I don’t accept this definition of a subsidy. It essentially says that the difference between the maximum economic utility to the government and the actual use is a subsidy. That renders the term somewhat meaningless.
I’m not talking about banning affordable housing (in CA, it’s called Inclusionary Housing). Mandated inclusionary housing in all developments over 10 units has been a thing for quite some time and I don’t have an issue with that. Inclusionary housing is one aspect, but not the only one or even the most important. Most of the efforts in CA are designed to force an increase in supply at all levels. Planning and approval of building is a complex and sometimes long process. CA has recently passed laws, and seeks to pass new laws, that waive environmental review, waive setback requirements, waive parking requirements, waive height limits, waive design review, waive density limits, waive traffic impact review, etc.
Sure some folks would love to see Coruscant come to life, but that type of maximum density is not what the people who are currently there want. Perhaps Emeryville wants to cater to its business community and densify the entire city and that’s their perogative - but that same approach goes against what residents of other cities actually want.
The debate is reminding me of something that comes up in discussions about gentrication.
Gentrifiers often pat themselves on the back for “cleaning up” a bad neighborhood and turning it into a nice place with good property values. But a lot of that work is not done by the gentrifiers, but by the locality. A “bad” neighborhood doesn’t get a rapid response by the police when crime occurs, but a neighbood with a critical mass of the “right” people does. Street maintenance doesn’t happen in a “bad” neighborhood, but it does in a neighborhood with a critical mass of the “right” people (let’s fix those sidewalks before Karen complains!) These people are not more worthy than the residents who came before them, but they are treated like they are because they have more money. And even though their city was what created the positive conditions for their “nice” neighborhood, they take credit for it by labeling themselves an “urban pioneer”.
Chris Christie famously labeled my town a bunch of communists on the radio and you should see how my neighbors react when a developer proposes a 5 story apartment building.
Sure, they say it’s “selling out” to “corporate developers” but what they’re really worried about is increasing class sizes and having to walk 3 blocks from their parking spot to the new Poke Bowl place.
The value of your property is not the sole value in this situation. There is the value of a commuter’s time, the value of that commuter’s productivity to his or her employer, the value of damage to the environment when people are forced to commute longer distances, the value of children who get less attention from their parents, the mental health of all people who are subject to greater stress because of the physical arrangement of the city they live in.
There is the value of people having to spend more and more on housing and not spending it on something else–that’s harming the overall productivity of the economy.
You’re using government power to seize this value and tack it on to the value of your property, when the value would have gone to all these other things and more. You’re making your personal neighborhood nicer by making worse the lives and the neighborhoods of everyone around you.
I agree with Bone that zoning regulations aren’t strictly speaking a subsidy… but it is like the taxi companies in a city banding together to convince politicians that no more medallions or business licenses should be issued. That’s not a subsidy, but it is a position that harms consumers.
This may be a philosophical difference where we have to agree to disagree. In the first paragraph, I agree with you that there is value in commuters time, productivity, etc. I do not agree that anyone is being forced to do anything. People make those choices to commute longer, etc. because they want the wage associated with that longer commute. Nothing is being seized because it was never possessed in the first place.
I know people who commute via airplane, 2K miles one way each week. That sucks, but the pay is worth it to them. There was a time where I commuted into SF proper. It was really shitty. It took me a bit over 100 minutes each way and I generally hated the commute. But I chose to do that, because the pay was worth it. Based on your calculus, I was somehow subsidizing people who lived in SF. - I don’t think your rationale stands up to scrutiny.
Ehh, semantics. Whatever it is, it’s a policy that restricts economic activity to benefit a relative few (you and your neighbors) at the cost of greater prosperity for the broader community. Maybe there are times in which that’s appropriate – for example, when the “relative few” are truly desperate. But IMO affluent homeowners don’t meet that bar. Government policy (local, state, or federal) shouldn’t restrict economic activity in a way that benefits an affluent few at the cost of greater prosperity for the less affluent many.
Yes, it’s essentially distorting the market by restricting supply. It’d be interesting to see what property values would be like in a truly free market. Lower, I’d bet.
I wouldn’t opppose such a development on the basis of “lowering muh property values!” I would opppose it because the city needs more, rather than less greenspace. If the city were to offset the destruction of those parklands by creating greenspace that is just as high-quality (which would be a mean feat to accomplish, but whatever), then I would accept that as a reasonable alternative. I also would ask the city to consider the big empty parcel just down street from me. I don’t know if the city owns it or what, but it is clear no one is doing anything with it, while lots of people get much pleasure from the parks.
Unlike you, I don’t live in one of the nicest neighborhoods in town. There is no cache to my zip code. My home value is greater than what I paid for it, but it isn’t enough to make me a wealthy person. My neighborhood is well-mixed socioeconically and racially. I feel comfortable labeling two of my neighbors as “rich”, but most of the folks on my street are working class and middle-class. Yet and still, my neighborhood really is awesome. I would not be overjoyed with a low-income housing complex moving in, but I don’t think it would change the character of my neighborhood all that much. It certainly wouldn’t turn me into Henny Penny.
Perhaps if everyone was already used to living in mixed-income neighborhoods, there would be would be less Henny Pennyism over affordable housing intiatives.
If I understand it properly, single-unit costs would go down considerably, but land values could increase. Maybe right now a single acre of land can support 4 detached houses and is worth $4 million, with restrictive zoning. But if zoning is loosened, that acre of land in a desirable area can now support, say, a high-rise with 100 units… each one of those units will sell for a lot less than $1 million, most likely, but collectively will bring in a lot more income than renting 4 detached houses would. So that same piece of land is now worth a great deal more than it was before, even while housing prices have come down considerably.
Here’s a more direct example in CA. CA has what’s called CEQA. Essentially new development must identify and attempt to mitigate environmental impact of new development. In general that’s good right? In reality this imposes large costs on developers because of the hurdles and studies and time that is needed to complete these requirements. The result of this is more restrictive permitting processes for building. So would a practice like this be a government policy that restricts economic activity in a way that benefits an affluent few? Because it does.
This is also a good example. This represents the land owner making a lot of money, more people able to get housing, and all the surrounding home owners seeing their home values decline. As a homeowner, I’d say that’s bad.
People have to live somewhere and work somewhere. Unless they are independently wealthy, that’s something that they have no choice over. Your zoning-based restriction is limiting the places they can live and work. It’s reducing the choice of the potential users of housing, and it’s reducing the choice of the potential providers of housing. It’s taking value out of the economy.
Someone can’t choose to live in the middle of a busy intersection, right? The decision to put an intersection there is affecting the availability of locations for housing, and the resulting costs, in terms of direct housing costs and other factors.
However, we calculate that we need to have an intersection, and it’s going to benefit everyone who gets to use the public roadway to travel on. But the zoning restrictions that create your neighborhood similarly impose costs on the whole community, but benefit only the people who own property in the neighborhood. It’s not giving value to the entire community like an intersection does.
When the range of choices you have is being restricted, you’re being deprived of choice. When you are rich enough to be able to choose a two-thousand mile commute by plane, you’re playing an entirely different ballgame.
Poor people already have severe limitations in their choices, and this zoning restriction is limiting choices even more, in a way that is unnecessary and doesn’t benefit society as a whole. Indeed, it costs society as a whole.
It definitely restricts economic activity, but I’m not sure about benefitting an “affluent few” – in theory, environmental regulations benefit everyone, since everyone breathes the air and drinks the water. I’m sure badly written regulations can fail to do this, and possibly corrupt regulations can benefit an affluent few, but I don’t know what category this one falls into.
But this isn’t restricting economic activity. This is unrestricting it – which, supposedly, provides greater prosperity to everyone. Reducing someone’s home value due to easing economic restrictions is quite different than reducing someone’s home value due to tightening them, wouldn’t you say?
Before labeling something as “bad”, don’t we need more information?
If the homeowners still have positive equity and only lose 20% of the profit that would have otherwise made, then is it fair to say this is really bad? Wouldn’t that be like complaining because you have to pay $3 million in taxes after winning the $15 million lottery jackpot?
If one of the people living in that affordable housing is able to do something beneficial to society (go to a good college and discover the cure for cancer) that they wouldn’t have otherwise been able to do, then is that really a bad outcome? Even the stingy homeowner should be able to appreciate that if something like that were to happen, it would be worth much more than the maximization of their property values.
Let’s say that along with that high-density housing, some businesses are allowed to spring up. Don’t the homeowners benefit by having a grocery store they can walk to? Let’s say the city decides to set up a bus stop. Now the homeowners can take the bus when their BMWs are in the shop or when they are too old to drive.
It seems to me there are other variables that must be considered before kneejerking to the “bad” conclusion.
I actually know several California “refugees” as I call them, who used to live out there but due to the high cost of living, moved here. Like one couple I know, they were offered great jobs in SF but they looked at housing and turned the jobs down.
Also lots of high tech firms are building satellite offices in cheaper parts of the country.
So in effect the OP is right and these “refugees” are doing what he said. They couldnt afford CA and they moved.
I’m sure they are. But “preserving property values” has been an excuse for segregation in the past, and definitely not just in the south.
When our school board wanted to move an elementary school to feed into a different high school (with lower test scores) parents of kids in that school were very upset, and used hurting their property values as an excuse. The school board made the move, test scores went up, and the parents’ property values did not suffer.
Concern for something does not make it happen.
The reason why “nice” neighborhoods are perceived as attractive is because people judge them against other places. Descriptors like “nice” are always relative. We see this with “good” schools and “bad” schools. Your kid goes to a “good” school as long as the other schools makes lower test scores and there aren’t other schools nearby that have higher scores. Only when another school overtakes your kid’s school in test scores do you start to worry about the inferiority of your kids’ education. Doesn’t matter that your fifth grader is learning calculus. If his school isn’t the “best”, he must be getting shafted.
Neighborhoods are the same way. People worry about their neighborhoods losing their character, but really they are afraid their neighborhood will lose status relative to the surrounding area. “If a high-density highrise moves in, the neighborhood will look just like all the other neighborhoods! It won’t be the best any more! We won’t be best!”
I wonder how the OP would feel about a city that decides to make a certain neighborhood (Coolville) the new “it” side of town and invests a lot of resources into building it up. The plan works and suddenly property values in the old “it” side of town stop rising because no one wants to live in Squaresville anymore. Do the homeowners in Squaresville have the right to be angry over all the value the city “stole” from them? In fifty years, should the homeowners of Coolville protest when the city decides to spiffy up the now rundown Squaresville?
Seem to me if all neighborhoods were required to have the same set-asides for affordable housing, then property values would be protected, not “stolen”. If neighborhood X is forced to take on four low-income apartment complexes while neighborhood Y only has to take one, then of course the homeowners in neighborhood X are going to be pissed off. But if the two neighborhoods split the burden evenly, and all the other “nice” neighborhoods in the area follow suit, then it seems to me the property values in aggregate won’t change that much…as long as there is still a “ghetto” side of town to compare things too.
I ask you this, Bone. How would you feel about a plan to fix up all “ghetto” areas closest to you…a plan that an economist predicts would lead to a slowing in your property value appreciation? Would you protest it?
You might need to read up on the French Revolution. When the psychopathic come to power via manipulation of the non-thinking mob the results are unpredictable.
Look, land and space in a particular area are finite and in a society where property rights are still a thing noone else has a right to space inside your walls. If the cost of living goes up the residents can work to change the zoning laws, they can move from the high cost of living area, or they can pay more for services.
Do you think NYC or San Francisco or any other random city owes the rest of the world a place to live?
(The widow and her son refuse the squire’s offer but a year or so later, after they become prosperous, agree to sell the house for $1350.)
I understand why individual homeowners are motivated to keep their own property values as high as they can, but not why they seem to regard constantly rising property values as some kind of natural right.
Well, let’s try some actual numbers to see how this works. In one post you mentioned Belvedere. Looking at apartments.com, the cheapest 1-bedroom apartment in Belvedere (actually Tiburon) is $2,891/mo. Rule of thumb is that rent shouldn’t exceed 30% of gross income. That works out to roughly $114,000/yr.
The base starting salary for a school teacher in the Reed Union School District, which serves Belvedere, is $55,000. In fact, the TOP salary for a teacher is $106,747, plus $1,700 for both a Master’s and PhD. Are the residents of Belvedere willing to increase the salary of every teacher in the district (in some cases more than** double**) so they can live near their work? How about municipal employees? Health care workers?
Heck, the cheapest apartment I could find listed anywhere in Marin County is $1,800/mo., which is still over the target for a beginning teacher.
How far are you willing to drive for $55K? How about $15/hr?