If a municipality truly lost zoning authority, anyone could build anything anywhere they wanted. That isn't the case. One very specific way of bypassing usual zoning codes in certain circumstances is a very different thing, and that specific way has a common name that's broader than just California, even.
> Now the wealthiest community in the United States has the unique distinction of also being the first community in the Bay Area to have a Builder’s Remedy project proposed. A young homeowner and computer engineer, frustrated that the town has been slow to permit the reconstruction of his water-damaged home, has announced plans to use the zoning holiday to build a 15-unit apartment complex and five townhomes on his property. Per the rules, four of those homes will house Los Altos Hills’ first low-income families.
...
> Local media speculates that this project may be out of spite by the young engineer regarding the NIMBY government of his town. Maybe, but it’s good nevertheless. Undoubtedly, this project will be sued by neighbors, but the courts have mostly ruled in favor of the Builder’s Remedy and other state housing laws so far.
One under-appreciated topic is the extent to which we dis-incent people to sell their homes as they age. Through prop 13 (in California), and a stepped-up cost basis at death (in the US) - we give people very strong financial incentives to continue ownership.
As a result you have (forgive me) old people who either remain in their homes or rent them out instead of selling them, long after they otherwise would.
I think this is still not as big a factor as the simple lack of building - but it sure doesn't help.
This will be exacerbated by the low mortgage rates which most homeowners are locked in for the next 20+ years. There should be a way to negotiate with the lender holding my mortgage to let me move it to another house for some increase in basis points which would result in a win-win for both sides.
However I'm not sure about your proposed solution. You'd have to give up a fair bit of the difference in interest rate to incent the banks to agree to this. There would likely be a selection bias that most of the people who would take advantage of it were going to sell anyway, and now the bank is stuck carrying a sub-market-rate loan they otherwise would have gotten out of.
I think there is a way to do this? I'm not sure what it is called or how common it is, but we've been house hunting and one of the local Agent's brought it up.
Prop 13 has distorted the market of residential, but, at this point, it's baked in. Individual residential housing will turn over--the owner will eventually die.
Where Prop 13 has been terrible is on commercial real estate. Most office complexes in Silicon Valley have dozens of sublease layers in order to avoid triggering a reassessment. Forcing those to unwind would be a gigantic boon.
Unfortunately, those people have a LOT of money to throw around. The last time this popped up on a proposition, the commercial real estate owners spent a FORTUNE to defeat it.
Yes, I can’t say this enough but a really great way to preserve wealth in CA is to (1) buy an expensive home with a low interest 30 year fixed loan, (2) live in said home as long as possible so you can pay roughly the same tax you did when you purchased the home. After 10 years in the home there’s only downsides to moving.
I actually rented in SF from somebody whose grandparents bought the home I rented. The value of the 1800 sq/ft rental home was around $1.8m, but the landlord was paying property tax on the value of the home from when his grandparents bought the property in the 70’s. The tax bill should have been about $20k/year, but it was only a few thousand because the tax rate was locked into the value of the home in the 70’s. Meanwhile a neighbor bought a $3m home next door and was paying $35k in property tax. For me it meant I got a slight discount on rent.
Agreed but property tax should not be based on the current value of the home.
Property prices are insane.
It's both unfair that the guy in the expensive home pays a huge amount in taxes as it is also unfair that the other guys property taxes are locked in to when property prices were less insane.
Why not let developers build all the luxury housing they want? Affordable housing is often luxury housing built 30 years ago. It's very difficult to solve affordability today but much easier to solve it in the future. Let time do the work.
Presumably because the housing crisis is here today, not 30 years from now.
> It's very difficult to solve affordability today but much easier to solve it in the future.
I'm not sure what the reasoning behind this is. I see no reason that affordable housing should magically solve itself. The only possible explanation that comes to mind is if you think population will collapse, but the population of the US is projected to continue growing apace for the next 40 years: https://www.census.gov/data-tools/demo/idb/#/country?COUNTRY...
Yes, affordable housing today often luxury housing from the past. That works well enough for areas dealing with slow growth. In Dallas, for example, the apartment I rented in 1996 was top of the line, and is now mid-range.
When a government interrupts that process for years on end by disallowing any new construction, you end up with a backlog, and can't afford to wait the decades it would take for affordable housing to be available.
In the future, given sane zoning, the process will work. For now, though, there's a dire need to fill in the gap with affordable housing today.
It is sound economics. Housing is fungible -- poor people would gladly occupy luxury housing if the price is right, and rich people can and do pay luxury prices for dumps when the alternative is sleeping on the streets.
Therefore the primary thing that matters is how many units are built. If there are N people and N-1 housing units, then if you build super cheap housing the poorest guy can move off the streets into it. But if you build a luxury unit, the richest guy moves out of his unit into the new one, which opens up rich guy's place for a not-quite-as-rich person, etc.
It doesn't take 30 years for new housing to have an impact. New homes immediately affect the price+availability of existing homes, because when someone moves into a shiny new home they free up the place where they were living before.
I think this is a bad argument for an essentially correct position, an unintentional strawman, presented in good faith.
The price of housing is not dependent on how nice the housing is in aggregate, only how much of it there is. The argument for building "affordable" housing comes from landlords who own luxury housing not wanting the new housing to hurt their investments.
> Why not let developers build all the luxury housing they want? Affordable housing is often luxury housing built 30 years ago.
Because the requirements on the local governments that the builder’s remedy deals are failures to provide affordable housing on a much shorter timescale than 30 years from now.
Let’s hope that we start to see some more dense building occur. I get not wanting a skyscraper next to your ranch-style home, but the housing affordability crisis needs to end. If not for the good of our fellow citizens, at the very least so people can have more money in their pockets to stimulate the economy more so than just by paying their rent.
You're probably referring to the California Environmental Quality Act. It is very unclear how these two things intersect. My guess is some court will decide sometime in the future. By default, as far as I know, CEQA still applies.
> The five findings which would allow denial of an eligible project can be summarized as follows:
> <snip>
> 4. The project is proposed on land zoned for agriculture or resource preservation that is surrounded on at least two sides by land being used for agriculture or resource preservation or there are not adequate water or sewage facilities to the serve the project.
but I am not an expert on these details whatsoever.
> You're probably referring to the California Environmental Quality Act. It is very unclear how these two things intersect. My guess is some court will decide sometime in the future.
A trial court already has already ruled that it does and that environmental review has to be completed before a project enters the Buklder’s Remedy process.
Build housing with 20% low-income set asides or take your chances with environmental review. I think the intention is you can't shortcut all the bureaucratic bullshit with this neat trick.
I see this in Seattle and it makes no sense and just annoys the shit of me when I'm looking for housing. They'll list their income restricted units as their entry level price online, then you look at their actual listings and they're all $1000 more expensive per month. The real problem that makes no sense, however, is that these income restricted units are sometimes like $2000-2500 a month. And to qualify you have to make less than like 60k a year or something. They can't afford to the rent. I don't get it.
> What's the difference between "environmentally sound" and the onerous environmental review that Bay Area construction projects had to go through?
Its all (with narrow exemptions) California construction projects, not most Bay Area prohects, and there is no difference; this sentence is referring to the fact that Builder’s Remedy projects are not exempt from CEQA.
There is no inspector level override to allow projects.
CEQA overrides all this. Here's a person that spent five years in courts, because a neighbor didn't want a single family home to expand due to aesthetic concerns, that suddenly shifted to fake "environmental" concerns as soon as the city level obstruction failed.
The threat of years of lawsuit is enough to kill most projects, as that amount of uncertainty and risk will eliminate all financial backing for any but the very most motivated, such as those living in their own homes with tons of money to burn.
Discretionary approval of projects is definitely a corruption machine, as exposed recently in LA, and any politician that endorsed discretionary community review is almost certainly corrupt. However it's also the norm in California.
Even with that discretionary review, CEQA is still a powerful tool for stopping projects that improve the environment, due to the long decision timelines.
Especially since "low income" is defined relative to area income. One of the first builder's remedy projects is announced in Los Altos Hills, where median family income is $250K a year. "Low income housing" means it has to be affordable to somebody making 80% of that, i.e. $200K a year.
"Los Altos Hills, California is one of the wealthiest communities in the world, home to Silicon Valley’s upper echelons of technology billionaires and millionaires such as the founder of Google and its current CEO. The non-diverse town boasts a median household income north of $400,000. Its zoning prohibits multifamily housing, whether apartments, townhomes or condos, along with commercial stores and shops in the entirety of its city limits."
This kind of hypocrisy where CEOs look down from the stratosphere on the common rabble yet have their corporations espouse a kind of elitist morality about diversity, equity, and inclusion is dumbfounding and disgusting.
> This kind of hypocrisy where CEOs look down from the stratosphere on the common rabble yet have their corporations espouse a kind of elitist morality about diversity, equity, and inclusion is dumbfounding and disgusting.
You're really missing the forest for the trees. Which is OK, because a lot of people are. On every side of this issue.
It's not hypocrisy, its just business. They don't give a shit because they see where society is going, and they want to make sure they remain as profitable as possible.
This is also why all the fighting and gnashing of teeth is pointless. CEOs aren't pushing the agenda. They're just following profits, like they always have. If you don't like that, well, welcome to the club, lots of us have been here for a very long time.
The problem with prepackaged political beliefs is that it leads to dissonance where ones view on society is at odds with "the free hand of the market", but capitalism does no wrong, so it has to be a conspiracy of CEOs and their personal politics.
"Its zoning prohibits multifamily housing, whether apartments, townhomes or condos, along with commercial stores and shops in the entirety of its city limits.""
Many, many middle class communities all over the United States have similar restrictions. This is what single family zoning looks like and it's not a function of these particular residents being billionaires.
Further, living in a prototypical single family zoned "nice neighborhood" is an aspirational goal for quite a bit of the lower middle or lower working class in the United States - including the racial and class cohorts in whose name much of this housing deregulation is being done.
Perhaps they all need to be educated in the errors of their thinking ?
I doubt this applies to cities that adopted their housing elements by the Jan 31 deadline and submitted them as revisions that are still pending review by the HCD.
I'm sure some of those will still eventually be judged out of compliance and builder's remedy may stand, but for now they're just pending review.
The cities that are likely to actually be subjected to builder's remedy (which will be challenged in court, which might cause delays for any developers trying to use it, but is still a useful bargaining chip) are those marked as "NEW CYCLE". Those cities did not prepare any housing permitting plan submission to the HCD at all by the deadline.
Yes the question is not whether the plans were deemed to be compliant, it is whether the plans were in fact compliant. The only clear-cut cases are where cities failed to even adopt a plan. Less clear are those cities that are vocally subverting state law. Even less clear are those cities with adopted plans that are marginally compliant, like Berkeley, which helps explain why Berkeley has so far not attracted any "builder's remedy" plans.
Yes but I think that's incorrect. I see no evidence of those recent HEs getting rejected. All the article is going on is a flag in the HCD database, not actual official communications with the cities. The cities I'm familiar with have received no such letters (yet).
Readit News
(And not to toot my own horn but that title does a much better job of explaining what's going on)
...
> Local media speculates that this project may be out of spite by the young engineer regarding the NIMBY government of his town. Maybe, but it’s good nevertheless. Undoubtedly, this project will be sued by neighbors, but the courts have mostly ruled in favor of the Builder’s Remedy and other state housing laws so far.
More details about that part here: https://www.siliconvalley.com/2023/02/13/homeowner-invokes-b...
Zbrozek previously made the news with Los Altos Hills Community Fiber, after fighting a $210,000 Comcast quote for fiber internet service: https://arstechnica.com/tech-policy/2022/10/comcast-wanted-2...
As a result you have (forgive me) old people who either remain in their homes or rent them out instead of selling them, long after they otherwise would.
I think this is still not as big a factor as the simple lack of building - but it sure doesn't help.
However I'm not sure about your proposed solution. You'd have to give up a fair bit of the difference in interest rate to incent the banks to agree to this. There would likely be a selection bias that most of the people who would take advantage of it were going to sell anyway, and now the bank is stuck carrying a sub-market-rate loan they otherwise would have gotten out of.
Where Prop 13 has been terrible is on commercial real estate. Most office complexes in Silicon Valley have dozens of sublease layers in order to avoid triggering a reassessment. Forcing those to unwind would be a gigantic boon.
Unfortunately, those people have a LOT of money to throw around. The last time this popped up on a proposition, the commercial real estate owners spent a FORTUNE to defeat it.
I actually rented in SF from somebody whose grandparents bought the home I rented. The value of the 1800 sq/ft rental home was around $1.8m, but the landlord was paying property tax on the value of the home from when his grandparents bought the property in the 70’s. The tax bill should have been about $20k/year, but it was only a few thousand because the tax rate was locked into the value of the home in the 70’s. Meanwhile a neighbor bought a $3m home next door and was paying $35k in property tax. For me it meant I got a slight discount on rent.
The whole thing is absurd.
Property prices are insane.
It's both unfair that the guy in the expensive home pays a huge amount in taxes as it is also unfair that the other guys property taxes are locked in to when property prices were less insane.
> It's very difficult to solve affordability today but much easier to solve it in the future.
I'm not sure what the reasoning behind this is. I see no reason that affordable housing should magically solve itself. The only possible explanation that comes to mind is if you think population will collapse, but the population of the US is projected to continue growing apace for the next 40 years: https://www.census.gov/data-tools/demo/idb/#/country?COUNTRY...
When a government interrupts that process for years on end by disallowing any new construction, you end up with a backlog, and can't afford to wait the decades it would take for affordable housing to be available.
In the future, given sane zoning, the process will work. For now, though, there's a dire need to fill in the gap with affordable housing today.
Why can't the millions of homes that exist today be the mid-range to affordable and just flood the market with market rate homes/
Therefore the primary thing that matters is how many units are built. If there are N people and N-1 housing units, then if you build super cheap housing the poorest guy can move off the streets into it. But if you build a luxury unit, the richest guy moves out of his unit into the new one, which opens up rich guy's place for a not-quite-as-rich person, etc.
The price of housing is not dependent on how nice the housing is in aggregate, only how much of it there is. The argument for building "affordable" housing comes from landlords who own luxury housing not wanting the new housing to hurt their investments.
As the city metropolitan area expands, neighborhoods that used to be marginal, are now tony.
Brooklyn is turning into quite the yuppie stronghold. It used to be known as a fairly scrappy, affordable area.
Because the requirements on the local governments that the builder’s remedy deals are failures to provide affordable housing on a much shorter timescale than 30 years from now.
> ... As long as developments are 20% low-income or 100% middle-income and are environmentally sound ...
What's the difference between "environmentally sound" and the onerous environmental review that Bay Area construction projects had to go through?
My understanding of the wording there comes from https://abag.ca.gov/sites/default/files/documents/2022-10/Bu...
which says
> The five findings which would allow denial of an eligible project can be summarized as follows:
> <snip>
> 4. The project is proposed on land zoned for agriculture or resource preservation that is surrounded on at least two sides by land being used for agriculture or resource preservation or there are not adequate water or sewage facilities to the serve the project.
but I am not an expert on these details whatsoever.
A trial court already has already ruled that it does and that environmental review has to be completed before a project enters the Buklder’s Remedy process.
Appeals and further legislation are likely.
Its all (with narrow exemptions) California construction projects, not most Bay Area prohects, and there is no difference; this sentence is referring to the fact that Builder’s Remedy projects are not exempt from CEQA.
CEQA overrides all this. Here's a person that spent five years in courts, because a neighbor didn't want a single family home to expand due to aesthetic concerns, that suddenly shifted to fake "environmental" concerns as soon as the city level obstruction failed.
https://twitter.com/tribtowerviews/status/162851785910113075...
The threat of years of lawsuit is enough to kill most projects, as that amount of uncertainty and risk will eliminate all financial backing for any but the very most motivated, such as those living in their own homes with tons of money to burn.
Discretionary approval of projects is definitely a corruption machine, as exposed recently in LA, and any politician that endorsed discretionary community review is almost certainly corrupt. However it's also the norm in California.
Even with that discretionary review, CEQA is still a powerful tool for stopping projects that improve the environment, due to the long decision timelines.
This kind of hypocrisy where CEOs look down from the stratosphere on the common rabble yet have their corporations espouse a kind of elitist morality about diversity, equity, and inclusion is dumbfounding and disgusting.
https://about.google/belonging/
You're really missing the forest for the trees. Which is OK, because a lot of people are. On every side of this issue.
It's not hypocrisy, its just business. They don't give a shit because they see where society is going, and they want to make sure they remain as profitable as possible.
This is also why all the fighting and gnashing of teeth is pointless. CEOs aren't pushing the agenda. They're just following profits, like they always have. If you don't like that, well, welcome to the club, lots of us have been here for a very long time.
The problem with prepackaged political beliefs is that it leads to dissonance where ones view on society is at odds with "the free hand of the market", but capitalism does no wrong, so it has to be a conspiracy of CEOs and their personal politics.
Many, many middle class communities all over the United States have similar restrictions. This is what single family zoning looks like and it's not a function of these particular residents being billionaires.
Further, living in a prototypical single family zoned "nice neighborhood" is an aspirational goal for quite a bit of the lower middle or lower working class in the United States - including the racial and class cohorts in whose name much of this housing deregulation is being done.
Perhaps they all need to be educated in the errors of their thinking ?
I'm sure some of those will still eventually be judged out of compliance and builder's remedy may stand, but for now they're just pending review.
The cities that are likely to actually be subjected to builder's remedy (which will be challenged in court, which might cause delays for any developers trying to use it, but is still a useful bargaining chip) are those marked as "NEW CYCLE". Those cities did not prepare any housing permitting plan submission to the HCD at all by the deadline.
| 96 of 101 Bay Area municipalities had their housing elements rejected
Then TFA discusses one in particular at some length that did get their HE in by the deadline and had it rejected.