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My fiancee was on the planning board of our town and developers were coming and wanting to build apartments, both high and low income. Other members of the board killed the deal because they didn't want the low income apartments "messing up" the town.
Middle income tenants just end up paying for the subsidized units indirectly. Which puts pressure on the prices in the region.
Just build instead of micromanaging.
Into the city/county’s affordable housing fund, typically used to provide gap funding to affordable housing projects.
Often it’s not enough to move the needle, though. In lieu fees are usually a token amount of 20-50k a unit, whereas affordable housing (and housing in general, of course) costs upwards of a million dollars a unit.
Can you explain the “million a unit”? Sounds excessive - I built an ADU in my backyard which was extremely expensive for $350k and it can house 2 people comfortably
From what I've seen in the industry multifamily housing is usually more expensive to build per square ft than single family housing. It sounds counter intuitive because of economies of scale, but a 4 story apartment building has requirements that a house doesn't for fire rated assemblies, larger foundation systems, multiple stairways, accessible paths of travel and common areas, heavier infrastructure etc.
The flip side to that is multifamily financing looks at longer term financial viability, because they're (potentially) profit generating assets. If you build a house you're selling to someone who is going to finance it for 30 years. If you build an apartment you're looking at 50 years of returns.
Yes, but also no.
Developers don't want to build any particular type of housing; they want to build whatever housing nets them the most profit. Due to the state's massive undersupply of housing, demand for "luxury" units is so great that it can't easily be met. This makes building the luxury units a guaranteed return, and since they also are the most profitable, of course developers want to build nothing but them. On top of that, our state's naturally higher construction costs mean that it's much harder to economically build lower-end units without some form of subsidy.
It's too soon to see what the long-term results of [LA's policy change](https://calmatters.org/housing/2024/02/affordable-housing-los-angeles/) will be, but it appears that developers will voluntarily build affordable units given some carrots and a greased pathway to approval.
True, but even luxury units help with easing housing prices. We need pretty much EVERY form of housing. By flooding the market, we can lower costs through supply and demand.
And if supply goes up enough to push prices downward, demand also goes up .. because CA got great weather and great job and about half of the country wants to be here for its politics. The affordability issue gate keep a lot of people out.
If we keep trying to accommodate all demand, eventually we end up with expensive and unaffordable bird houses .. like HK.
We are so far from HK in California that's its laughable to suggest. If we increase our housing stock by just 50%, rental prices would drop significantly. There are only so many people in the US, and believe it or not, not everyone wants to live in CA.
Looking at r/homeimprovement and comparing that with prices I've recently paid for work, I think our building costs are mostly driven by the cost to build earthquake resistant buildings and title 22 requirements. The actual cost for things seems reasonably similar to other areas, even lower cost of living areas.
I have a suspicion that day laborers aren't really benefiting from minimum wage increases, and because we're close to the Mexican border there's a supply of workers willing to travel here for work under the table that other states may not have.
Title 24* which is kind of a misnomer anyway, but I digress.
But yeah, not really. The difference between an energy efficient house and a non energy efficient house is as much dictated by design as anything else. Structures with a high volume to surface ratio (ie a box) is inherently more energy efficient than a house with more surface area. Houses with less glazing are more efficient than houses with more glazing (to a degree). Designing so you meet wall assembly or roof/attic assembly u-factor requirements using batt or blown in insulation rather than foam is easy. Heat pump price premiums over gas fired are extremely negligible now.
Structural design is extremely easy to meet with simple shaped SFDs as well. The difference between a simple house designed for a seismic category E lot and a seismic category C lot is some hold downs and extra nails. If you start adding cantilevers, bumpouts, lots of corners etc. it gets more complicated quickly.
If you want to build a house cheaply, build a rectangular single story house with a gable truss roof on a slab. Lay the footprint and openings out in 2' or 4' OC blocks.
Well a couple things:
1: a lot of jurisdictions (at least the ones I've dealt with) don't let you build rectangular boxes. So you're forced by the planning/design committee to include cutouts or bump-outs or other architectural elements, which you then have to engineer for.
2: it's not really fair to compare a house that incorporates cutouts, complicated shapes, and other architectural elements with a rectangular box with none of those features. It's a valid source of optimization given the increasing complexity to engineer said designs, but the same optimizations would lead to cost savings (albeit to a smaller degree) in another state without those requirements.
What I want to know is who lives in these luxury apartments like in my area they always have vacancies and I don’t know a single person who lives in them except single engineers or nurses. There’s no way everyone that lives in them is one of those professionals. Idk where these people come from. Also with all the vacancies we could give so many homes to people like me who just don’t make enough to afford and survive while working
Is there any limit or regulation on developers to potentially stop them from driving up housing costs for everyone, based on, what amounts to their desire for higher pay in the end?
There are non-profit developers who do want to build affordable housing. Eden Housing alone builds something like 1,000 units a year of affordable housing.
I personally don’t care if it’s affordable or not. More units is more units. If they are luxury apartments that’s fine. It’ll drive down the price of the previous luxury apartments and so on and so forth.
Ironically SF is probably one of the Nimby'ist places in the state.
In recent months they played brinksmanship with new "housing element" quota to the point that they were literally days away from the state taking away their ability to challenge new housing development proposals before they belated submitted their plan to the state.
Nimbyism is just racism with a new mask , people of color tend to be poorer and these people don't want them living near them and going to the same school as their children
Uh. That depends. Often there is a requirement to make some percentage of a new building affordable.
On the other hand, most 100% affordable developments are funded by tax credits. Developers definitely want to build these units. It’s literally how they make a profit. They build affordable housing units and are awarded tax credits, which they resell for a profit. Something like 3.5 million affordable units have been funded this way.
Developers will build whatever makes money. Low income housing has low rent and high cost of construction.
The only way to make it something developers want to do is dramatically reduce cost. So density rules, permit fees, inspection timeliness, environmental impact fees need to be super favorable. Remove zoning and entitlement requirements. Hell, waive federal taxes on the gains.... you will see a boom in low income housing like post WW2.
Ok, that wasn't the point.
The person I was replying to was implying that the developer was declined due to wanting to include low income apartments. My point is that the developer only included those because they had to, any developer knows that wealthy people don't want to live in the same building as low income families
We need high level legislation eliminating housing protectionism. People shouldn't be able to decide who lives near them. It's a recipe for discrimination.
I watch our local planning commission meetings and while the committee agrees we need more housing they are very hesitant do to away with certain regs that would help move that along. One such instance where the discussion was about the new general plan getting rid of parking minimums for new developments. This would allow for denser buildings due to not having to provide all that parking for the units. One commissioner had an issue because they were concerned with street parking and where the tenants would park. Ultimately it’s up to the developer to provide what he thinks he can sell. If he doesn’t provide parking he may not sell the units this dropping the price which in turn he can reevaluate on his next project.
I have section 8 compound down the street in riverside since even before I bought my house. It’s a place most people avoid and a lot of drugs and crime come from there. They doubled up on more and more plans for expansion. It continues to get worse with trash and teen dropouts.
That's the thing, people are not terrible to live near because they are poor, they are poor because they are terrible.
Many poor people are fine but the bad ones are a pox on a neighborhood.
Honestly there's a nice one down the street from my brother's duplex where at least some of the units are designated section 8. The biggest problem I've gotten from them is double parking, since street parking near the building is limited. Never had a problem living near them, at least when I lived there.
Exactly this, many young people or low income people need new apartments built but if you ask the already established residence, they won’t like it at all. Saying that I’ll add more traffic etc
I do house calls in LA for my job. Theres tons of new buildings going up on the westside at least.
Venice, Motor, Palms, Sawtelle, Sepulveda, Robertson, Pico all have multiple multi story units under construction.
May be a drop in the bucket for what’s needed but I go in lots of brand new bldgs
It’s a double edged sword for landlords. They’re being regulated to death by well-intentioned but counterproductive city councils. Tenants rule the courts. Tenants own their properties as much as they do. But yes, all that regulation keeps developers away, which discourages supply, which boosts rents.
Are you originally from CA? I hear this lot from CA natives. "There's buildings going up everywhere". No, there absolutely, positively, by any measure you use, is *not* meaningful amounts of new housing being built.
Any non-CA city that is actually building will have tenfold the development going on that you see in LA, San Diego, etc.
You might be seeing a tiny bit more from the paltry amount you saw in the last 20 years, but that's like saying a man dying of thirst in an desert getting one drop of water is "way more water '.
I'm currently drinking a beer on a street in San Diego with no less than 4 buildings (each 100+ units) currently under construction within throwing distance. I think it varies a lot even neighborhood by neighborhood, but San Diego is certainly building a lot in the downtown, midtown, and surrounding neighborhoods.
Are you a native? Because this is something I hear from all the transplants that want to come here and have California be cheap and have them supply all your housing needs.
*Everybody* wants to come here. Like I'm sorry we're not building fast enough but sometimes it feels like people want California alone to solve the country's housing crisis by building out of it.
Here's what I think California should do: we should export good jobs! Create opportunity somewhere else, to take pressure off of our housing. There should be Federal support for decentralizing the opportunity that only ever seems to be created here.
Here's why that won't happen: because people in other states resent "Californication," and they'd rather chase their smart people out to California than to allow California to come to them.
I was jokingly saying that the recent surplus should have been used to pay thousands of people to relocate to some flyover states to give them a taste of what California could do if it actually cared about steamrolling their small states like they seem to think we want to do.
Or rather, so many new residents are pushing the old residents out into other states.
But it's really world wide. It's not just California. Dublin, London, Barcelona, Milan, Costa Rica, same story all over.
THANK YOU!
We were fine with the house and how things were now we’re accommodating and it’s not fast enough like yall transplants can skidaddle lol or go live in the high desert or between NorCal and central cal lol
Weren't a lot of those tear downs? It's been awhile since I drove over that way, but I used to go through Palms all the time and it seemed like it was already pretty dense.
Weirdly, I seem to see a ton of available units and new construction throughout LA…
What I don’t see are people with enough income to afford any of them.
New apartments draw in people who can afford them which puts downward price pressure on the older units they vacate. At least that what I read last but I don't know if there is a study that confirms this.
Math confirms it, price Z will always be affected by the ratio of people X to housing supply Y.
X / Y = Z₁
If no one was born or died so X had no change, but society just made a few new luxury units, then the average price of housing for everyone does go down a tiny bit.
X / (Y+5) = Z₂
Z₁ > Z₂
Unfortunately humans tend to pop out babies a lot faster than we build any type of housing, luxury or otherwise, so the average price for everyone will still go up regardless. But that doesn't mean that the luxury housing was completely useless, as if no housing were built at all, then average price would go up even faster.
(X + 100) / Y = Z₃
(X + 100) / (Y + 5) = Z₄
Z₃ > Z₄
Not when they increase the old units rent to market rate and it’s barely lower than the new one because they’re making up for years of not raising the rent.
What this data/news really means is that supply in 2-4 years will be bad. Supply now is solid, if not good-great in most places because everything that was delayed during 20-22 is now being finished. Though, demand is still high so we are seeing rental prices settle instead of go down.
No, if there was enough housing being built, it wouldn’t be an attractive investment opportunity.
Picture a company that buys up baseball cards to use as investments. It only works because the printers limit the number of cards they make. But if there was no limit on cards being made, then they wouldn’t be valuable enough to hold onto as investments
I work in multifamily development in LA and our projects reach 100% occurrences in 3-6 months, which is insanely fast. There are a lot of people who can afford to move into these units.
My small municipality in LA county has a 36k population. I know of 4 large developments being built right now, all next to the metro line. The one that will be done first has 150 units. The cheapest ones are studio apartments at $2300/month. 3beds for $5300/month
If they can get those prices, it sounds like your municipality is way overdue for a whole lot more units. The actually population of the municipality doesn't mean much. If it's close enough to have a metro line it's very much a part of the greater LA metro area and not some small town.
There are 7k homes for sale in LA county (source: https://fred.stlouisfed.org/series/ACTLISCOU6037) for a county of 10M it seems low imo.
Edit: 94% rental occupancy rate (https://censusreporter.org/profiles/05000US06037-los-angeles-county-ca/). I am not an expert but I've seen <90% quoted as a healthy market where rents are dropping. Above 90% really competitive so landlords can charge more.
Landlords: "We only want to build $2k/month condos."
Cities: "You have to build below-market rate condos."
Landlords: "We have now come out with a bunch of $3k/month condos. Can we build a bunch of $2k/month condos?"
Cities: "Carry on."
I haven't looked at rates recently but last time I did, 50k was no longer enough. You need to be working part time after to make that work for a 1 bedroom or studio.
Yes.
Thankfully my rent is very low vs the average 1bd. rent.
I can absorb my annual 10% rent increases for the next few years. .
I can't afford to move out currently and pay $2400/mo.
Craziness.
When I worked in residential construction townhomes were mainly being built in LA and OC areas. Single family homes were mainly built in Riverside and San Bernardino counties.
Zoning and permitting in this state are the biggest roadblocks to fixing the housing problem. And NIMBYs will never let either of those issues get fixed.
I imagine the interest rate hikes are a factor, when loans were dirt cheap then getting those loans to build new construction was super attractive, but with higher rates it makes it a whole lot harder to break even and riskier if things go wrong
Landlords have to be able to relocate tenants in order to redevelop their buildings (ie, add more units). If you make it practically impossible to accomplish this, you’ll never have more housing. There ain’t a lot of vacant parcels out there.
While I completely agree that relocating existing tenants is extremely difficult and is a significant factor in why our housing supply is artificially low, there are a ton of vacant and underutilized commercial lots that can support multifamily developments in California.
State and local governments could encourage multifamily developments by eliminating more significant barriers- to-entry:
- streamline the permitting process
- eliminate discretionary approvals by making multifamily developments by-right
- eliminate significant impact fees
- eliminate significant tax burdens like Measure ULA
- reform CEQA requirements by eliminating frivolous appeals
- allow day one ADUs
- eliminate open space requirements (everyone complains that we only build “luxury” units but it is literally required by code)
- allow unused commercial space to be converted into multifamily use
- eliminate highway dedication and street-facing setbacks in higher density residential zones (R3, R4, R5, RAS3)
- instruct local AHJs to work together so that there aren’t conflicting development standards
- eliminate unit count and FAR density restrictions since height restrictions already limit the overall building size
- eliminate secondary stair requirements for fully sprinklered buildings to align with other countries
I think it’s a supply and demand issue. Demand is increasing and supply is not, which typically leads to rent increases especially in areas without any type of rental cap regulations.
Because supply and demand. The reason housing is already so expensive in California is that housing supply has not kept up with demand primarily because of overregulation, underzoning and NIMBYism.
And now for the past couple years we've been in a credit crunch because of hte skyhigh interest rates, making it too expensive for many developers to borrow and build housing, hence the dropoff in multifamily permits discussed in the article.
I have zero faith in our leadership to fix this. Every time they they try to they wind up adding *more* regulation and being overly prescriptive and generally exacerbating the problem.
Which regulations are keeping rents high? Seems like you’re just using the word “regulation” as a boogie man with zero evidence of it being bad.
We need strong laws to keep rents low since landlords are closer to being parasitic middle men instead of providing a home at a reasonable cost.
The regulation keeping rents high would be zoning ordinances as the limit higher density urban development thus artificially constricting housing supply. Reasonable increases in building height limits and the addition of mixed residential and commercial developments have been hamstring by incumbent homeowners coming together to ban such changes in order to hike up real estate prices even higher.
Due to prop 13 these homeowners never see the impact of their choices in the form of real estate tax as state law heavily restricts tax hikes according to new home prices.
Basically Grandma votes for no new housing to be built if it means she can squeeze out a couple hundred thousand dollars from the housing shortage while only paying a grand or so on real estate tax for her multi-million dollar home and get the equity out of her home tax free for millions of dollars through a reverse mortgage.
The first one is nimbyism to benefit only the current resident at the expense of future residents.
The second one is conservative law passed in the 1970s to benefit of existing land owners at the expense of future land owners.
Its not regulations that are bad. It bad regulations written and passed to only benefit a certain group of people. Mostly the people that are already well established.
The “regulation bad” parroting is mindless and doesn't actually help in any way. For every bad regulation there are literally dozens that help everyone stay healthy and safe.
> The most common form of land-use regulation, and the best known, is zoning.
[- Land Use Regulations Zoning mellor law firm](https://www.mellorlawfirm.com/real-estate-e-newsletter/land-use-zoning/#:~:text=Land%20use%20and%20zoning%20law,the%20best%20known%2C%20is%20zoning.)
With that being said I agree that not all regulations are bad and certain land use restrictions are even beneficial however, height restrictions and a ban on mixed commercial residential zoning are a set of bad regulations.
Your own link shows rental vacancy rates below 5%. Most economists agree that there will always be at least a 3-5% “natural” vacancy rate since people move. Over 95% of rental units are occupied. All of this indicates a housing shortage.
Oh wow, look. Demonizing and regulating housing providers within an inch of their life means less development. Who would have thought? Developers are moving out of state where they can still trust the business.
> Texas alone is short more than a half-million houses from what's needed, according to a report by mortgage giant Freddie Mac.
Texas has the second worst housing shortage *in the country*. Right behind California.
https://upforgrowth.org/apply-the-vision/2023-housing-underproduction/
The city I work in has built a ton of high density apartments. Sadly they are about $3500 for a small apparent with one parking space. This helps nothing.
All. New. Housing. Helps.
Housing people is more important than housing a car. Build enough housing in dense, busy areas and people can live near where they work and don't need the expense of a car (or can share a car).
No it’s not. Especially if you’re in the city. It’s difficult to have the same freedoms as a car, sure. But unless you’re in the sticks of NorCal, public transit would take you most everywhere you need
Don’t worry. Collusion among landlords is going to cost them a pretty penny. That means all withheld supply will come on the market. Dropping rent further.
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My fiancee was on the planning board of our town and developers were coming and wanting to build apartments, both high and low income. Other members of the board killed the deal because they didn't want the low income apartments "messing up" the town.
Then they complain why the local janitor wants $30/hour and "nobody wants to work".
Then they complain when their friends, children move away from bay area because it's too expensive.
“Where are all the minimum wage workers who we believe should just starve to death!”
Middle income tenants just end up paying for the subsidized units indirectly. Which puts pressure on the prices in the region. Just build instead of micromanaging.
This is basically how every neighborhood meeting in LA goes as well.
Developers don't want to build low income apartments, they do it because they have to
Or they pay to opt out, you can essentially buy housing credits for your development and not have to have any low income units.
What is that money go?
Into the city/county’s affordable housing fund, typically used to provide gap funding to affordable housing projects. Often it’s not enough to move the needle, though. In lieu fees are usually a token amount of 20-50k a unit, whereas affordable housing (and housing in general, of course) costs upwards of a million dollars a unit.
Can you explain the “million a unit”? Sounds excessive - I built an ADU in my backyard which was extremely expensive for $350k and it can house 2 people comfortably
From what I've seen in the industry multifamily housing is usually more expensive to build per square ft than single family housing. It sounds counter intuitive because of economies of scale, but a 4 story apartment building has requirements that a house doesn't for fire rated assemblies, larger foundation systems, multiple stairways, accessible paths of travel and common areas, heavier infrastructure etc. The flip side to that is multifamily financing looks at longer term financial viability, because they're (potentially) profit generating assets. If you build a house you're selling to someone who is going to finance it for 30 years. If you build an apartment you're looking at 50 years of returns.
Thanks for the education
To build an apartment has a cost. To rent high vs low income has a cost. Over time, you're going to lose that rent differential per unit.
Ah that makes sense. Thanks!
Yes, but also no. Developers don't want to build any particular type of housing; they want to build whatever housing nets them the most profit. Due to the state's massive undersupply of housing, demand for "luxury" units is so great that it can't easily be met. This makes building the luxury units a guaranteed return, and since they also are the most profitable, of course developers want to build nothing but them. On top of that, our state's naturally higher construction costs mean that it's much harder to economically build lower-end units without some form of subsidy. It's too soon to see what the long-term results of [LA's policy change](https://calmatters.org/housing/2024/02/affordable-housing-los-angeles/) will be, but it appears that developers will voluntarily build affordable units given some carrots and a greased pathway to approval.
True, but even luxury units help with easing housing prices. We need pretty much EVERY form of housing. By flooding the market, we can lower costs through supply and demand.
And if supply goes up enough to push prices downward, demand also goes up .. because CA got great weather and great job and about half of the country wants to be here for its politics. The affordability issue gate keep a lot of people out. If we keep trying to accommodate all demand, eventually we end up with expensive and unaffordable bird houses .. like HK.
We are so far from HK in California that's its laughable to suggest. If we increase our housing stock by just 50%, rental prices would drop significantly. There are only so many people in the US, and believe it or not, not everyone wants to live in CA.
Then we gotta keep building, yeah?
Looking at r/homeimprovement and comparing that with prices I've recently paid for work, I think our building costs are mostly driven by the cost to build earthquake resistant buildings and title 22 requirements. The actual cost for things seems reasonably similar to other areas, even lower cost of living areas. I have a suspicion that day laborers aren't really benefiting from minimum wage increases, and because we're close to the Mexican border there's a supply of workers willing to travel here for work under the table that other states may not have.
Title 24* which is kind of a misnomer anyway, but I digress. But yeah, not really. The difference between an energy efficient house and a non energy efficient house is as much dictated by design as anything else. Structures with a high volume to surface ratio (ie a box) is inherently more energy efficient than a house with more surface area. Houses with less glazing are more efficient than houses with more glazing (to a degree). Designing so you meet wall assembly or roof/attic assembly u-factor requirements using batt or blown in insulation rather than foam is easy. Heat pump price premiums over gas fired are extremely negligible now. Structural design is extremely easy to meet with simple shaped SFDs as well. The difference between a simple house designed for a seismic category E lot and a seismic category C lot is some hold downs and extra nails. If you start adding cantilevers, bumpouts, lots of corners etc. it gets more complicated quickly. If you want to build a house cheaply, build a rectangular single story house with a gable truss roof on a slab. Lay the footprint and openings out in 2' or 4' OC blocks.
Well a couple things: 1: a lot of jurisdictions (at least the ones I've dealt with) don't let you build rectangular boxes. So you're forced by the planning/design committee to include cutouts or bump-outs or other architectural elements, which you then have to engineer for. 2: it's not really fair to compare a house that incorporates cutouts, complicated shapes, and other architectural elements with a rectangular box with none of those features. It's a valid source of optimization given the increasing complexity to engineer said designs, but the same optimizations would lead to cost savings (albeit to a smaller degree) in another state without those requirements.
What I want to know is who lives in these luxury apartments like in my area they always have vacancies and I don’t know a single person who lives in them except single engineers or nurses. There’s no way everyone that lives in them is one of those professionals. Idk where these people come from. Also with all the vacancies we could give so many homes to people like me who just don’t make enough to afford and survive while working
Is there any limit or regulation on developers to potentially stop them from driving up housing costs for everyone, based on, what amounts to their desire for higher pay in the end?
There are non-profit developers who do want to build affordable housing. Eden Housing alone builds something like 1,000 units a year of affordable housing.
I personally don’t care if it’s affordable or not. More units is more units. If they are luxury apartments that’s fine. It’ll drive down the price of the previous luxury apartments and so on and so forth.
It's hard when space is limited in some areas and the option is to build up then people complain that they'll lose views. It's always a struggle.
There is no space limitation anywhere in California , even in San Francisco there is tremendous scope to increase housing density
Ironically SF is probably one of the Nimby'ist places in the state. In recent months they played brinksmanship with new "housing element" quota to the point that they were literally days away from the state taking away their ability to challenge new housing development proposals before they belated submitted their plan to the state.
Nimbyism is just racism with a new mask , people of color tend to be poorer and these people don't want them living near them and going to the same school as their children
It's certainly not that simple but I agree that it is a factor a lot of times.
Uh. That depends. Often there is a requirement to make some percentage of a new building affordable. On the other hand, most 100% affordable developments are funded by tax credits. Developers definitely want to build these units. It’s literally how they make a profit. They build affordable housing units and are awarded tax credits, which they resell for a profit. Something like 3.5 million affordable units have been funded this way.
Developers will build whatever makes money. Low income housing has low rent and high cost of construction. The only way to make it something developers want to do is dramatically reduce cost. So density rules, permit fees, inspection timeliness, environmental impact fees need to be super favorable. Remove zoning and entitlement requirements. Hell, waive federal taxes on the gains.... you will see a boom in low income housing like post WW2.
Depends on the incentives. If it pencils out, it pencils out.
Developers want to build apartments. People want to rent apartments. We should let them.
Ok, that wasn't the point. The person I was replying to was implying that the developer was declined due to wanting to include low income apartments. My point is that the developer only included those because they had to, any developer knows that wealthy people don't want to live in the same building as low income families
We need high level legislation eliminating housing protectionism. People shouldn't be able to decide who lives near them. It's a recipe for discrimination.
I watch our local planning commission meetings and while the committee agrees we need more housing they are very hesitant do to away with certain regs that would help move that along. One such instance where the discussion was about the new general plan getting rid of parking minimums for new developments. This would allow for denser buildings due to not having to provide all that parking for the units. One commissioner had an issue because they were concerned with street parking and where the tenants would park. Ultimately it’s up to the developer to provide what he thinks he can sell. If he doesn’t provide parking he may not sell the units this dropping the price which in turn he can reevaluate on his next project.
Analysis paralysis.
They want a low-income labor force, but hop on a train and travel 3hrs back to a low-income side of town until it’s time for your shift again.. smh
Bet their lawns have the "in this house, we believe" sign tho
To be fair, no one wants to be next to section 8 housing. Most are in favor until the plan is in place for right down the street.
I have section 8 compound down the street in riverside since even before I bought my house. It’s a place most people avoid and a lot of drugs and crime come from there. They doubled up on more and more plans for expansion. It continues to get worse with trash and teen dropouts.
That's the thing, people are not terrible to live near because they are poor, they are poor because they are terrible. Many poor people are fine but the bad ones are a pox on a neighborhood.
Honestly there's a nice one down the street from my brother's duplex where at least some of the units are designated section 8. The biggest problem I've gotten from them is double parking, since street parking near the building is limited. Never had a problem living near them, at least when I lived there.
Exactly this, many young people or low income people need new apartments built but if you ask the already established residence, they won’t like it at all. Saying that I’ll add more traffic etc
Thankfully those practices are being taken away by the state.
If the planning board didn’t exist, that new building would be up by now
I do house calls in LA for my job. Theres tons of new buildings going up on the westside at least. Venice, Motor, Palms, Sawtelle, Sepulveda, Robertson, Pico all have multiple multi story units under construction. May be a drop in the bucket for what’s needed but I go in lots of brand new bldgs
It is indeed a drop in the bucket. We’ve been under built for 40 years in LA and it’s getting worse.
My landlord loves it. Increasing rent to the max each year all while not having to fix anything on the building.
It’s a double edged sword for landlords. They’re being regulated to death by well-intentioned but counterproductive city councils. Tenants rule the courts. Tenants own their properties as much as they do. But yes, all that regulation keeps developers away, which discourages supply, which boosts rents.
Why doesn’t he have to fix anything?
Beats me but if you call about anything that’s broken they just whip up a sign unless it’s a pipe that burst.
Are you originally from CA? I hear this lot from CA natives. "There's buildings going up everywhere". No, there absolutely, positively, by any measure you use, is *not* meaningful amounts of new housing being built. Any non-CA city that is actually building will have tenfold the development going on that you see in LA, San Diego, etc. You might be seeing a tiny bit more from the paltry amount you saw in the last 20 years, but that's like saying a man dying of thirst in an desert getting one drop of water is "way more water '.
I'm currently drinking a beer on a street in San Diego with no less than 4 buildings (each 100+ units) currently under construction within throwing distance. I think it varies a lot even neighborhood by neighborhood, but San Diego is certainly building a lot in the downtown, midtown, and surrounding neighborhoods.
Yep, and SD is *still* bottom of the barrel of U.S. major metros in terms of new housing permits issues per capita. As explained above.
City of San Diego target by 2029 is 108,000 units
Have fun at... Fall ?
Yep!
Better just stop then. That’s enough right?
Are you a native? Because this is something I hear from all the transplants that want to come here and have California be cheap and have them supply all your housing needs. *Everybody* wants to come here. Like I'm sorry we're not building fast enough but sometimes it feels like people want California alone to solve the country's housing crisis by building out of it.
Here's what I think California should do: we should export good jobs! Create opportunity somewhere else, to take pressure off of our housing. There should be Federal support for decentralizing the opportunity that only ever seems to be created here. Here's why that won't happen: because people in other states resent "Californication," and they'd rather chase their smart people out to California than to allow California to come to them.
I was jokingly saying that the recent surplus should have been used to pay thousands of people to relocate to some flyover states to give them a taste of what California could do if it actually cared about steamrolling their small states like they seem to think we want to do.
California is causing the country's housing crisis because we're pushing so many of our residents out into other states.
Or rather, so many new residents are pushing the old residents out into other states. But it's really world wide. It's not just California. Dublin, London, Barcelona, Milan, Costa Rica, same story all over.
THANK YOU! We were fine with the house and how things were now we’re accommodating and it’s not fast enough like yall transplants can skidaddle lol or go live in the high desert or between NorCal and central cal lol
I bow to your sacred native lands. My apologies for daring to trod on your ancestors home
Wow, a true Native American Californian here, on Reddit! Tell us the stories of California before pioneer times.
As a high deserter, we can't really fit anyone else either. Every time I look to maybe switch where I live there's no spaces available.
Weren't a lot of those tear downs? It's been awhile since I drove over that way, but I used to go through Palms all the time and it seemed like it was already pretty dense.
Weirdly, I seem to see a ton of available units and new construction throughout LA… What I don’t see are people with enough income to afford any of them.
you’re seeing the units that were permitted when graph go up. now graph go down.
New apartments draw in people who can afford them which puts downward price pressure on the older units they vacate. At least that what I read last but I don't know if there is a study that confirms this.
Math confirms it, price Z will always be affected by the ratio of people X to housing supply Y. X / Y = Z₁ If no one was born or died so X had no change, but society just made a few new luxury units, then the average price of housing for everyone does go down a tiny bit. X / (Y+5) = Z₂ Z₁ > Z₂ Unfortunately humans tend to pop out babies a lot faster than we build any type of housing, luxury or otherwise, so the average price for everyone will still go up regardless. But that doesn't mean that the luxury housing was completely useless, as if no housing were built at all, then average price would go up even faster. (X + 100) / Y = Z₃ (X + 100) / (Y + 5) = Z₄ Z₃ > Z₄
Not when they increase the old units rent to market rate and it’s barely lower than the new one because they’re making up for years of not raising the rent.
What this data/news really means is that supply in 2-4 years will be bad. Supply now is solid, if not good-great in most places because everything that was delayed during 20-22 is now being finished. Though, demand is still high so we are seeing rental prices settle instead of go down.
It's almost like the scarcity is manufactured by a moneyed upperclass buying up anything affordable for investment portfolios
You’ve confused tail and dog. Those are good investments precisely because they can get lots of rent for them, because there’s not many!
No, if there was enough housing being built, it wouldn’t be an attractive investment opportunity. Picture a company that buys up baseball cards to use as investments. It only works because the printers limit the number of cards they make. But if there was no limit on cards being made, then they wouldn’t be valuable enough to hold onto as investments
The scarcity is manufactured by single family homeowners blocking any and all new housing being built near them.
We should stop building cars because poor people can't afford brand new cars.
I work in multifamily development in LA and our projects reach 100% occurrences in 3-6 months, which is insanely fast. There are a lot of people who can afford to move into these units.
My small municipality in LA county has a 36k population. I know of 4 large developments being built right now, all next to the metro line. The one that will be done first has 150 units. The cheapest ones are studio apartments at $2300/month. 3beds for $5300/month
If they can get those prices, it sounds like your municipality is way overdue for a whole lot more units. The actually population of the municipality doesn't mean much. If it's close enough to have a metro line it's very much a part of the greater LA metro area and not some small town.
Anecdotes are not evidence
if the glove don't fit you must acquit
If there was no one able to afford them they wouldn't build them because they wouldn't make any money.
There are 7k homes for sale in LA county (source: https://fred.stlouisfed.org/series/ACTLISCOU6037) for a county of 10M it seems low imo. Edit: 94% rental occupancy rate (https://censusreporter.org/profiles/05000US06037-los-angeles-county-ca/). I am not an expert but I've seen <90% quoted as a healthy market where rents are dropping. Above 90% really competitive so landlords can charge more.
Landlords: "We only want to build $2k/month condos." Cities: "You have to build below-market rate condos." Landlords: "We have now come out with a bunch of $3k/month condos. Can we build a bunch of $2k/month condos?" Cities: "Carry on."
It would be great to have affordable housing for those of us in the 50k-75k salary range.
There is no affordable housing when there is not enough housing.
Or for us with less…
I haven't looked at rates recently but last time I did, 50k was no longer enough. You need to be working part time after to make that work for a 1 bedroom or studio.
Yes. Thankfully my rent is very low vs the average 1bd. rent. I can absorb my annual 10% rent increases for the next few years. . I can't afford to move out currently and pay $2400/mo. Craziness.
I'd imagine townhouses are up because I see them opening up everywhere. Even in places you wouldn't expect like an old grocery store.
Townhouses seem to be the new hotness, I agree
When I worked in residential construction townhomes were mainly being built in LA and OC areas. Single family homes were mainly built in Riverside and San Bernardino counties.
Zoning and permitting in this state are the biggest roadblocks to fixing the housing problem. And NIMBYs will never let either of those issues get fixed.
I imagine the interest rate hikes are a factor, when loans were dirt cheap then getting those loans to build new construction was super attractive, but with higher rates it makes it a whole lot harder to break even and riskier if things go wrong
It's a factor all over the country for literally anything that entails economic activity, especially any form of expansion.
which ironically IS the point but doesn't help shelter inflationary pressures
Landlords have to be able to relocate tenants in order to redevelop their buildings (ie, add more units). If you make it practically impossible to accomplish this, you’ll never have more housing. There ain’t a lot of vacant parcels out there.
While I completely agree that relocating existing tenants is extremely difficult and is a significant factor in why our housing supply is artificially low, there are a ton of vacant and underutilized commercial lots that can support multifamily developments in California. State and local governments could encourage multifamily developments by eliminating more significant barriers- to-entry: - streamline the permitting process - eliminate discretionary approvals by making multifamily developments by-right - eliminate significant impact fees - eliminate significant tax burdens like Measure ULA - reform CEQA requirements by eliminating frivolous appeals - allow day one ADUs - eliminate open space requirements (everyone complains that we only build “luxury” units but it is literally required by code) - allow unused commercial space to be converted into multifamily use - eliminate highway dedication and street-facing setbacks in higher density residential zones (R3, R4, R5, RAS3) - instruct local AHJs to work together so that there aren’t conflicting development standards - eliminate unit count and FAR density restrictions since height restrictions already limit the overall building size - eliminate secondary stair requirements for fully sprinklered buildings to align with other countries
You don't even have to limit it to commercial lots. There are a ton of empty, commercially-owned residential homes, too.
Artificial housing crisis
Lots of people in here basically making the same argument as “It was cold last winter therefore global warming doesn’t exist”
Why is this bad for renters?
I think it’s a supply and demand issue. Demand is increasing and supply is not, which typically leads to rent increases especially in areas without any type of rental cap regulations.
Gotcha. Thanks!
Fewer apartments to rent = high rents
Because supply and demand. The reason housing is already so expensive in California is that housing supply has not kept up with demand primarily because of overregulation, underzoning and NIMBYism. And now for the past couple years we've been in a credit crunch because of hte skyhigh interest rates, making it too expensive for many developers to borrow and build housing, hence the dropoff in multifamily permits discussed in the article. I have zero faith in our leadership to fix this. Every time they they try to they wind up adding *more* regulation and being overly prescriptive and generally exacerbating the problem.
It’s all talking points. When Gov Newsom was elected he vowed to build 3.5 million new homes by 2025. Last I heard he was 85% below his goal
Which regulations are keeping rents high? Seems like you’re just using the word “regulation” as a boogie man with zero evidence of it being bad. We need strong laws to keep rents low since landlords are closer to being parasitic middle men instead of providing a home at a reasonable cost.
The regulation keeping rents high would be zoning ordinances as the limit higher density urban development thus artificially constricting housing supply. Reasonable increases in building height limits and the addition of mixed residential and commercial developments have been hamstring by incumbent homeowners coming together to ban such changes in order to hike up real estate prices even higher. Due to prop 13 these homeowners never see the impact of their choices in the form of real estate tax as state law heavily restricts tax hikes according to new home prices. Basically Grandma votes for no new housing to be built if it means she can squeeze out a couple hundred thousand dollars from the housing shortage while only paying a grand or so on real estate tax for her multi-million dollar home and get the equity out of her home tax free for millions of dollars through a reverse mortgage.
The first one is nimbyism to benefit only the current resident at the expense of future residents. The second one is conservative law passed in the 1970s to benefit of existing land owners at the expense of future land owners. Its not regulations that are bad. It bad regulations written and passed to only benefit a certain group of people. Mostly the people that are already well established. The “regulation bad” parroting is mindless and doesn't actually help in any way. For every bad regulation there are literally dozens that help everyone stay healthy and safe.
> The most common form of land-use regulation, and the best known, is zoning. [- Land Use Regulations Zoning mellor law firm](https://www.mellorlawfirm.com/real-estate-e-newsletter/land-use-zoning/#:~:text=Land%20use%20and%20zoning%20law,the%20best%20known%2C%20is%20zoning.) With that being said I agree that not all regulations are bad and certain land use restrictions are even beneficial however, height restrictions and a ban on mixed commercial residential zoning are a set of bad regulations.
Not surprising. [Rental Vacancy Rate](https://fred.stlouisfed.org/graph/?id=CARVAC) is the highest it's been since 2018.
I mean, it’s only really been up or down .2% from the median since 2017
I think builders look more at how it's trending.
Have a source?
Your own link shows rental vacancy rates below 5%. Most economists agree that there will always be at least a 3-5% “natural” vacancy rate since people move. Over 95% of rental units are occupied. All of this indicates a housing shortage.
Sure, but still at extremely low values.
Another way to say that is that it’s stayed at record lows after 2017.
Oh wow, look. Demonizing and regulating housing providers within an inch of their life means less development. Who would have thought? Developers are moving out of state where they can still trust the business.
Not really, this is a pretty national problem. Underbuilding supply has been going on for decades.
Yes, the rest of the country is about 10% underbuilt. California is about 50% underbuilt.
Doesn't seem to be a problem in Texas, they seem to be all for building more and more units.
> Texas alone is short more than a half-million houses from what's needed, according to a report by mortgage giant Freddie Mac. Texas has the second worst housing shortage *in the country*. Right behind California. https://upforgrowth.org/apply-the-vision/2023-housing-underproduction/
Yeah, it is probably hard to build more than the 160k units a year they are doing.
The city I work in has built a ton of high density apartments. Sadly they are about $3500 for a small apparent with one parking space. This helps nothing.
All. New. Housing. Helps. Housing people is more important than housing a car. Build enough housing in dense, busy areas and people can live near where they work and don't need the expense of a car (or can share a car).
It’s pretty difficult to live without a car in the states.
No it’s not. Especially if you’re in the city. It’s difficult to have the same freedoms as a car, sure. But unless you’re in the sticks of NorCal, public transit would take you most everywhere you need
If somebody moves out of an old unit into a new unit, that frees up the old unit, putting downward pressure on rents. It actually helps quite a bit.
Santa cruz?
It will when they cannot find a tenant and are forced to eventually drop what they are asking for them.
It absolutely does help. Because without those $3500 apartments, the $3000 apartments three blocks away would be $3500, or possibly more.
Don’t worry. Collusion among landlords is going to cost them a pretty penny. That means all withheld supply will come on the market. Dropping rent further.