing some of the depopulated cities and towns in the interior of the US with government incentives to move homeless people there? Coupled with training programs to get people on their feet with a new life away from old habits.
39
I always thought that there were too many lawyers in the US. This seems to confirm it.
My brother-in-law lives in San Jose. He is looking to buy a house. To get my advice, he recently sent me the paperwork of one on which he had made an offer. The amount of document, reports, legal warnings, etc. was mind-boggling compared to what I am used to here.,
1
If you can't build housing that pays for itself, then you can't build "affordable housing". Either the concept needs to be overhauled, or another solution found.
18
How about some honest, actual statistics?
"Not taking into account the price of land, around one quarter of the cost of building affordable housing goes to government fees, permits and consulting."
Well, 25% of what?
5
@Janice
It’s hard to trust any of the numbers included. Average construction worker in SF doesn’t make almost $200k per year, quick google search shows $18-$35 hourly. CEQA may be used to slow projects but how often does that occur? Of course it’s more expensive to build in SF than Houston, square mile area of Houston is more than 10 times that of SF (669mi^2 vs 49mi^2) and the cost per square foot represents that difference.
9
It is very true that California over regulates so all the regulation costs are high and slows down development. One or 2 people can block development for years. It is a bit like how Trump uses loop holes to enact any thing he wants as his swamp lawyers finds way around the spirit of the law. It is hard to strike a balance of reasonable protection and development to provide affordable housing.
2
This article would be so much. better and apt if it actually stated what the size of the $750k unit was in terms of square feet and bedrooms. The numbers at the bottom of the article are all in percentages without a baseline figure. Too bad. Real builders deal with real numbers and the problems could be solved by real builders
3
Step 1: Declare a state of emergency due to housing shortage crisis. Step 2: Eminent domain of all property within a 1 mile radius of rail stations outside of the city. Step 3: Generous tax incentives to build high density mixed residential/commercial communities using immigrants on work visas (while giving them a legal path to citizenship) above and around these rail stations. Step 3: Building out high-speed rail, e.g., the Hyperloop so that bedroom communities can be built in the desert within a 30-minute trip to SF and/or SJ and/or Oakland.
5
@Ed um, there is NO DESERT anywhere in Northern California. The Bay Area is ringed by suburbs from which pple already commute up to two hours one way.
3
@Janet Rosen The Hyperloop, which would largely follow the I5 corridor (the desert), is supposed to be able to go from LA to SF in 35 minutes. Hence, a half-hour commute from the desert would be a reality with the Hyperloop.
Sounds like affordable housing projects all over America, some places more than others. Sure, the cost of land is prohibitive there, but the real barriers are endless bureaucracy and racism. Lots of ways to say no to a potential project in your neighborhood; lots of arguments for lawyers to haul out to end the discussion. In this area it’s traffic and the “burden” on the schools. And we all know who might live there if the project is a “go.” Nothing new here.
6
In addition to unused or vacant housing, there are numerous companies across the country that build high-quality, prefab “tiny” homes that could be quickly put into place. While perhaps not a permanent solution, at least we could get people off the street and into decent shelter. This whole situation does not have to be so ridiculously expensive.
2
The California Environmental Quality Act is a convenient and alarming scapegoat. Yes, “anyone” (i.e. the public) can object to a project on the grounds that it will have a substantial adverse impact on the environment, but cities often ignore these objections (and the requirements of CEQA) with impunity because the state doesn’t enforce CEQA. Private citizens have to sue. I have objected to dozens of projects as a volunteer with a historic preservation non-profit at this point and sued exactly never. It’s too expensive, and even in very strong cases a lot depends on the judge. Sometimes my and others’ comments result in better projects and sometimes CEQA compliance, sometimes not. A lot of the delay in my opinion is cities not taking CEQA seriously. They violate it with impunity if they can get away with it.
10
Well. Hmm. I tried to build a median income housing project of eight units on a parcel that was zoned for that use. The neighbors sued under the guise of CEQA because they didn’t want “that element” in their neighborhood of million dollar plus single family homes. Had nothing to do with the environment. It cost me nearly $500k and 2 years to defend. We won every ruling. But that was not the point of the opposition. They achieved their objective of obstruction. To cover the cost of litigation rent impact for each 2 bedroom unit would be about 600.00 per month increase!
Know your facts. CEQA for small projects is used primarily as a NIMBY opposition tool and a Union extortion tool.
BTW- I consider myself a strong environmentalist.
14
Perhaps the fact that you have protested dozens of times is a good example of problem plaguing low income California housing market
1
@Joe I agree! i also believe we have a real class and race wars going on underneath everything and that is human psychology problem since the DAWN OF TIME .YOU CAN'T FIX IT! We never evolved out of Tribalism even though we are all one Species.NIMBY indeed!
How interesting that real estate developers (and the article) blame environmental regulations for high costs but do not make a single peep about Prop 13, which so constrains the property tax base that local governments respond by imposing fees and conditions. Fees and conditions raise the cost of new development. If developers are so concerned about affordability, I would expect them to support the repeal of Prop 13.
49
@JM under current tax law, the owner of a modest
$500,000 house will pay around $9000 per year in taxes. How much more do you want to raise it?
This is a regressive tax, unrelated to income.
21
@B-town The value of your home is unrelated to income? Surely you jest. No one likes to pay taxes on anything. The problem with income taxes is that wealth people can dodge them. Real estate taxes are harder to dodge, which is why they are opposed more energetically.
15
@B-town
Yes but how much will they pay in 20 years when the home value increases to $2M? An increase of a couple percent per year on that $5000 right? Property tax should correspond to present value of the home. And it’s a much bigger problem with commercial buildings.
9
The State of California should turn some of its attention and spending to utilizing existing unused housing potential. Put money into persuading and assisting owners of large houses with unused rooms to create private apartments to rent. Ditto for garage conversions: instead of charging people to convert their garages, help them with the cost of doing it. Consider doing the same with the the many churches which have underutilized space due to changing programs or declining attendance.
9
@F Bragg
There are probably another thousand regulations of various forms and types that would preclude all of those suggestions. Reports, permits, exemptions, lawyers, so on and so forth would be lethal to such proposals.
4
When the Presidio Army Base in San Francisco and Treasure Island Naval Base in San Francisco Bay were closed, that housing - along with mess hall kitchens, commisary, hospitals and plenty of structures for training and small industry - were available. Instead of the Federal government using that opportunity to alleviate the homeless situation, the properties were used for commercial developement. I recently saw a travel item showing the very room I occupied in 1970 in the barracks in the Presidio (identifiable by the view of the Golden Gate Bridge out the window) now renovated and available for over $400 per night. That room could easily have housed at least four to six people, as it did in my Army days. Those two bases alone could have housed, fed, trained and cared for thousands of people.
Don't tell me there are not solutions being neglected in favor of someone's opportunity to make a lot of money. That's what it too often comes down to.
102
@EJW the Presidio is now a national park, not a commercial development. The unit you refer to is probably a room in the Presidio Inn, a hotel on the main post. The old army housing is rented out to regular folks at mainly market rates, but with some subsidized units for folks who work in the park in jobs with modest salaries, like preschool teachers and park rangers. I have lived in the Presidio for 15 years and raised my family here. It provides the most family friendly housing in SF county, in a city with only 13% of households including anyone under 18. The Presidio houses lots of non profits organizations on the main post. The Presidio is a cultural resource for citizens of the Bay Area.
18
@EJW
Correct! There are abandoned churches and large buildings in the Bay Area. Often I’d walk by them and wonder why they are empty. Why do we need to build anew? Any way to rebuild/reuse?
Building anew helps the construction business and landowners, lawyers and the real estate professionals - all lobbyist groups to whom Mr Governor serves when he purportedly served the homeless/former vets. The Governor himself had bought and sold multimillion residential real estate in SF.
Most people forget that we have a large population of homeless people partly because SF used to be a military base, and homelessness is partly a generational legacy to drug abuse and mental health as a result of some people’s former military life. We have a responsibility to rake care of our vets - we can’t just use and toss people! But we also have to expect self-accountability. Not all vets end up homeless.
I want to help, but I also
want a pleasant experience using public transport like in Taipei, and not have to sit next to a urine or feces stained seat. It’s complicated.
@EJW
Presidio is required to pay for itself, it gets no funds from Congress.
4
While the article implies that having so many regulations in place covering the financing and construction of low-cost housing is what prevents low-cost housing from being built, which is probably a huge part of the story, it accepts without challenge that the regulations are well-intended bits of legislation. They are not.
They exist so that everybody gets a seat at the table and can negotiate a skim for themselves as a pre-condition to allow a project to proceed. They do not exist to protect the poor future renters. They exist to line the pockets of politicians and developers, and to protect the equity and profits of existing landlords. That was always their intent, from their inception. The law assumes a man intends the natural consequences of his actions.
56
@Yesquire, people have a choice NOT to move to San Francisco or any other expensive urban area in California, New York, etc. When the peons start voting with their feet and all of a sudden rich man's junior and little princess private schools can't find teachers for love or money and private tutors need to be imported for a great deal of money, and restaurants and bricks and mortar businesses of all kinds disappear for lack of help, things may change, but not until then.
4
@Yesquire
Most people think millionaires or people who are able to buy a home in SF as heartless and emotionless people. But homeowners are people too. Someone in their fam, whether in this generation or prior, sweat, toiled, and worked hard to get their now million-dollar home in SF. If they had worked so hard especially the recent buyers who spent upwards $1.3 M+ for their home, why is it ok to build homeless/affordable housing around that will drag down the overall housing value?
At the same time, why is it ok for hard working people who are teachers, nurses, public servants, veterans etc. not to be able to own a home or live within an hour’s commute from their work?
Most people who are in SF these days are here because of work. SF is not a pleasant place like Lake Como for the truly wealthy who are not working. Even the billionaires themselves are here when they are here because they have a work/networking connection, or a family or social connection with someone who had a work/networking connection. I find SF to be one of the hardest working cities anywhere in the world. The young millennial tech people that people like to make fun of, work late into the night. I’ve seen young people up at night till 1AM still working on their computers. For all of these hard working young people, vs the ones who are backpacking and enjoying a carefree summer in nature, who is to say who is more deserving of certain real estate in certain locations in 20 years?
3
$90/hr might be the company's cost rate per hour but is not the average wage for a construction workers. Skilled craft are probably closer to $30-50/hr for non-union labor.
Labor rates are probably only 15% higher than Texas. Company cost rates are higher but craft labor compensation is not the primary reason.
It is becoming increasing difficult for the area to hire and retain skilled labor due to the cost of living. Unlike Texas, the cost of relocation from out of state is a major barrier to meeting the supply gap.
44
@Kris $90 /hr to the worker may in fact be correct as there minimum wage requirements that need to be met for federally funded projects that HAVE to be Union built.
4
@F. Anthony
I hope your point is not that stipulating union built construction is a problem. Construction workers living in an expensive area like San Francisco need to be paid well enough to live there, and not become homeless themselves. Why focus on the hourly wage of laborers, and not the profit margin of contractors and developers?
9
I noticed this, too. They don’t make that much gross income per hour.
1
“Mr. Newsom’s budget this year calls for $6.8 billion in affordable housing funding including mortgage assistance for first-time buyers and bonds for veterans’ housing.”
Mortgage assistance increases the demand for housing, making it more expensive. Same is true with the obsession of the ‘American dream’ of owning a home. Make it easier for lots of people to borrow lots of money to buy a home, and they get more expensive. Let people deduct interest expense from their taxes, and people will pay more for homes, increasing housing costs. Add to that the nimby’ism of homeowners protecting their inflated home values, and, well here we are.
36
The 13% difference between SF and NYC is the only fair comparison. But I suspect that if the comparison was between Manhattan only and SF it would be more comparable. Both are geographically constrained, desirable places to live. They also have big bureaucracies that make it harder to get to yes. Finally these states (NY and CA) have what we call regulations, things in place to make sure it is safe. Comparing SF to Houston, TX is simply laughable. In TX the regulations are so lax they allow people to build in what is clearly, demonstrably flood plains. No sane regulator should allow that. And Houston, kind of like the "greater" Los Angeles area, simply spreads out, land isn't as costly, though admittedly in LA people prefer to live in certain, more geographically constrained areas of LA raising costs.
This spread is clearly not something SF or Manhattan can do.
Oh and did I mention that little thing called seismic safety as there are earthquakes in SF? It just isn't a simple or correct comparison before even getting around to NIMBYism.
63
@MomT
"...have what we call regulations, things in place to make sure it is safe." With all due respect, I would challenge you to actually demonstrate that all of those regulations actually DO make things safer. Some, of course, do, but most, many or most, I would wager, are exercises in bureaucratic and lawyer justifications...more money to line the pockets of stake holders who are in the game for themselves, not the public interest.
It's not unlike Trump simply saying the magic phrase "national security" to justify tariffs, immigration restrictions, budget busting, moving allocated funds, etc.
7
@MomT, has anyone considered that perhaps San Francisco as New York, London, Paris, etc., is just too ridiculously big and should NOT grow any larger, crowded, congested and polluted? If the peons are being squeezed out, let the rich take care of each other or spend their money flying their youngsters to schools outside the state and moving their businesses to where people can afford to live. They may be forced to do so if current trends continue.
6
@MomT … on a attribution basis, based on the article, it’s clear there are far too many regulations, fees, taxes (graft too, no doubt) and politicians getting their cut to proceed with ‘reasonable’ housing. Oh, take note of an average hourly wage of $90. You have it backwards; San Fran (and NYC) are the exception to the entire world when it comes to housing costs.
5
At the GDR Museum in Berlin I recall an exhibit of a 2 bedroom apartment that is typical of the derided Stalinist housing blocks that were built over much of the Warsaw Pact countries after WWII. A statistic I recall is that the GDR built 3.5 MILLION of these units in 5 years. It would seem to me that if an impoverished Communist nation, decimated by war, could figure this out 75 years ago, we - allegedly, the greatest nation - should be able to figure this out now. In 1987 I went to Budapest by train and rented a room from a widow for $10/night in one of those apartment blocks and her apartment was nicer and bigger than mine.
47
@Steve725
Yes, dictatorships can do a lot since they have the power of the gun to enforce their decrees. I prefer to not live in a dictatorship as do most other people.
4
@Steve725 Well, when you are Stalin, you just do it - take the land, force the labor, and mandate the conditions. Done.
3
The US is still here and the GDR is not (except for that museum). So while our greatness may only be an allegation, GDR is a confirmed loser.
1
We have a similar situation in parts of Ontario. One reason for the stratospheric prices, is that real estate has become such a fantastic investment opportunity. Large numbers of units sit empty, waiting for further price escalation.
This is not something that municipalities can remedy at the local level -- it's senior levels of government that are ignoring their responsibilities, in zoning and in tax measures.
A single remedy that should be considered: build high-speed commuter rail links that enable low-income and homeless people to live in nearby smaller towns; subsidize the ticket prices, and bring some sanity to the market.
63
@Karl
In California, high speed commuter rail is subject to even more regulatory and NIMBY problems than housing!
4
@Karl . Your rail solution makes a lot of sense. Put people farther out where housing/building costs are so much lower. If you drive 100 miles north, east or south of the SF Bay Area, prices drop dramatically.
Here's the catch though. All of the financial, regulatory and - let's be honest - graft issues that have ballooned the cost of CA housing also exist in the cost to build rail. The CA HSR project is the all-time poster child for out-of-control government waste, lies and corruption and virtually nothing has been built yet.
So yes, a rail solution would work in a rational, reasonable setting. But CA is currently not one of those. My wish is that we taxpayers could just write a blank check to a Japanese/Swiss/Chinese rail consortium and leave EVERY SINGLE CA gov't. entity and politician out of rail construction and operation. At least we would know the trains would be built in a cost effective manner and would actually run on time when put into service.
4
@Karl That "solution" honestly just creates a bigger segregation problem. This problem is particularly acute in France where there are brutalist apartment complexes outside of Paris but reachable by the TGV (which is affordable). However, what has happened is the creation of low-income, immigrant heavy ghettos full of crime, violence and radicalism.
1