Housing prices in California have been the worst in the nation for some time, and there’s no relief on the horizon. Bloomberg tells us why. Excerpts, with my comments:
California, the land of golden dreams, has become America’s worst housing nightmare.
Recent wildfires have only heightened the stakes for a state that can’t seem to build enough new homes.
The median price for a house now tops $600,000, more than twice the national level. The state has four of the country’s five most expensive residential markets—Silicon Valley, San Francisco, Orange County and San Diego. (Los Angeles is seventh.) The poverty rate, when adjusted for the cost of living, is the worst in the nation. California accounts for 12% of the U.S. population, but a quarter of its homeless population.
That last bit isn’t solely due to housing prices. While the salubrious climate plays a part – and I’ll admit, I’ve worked for extended periods in both the northern LA ‘burbs and in Silicon Valley, and the weather is to be envied – its more the Free Shit and the permissiveness that allows street bums to shoot up and crap on the sidewalks without consequence that is responsible for the homeless figure.
How did we get here? Simply put, bad government—from outdated zoning laws to a 40-year-old tax provision that benefits long-time homeowners at the expense of everyone else—has created a severe shortage of houses. While decades in the making, California’s slow-moving disaster has reached a critical point for state officials, businesses and the millions who are straining to live there.
And it’s not going to change any time soon? Why? Well, this isn’t going to help:
This fall, as President Donald Trump blamed Democrats for the situation on his swing through the state to raise money for his reelection, lawmakers in Sacramento passed some of the most sweeping legislation in years to address housing affordability. Google, Facebook Inc. and Apple Inc. are throwing billions of dollars at the issue. But nobody’s kidding themselves that it’s enough.
“Broadly speaking, there is no solution to the California housing crisis without the construction of millions of new houses,” said David Garcia, policy director for the Terner Center for Housing Innovation at the University of California, Berkeley.
But you can’t build millions of new houses in California. Google can’t, Facebook can’t, and Apple can’t, for all their billions. Why? See the comments on bad government above. Sacramento simply won’t allow it.
McKinsey & Co. estimated in 2016 that California needed some 3.5 million more homes by the middle of next decade—a figure that Governor Gavin Newsom made a central part of his administration’s goals. A more recent analysis suggests it may take the state until 2050 to meet the target.
Gavin Newsom is a horse’s ass, and will vigorously oppose any relaxing of zoning and regulation that might actually make housing more affordable – primarily by building more houses. And better than houses, something that Bloomberg doesn’t mention – apartment buildings! Some time ago, while on a visit to Japan, I wrote a piece on how Tokyo handles housing by vertical storage. California could learn a thing or two from Japan.
As severe as this sounds, the rest of the country is becoming more—not less—like California. During the longest economic expansion on record, the U.S. has been building far fewer houses than it usually does, pushing prices further out of reach for a vast portion of the population that has barely seen incomes rise.
Government, True Believers, is the problem, not the solution. As long as California remains a single-party state, allowing the elite Left Coast progressives to run the state unchecked, the housing situation is only going to get worse, no matter how many Silicon Valley tech companies try to make things better.