Affordable housing crisis in California

Another, what are they doing moment. So California is outrageously expensive to live. I plan on moving soon, gas prices are still at 3.00 a gallon and renting a room is 750 a month unless you want to live in a bad neighborhood.

So what does California do? They legislate that cities can require developers to have houses at below market prices.

www.latimes.com...

The decision clears the way for Los Angeles and other cities to require developers to sell a percentage of the units they build at below-market rates as a condition of a building permit. Developers also could be given the option of paying into a fund for low-cost housing.

I realize that this is an old article. My question to you is, wouldn't it make more sense to tackle this issue by increasing wages?

This makes me have to rethink my position on minimum wage too. On one hand there isn't enough to go around here that's why there's 50% of the state on government subsidies and on the other hand why don't they let the "free market" dictate policy by allowing the renters o be forced to offer lower cost rentals because no one can afford it?

What do you think?

If you ask me id say there is another crash looming on the horizon for this state as having this many people on welfare subsidies is unsustainable under the current economic model.

a reply to: onequestion

CA is expensive because of supply and demand. You know that simple economic law that progressives refuse to acknowledge.

The reality is that there are a lot of people who want to live in CA. In addition, many of them are highly paid which drives up prices. In addition, some areas of CA have zoning laws which makes it difficult to build more units which puts more upward pressure on prices.

Creating affordable housing units really does not help because all it does is force the developer to raise the prices of the other units to compensate.

It sucks, but it is what it is. Either figure out a way to make more money or find somewhere else to live. No one is forcing you to live in CA.

I'm in the top 1% of income earners and choose not to live in CA because it is too expensive even though I've had job offers in Silicon Valley. You live where you can afford to live.

a reply to: onequestion

Increasing wages would not work. Look at San Fran. Let's say you land a job where you make $150k/year. Wooohoo!!! Oh wait...renting an apartment is $3k/month. Or 24% of your income. Move up to Oregon, make $45k per year, meh... and rent an apartment for $900 a month, still 24% of your income.

Wages are already inflated drastically in many areas of CA as is cost of living. Raising lower end wages will just make cost of living increase over time until those on the low end of the earning pool are back to wanting wage increases because cost of living is so high....vicious cycle...

In Seattle a year or two ago there was an effort to figure out how much housing prices were a function of government regulation. It turns out the "price tag" for government in housing was over $200K per house. Now I, for one, welcome some government involvement in housing construction. Nothing wrong with an electrical inspection, for example. But overall the extra requirements are superfulous and actually causing housing inflation. If the government left housing alone, prices would go down.

And in terms of the market, in many areas the cost of building a house is now more than what you can sell it for anyway. My next-door neighbor is a building contractor who has built several houses in my neighborhood. He managed to scoot out from under the last debacle, but the house in question recently sold for 70% of what it cost him to build it. That is, no profit, just the payoff to the bank for his construction loan.

So I don't think artificially raising wages beyond what jobs are worth is going to help this situation. It's far more complex than that.

a reply to: DrumStickNinja

The average person don't come close to 150k a year.

45k a year is a much more achievable goal.

At what point is there a balance?

The low wage earners are far more numerous than 150k a year, that's damn good money.

a reply to: schuyler

Hmmm interesting didn't know that.

Has the cost of building materials gone up?

Is it because there are way more houses available by the tens of millions then there are actually people buying houses?

Here in OC only 1 in 6 residents can afford to buy a house. In a supply and demand economy that would mean the cost of buying a house is actually lower than renting.

a reply to: onequestion

Ask the government, they're often the ones who step in to "help" and create these circumstances usually as unintended side effects of other policies. In Cali, it is often environmental policy.

Truth is, not everyone can or should live in Cali no matter who desirable the climate is.

Maybe some people might have to more to less desirable place like ... Utah or one of the Dakotas or Kansas ... although I'd prefer people avoid Kansas. It sucks, really, just keep away from us.

originally posted by: onequestion
a reply to: DrumStickNinja

The average person don't come close to 150k a year.

45k a year is a much more achievable goal.

At what point is there a balance?

The low wage earners are far more numerous than 150k a year, that's damn good money.

When you make $45k you live where you can afford to live, not where the guy who makes $150k lives. The guy making $150k doesn't complain that he can't live with the people making $1 million. I don't understand what is so hard about this concept. It means you might not be able to live in the hot hipster neighborhood or your commute might be longer or you might need a roommate. Or you might need to move to a more affordable city.

I've had job offers in higher cost of living cities. I figured out the cost of living and determined it wasn't worth it to me to live there. For some people, they think it is worth it. We all make choices. I don't have the nice weather of NorCal, but I also have a mortgage that is a good 3/4s smaller than it would be in Silicon Valley for the same sized house.

On the flip side, there are other smaller cheaper cities where I'd live like a king. However, I'd be bored as those cities don't have the same culture, arts, etc as Chicago. As such, I didn't think the lower cost of living was worth it to move.

At some point, you have to grow up and learn to make choices.

a reply to: Edumakated

Actually you go where the job is not the other way around.

There's a lot more to the equation than just living where you want to live for a lot of people.

Besides the point this has nothing to do with the fact that Cali is now regulating how much you charge for rent as well.

Have any feelings about that or is this a personal responsibility diatribe?

a reply to: onequestion

You might go where the job is, but if the job puts you on the street, then is it worth it?

If you can't afford the housing by yourself, then you need to consider other options if the job is that important. I believe roommates were mentioned.

originally posted by: onequestion
a reply to: schuyler

Has the cost of building materials gone up?

My impression is that it's more in the line of "requirements" that have increased the cost of building. For example, in one house my neighbor built down the road he told me the cost of excavating and filling this one hole with the proper kind of rock in the proper way (with no dirt contamination) cost him $20,000. The hole was kind of like a pond retention system that took water from the rain that came off the house and stored it for later release into the ground. He couldn't just dig a hole and fill it with gravel. It had to be this specially-certified rock. I took a look at it and it looked like round rock to me. And the way it rained around here the last coupla months, that hole was filled with water after a few days. (REALLY serious rain.) (Reason I know a little bit is because I always walk my dog and visit the construction sites and chat with the guys for a few minutes every day.)

Other newish requirements I can think of include septic and drain fields (MUCH more complicated than they used to be), electrical issues, etc. One I came across myself was the new insulation requirements. They want the house so very tight to retain energy, THEN they require additional venting to prevent toxic build-up of indoor pollution because the house is so tight. Then the government requires the builder to contribute to an "infrastructure fund," and extra few thousand in up-front costs to the schools, a contribution to the fire district, and suddenly what would have been a reasonably modest priced house (The one I'm talking about has a fairly small footprint) is suddenly prices out of range of the normal person.

Another issue is that in "boom" places like Seattle (Amazon, Microsoft) the rents are so high you can't afford to live there, so that pushes people to the outlying areas (like where I live) and pushes up prices there.

Is it because there are way more houses available by the tens of millions then there are actually people buying houses?

In this case the credit crunch contributed because nobody could get a loan for a long time. People were otherwise qualified, but the banks weren't lending. Plus there were a ton of defaults, so bank-owned housing was lowering prices, too.

Here in OC only 1 in 6 residents can afford to buy a house. In a supply and demand economy that would mean the cost of buying a house is actually lower than renting.

I hear you. And places like California are so overbuilt anyway that they don't have enough water or electricity to serve all the stuff that is there. So where are all these people coming from? I guess you could easily qualify to buy a house in Detroit, but who would want to live there? There aren't any jobs and you can't walk the streets safely at night.

a reply to: onequestion

That article and the situation you describe are really puzzling. I mean.....why should developers be forced to sell housing, (Single family detached or townhouse/apartment?) when there's acres of Section 8 apartments. If there's a housing shortage........build more Section 8, don't rob the pockets of the Developers. That's the way it works in Texas at least. Here, when a developer lays out a suburban single family housing project of say 10,000 houses, they are offered incentives in the form of loan breaks to build Section 8 Apartments adjacent to and around the perimeter of the single family housing subdivision.

I really don't understand California, I guess.

Everything in California is expensive so why would anybody be shocked that housing is expensive?
Landlords are expected to pay property taxes on their rentals and don't get many exemptions. Add the cost of insurance and you have a big chuck of change.

a reply to: TonyS

Me either that's why I'm leaving.

originally posted by: onequestion
a reply to: TonyS

Me either that's why I'm leaving.

Didn't you just move there a couple of months ago?

a reply to: thesaneone

Yeah 6-7 months ago I didn't realize how crazy this place got.

Time to move.

a reply to: onequestion

You should check out the scene in Arizona lots of building going on in the suburbs outside of Phoenix.

I have lived in California for a long time and the reason why the housing price is so high is because of it sanctuary cities. How do you inflate a housing market? Create a demand for it! illegal immigrants know they are not going to get caught and that there is already a community for them here " that doesn't require learning English" plus even if they get caught they will not get deported unless they commit a crime. I manage an apartment complex with 55 units our one bedrooms at 900 to 950 and that's actually cheap. The reason they can get away with the outrageous prices is because people are willing to move into an 1b apartment secretly with like 4 other people. Yeah they get caught but their demand and willingness to pay that prices drives up the price for everyone else. The turnover is stupid in apartment complexes to boot with people just trying to find cheaper places to live and moving out 3 or 4 months after they move in.

Every year the prices rise like the damn tide $25! After 4 years your looking for some place new to live. Also the cheaper the place the higher the chances of having a slumlord who will never fix anything. The housing market needs to die and for that to happen illegal immigration needs to stop asap. Its already reaching a point where people are living in cars and cant afford the rent which means the market is at a tipping point. a 2 bedroom house shouldn't cost more then a half a million.

a reply to: onequestion

Check out places like SD, no income tax. Cheap to live. Whatever state, check out how much it cost to work and live there.....BEFORE you move.

Affordable housing crisis in California

There is no such thing as affordable housing in California. A couple decades ago on the way to the most miserable place on earth (Ft Erwin Ca) in the Mohave desert on the way to the anus of the galaxy (death valley) I passed a 30 year old dilapidated trailer home with no utilities on a small acreage inhabited by a dessicated horned toad, a scrawny dying cactus and a depressed and suicidal tumbleweed on sale for 250,000 dollars. 250,000 dollars.