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About 5 years ago, I asked a politician about housing. The assemblyman told me that housing is largely controlled at the local level and driven by local city

About 5 years ago, I asked a politician about housing. The assemblyman told me that housing is largely controlled at the local level and driven by local city politics. He explained that voters tend to be home owners and property owners. The conundrum then is how to make housing affordable without impacting long term investment of majority of voters. A politician or city council which actually moved the needle on housing would be putting themselves at risk of losing many votes, and thus their political careers.

joe_the_user 7y ago
Housing currently controlled at the local level by default, resulting in all those problems. Efforts to move things to the State level in California are ongoing and have hit or miss. The problem is that since housing has been managed at the local level for so long, finding a coherent State level solution is hard and moreover, wealthy interests have influence at the state level also.
kaikai 7y ago
You're right; there's an ongoing recall process right now in the City Council, against people who voted for rent control measures.
- epistasis 7y ago
  Rent control won't help the striking grad students, though, since they are here for a short time. Rent control is for giving ownership-lite to people. The only thing that helps graduate students is in the short term a COLA so they can survive, and in the longer term far far more housing so that there is enough to go around. The prices are the symptom of the underlying problem. The price controlled stock in Santa Cruz is miniscule, and the lines so long that nobody who lives here less than a decade ever has a hope of getting a price-controlled unit. Unless we address the shortage, we will have one of high prices, long lines, or lotteries. None of these are acceptable solutions for students. (Or really anyone, for that matter. We have to stop trying to exclude people and finally welcome them.)
  - kaikai 7y ago
    That’s not true, and I can think of several examples where rent control would help grad students: Grad students often live in Santa Cruz long term. I know multiple people in Santa Cruz who went back to school for higher degrees, and kept their same housing. Even students who come from out of town still live there for the duration of their program, which can be 6 years. The rental market changes fast, and rent control for those 6 years would have an impact. Many grad students live with other students, so the same lease can carry over as long as a leaseholder stays. I lived in one house that had kept the same lease going for over 15 years. That might get harder with rent control in place, but our rent was still comparatively cheap because we’d been there for so long. Regardless of whether it helps grad students survive, it helps the people who live in Santa Cruz long term. I eventually left because I couldn’t afford to live and work there, and might not have had to make that choice if rent prices hadn’t gone through the roof.
    - epistasis 7y ago
      I'm all for rent control, but we need to be realistic about what it solves, which is not much at all for grad students. Already, even market rate housing has massive lines. Trying to grab anything off of Craig's List is nearly futile, as any new postings will overflow the lister's voicemail box. Life in Santa Cruz is not like it was 10 years ago, it's far far more difficult to find housing, even with plentiful money. Rent control, while a good thing that should define its be done, is not a solution to the problems of newcomers, and is not meant to help newcomers. It's meant to let people hold on, not fix the systemic problems with housing austerity.
    - kelnos 7y ago
      Rent control is a short-term band-aid, and yet people seem to put it in place as a long-term solution. It's not. The long-term solution is to build more. Rent control just distorts the market, makes it hard for people to move if they want to, and makes non-rent-controlled units more expensive. Rent control can help stop the bleeding while building catches up with demand, but it's ultimately a negative over the long term.
davidw 7y ago
> housing affordable without impacting long term investment Housing cannot both be 'affordable' and a 'good investment' - prices grow faster than inflation.
- legolas2412 7y ago
  They can be. If the price only grows at inflation and the rent provides the actual return. Housing cannot provide return only at inflation, that would mean nobody would want to invest in real estate.
  - davidw 7y ago
    Fair point, but that's a different model than "buy a house and watch its value skyrocket". It's more akin to what you'd find in a place like Germany, where you buy a second housing unit, rent it out, and it pays for itself over time and you can sell it off, even if it may not have appreciated in value a bunch.
  - eli_gottlieb 7y ago
    >Housing cannot provide return only at inflation, that would mean nobody would want to invest in real estate. Well sure, but that's sort of the point. Housing is, ultimately, a durable good. It's more like a car or a refrigerator than like a stock. It has use-value, but its only capital appreciation comes from charging ground-rent on access to nearby economic activity in which the housing itself doesn't participate.
  - nostrebored 7y ago
    Housing should not be a speculative investment on average. Houses are a durable consumer good.
    - JMTQp8lwXL 7y ago
      Calling houses a durable consumer good is too one-dimensional. If I have a laundromat with 20 washing machines, that's far more useful located in NYC than in the middle of Kansas since there's far more people around to utilize the machines. A huge part of the context of a house (and its value) is what it's located around.
eli_gottlieb 7y ago
> The conundrum then is how to make housing affordable without impacting long term investment of majority of voters. Speaking as a condo owner in a tech-heavy metro area: fuck my investment! My friends and family deserve to be able to afford to live places more than I deserve to make passive investment income from my own bedroom.
dntbnmpls 7y ago
This is the problem. Homes shouldn't be an investment. It should be a depreciating asset like cars at worst and a human right at best. Especially in a country as large as the US with so much resources, we shouldn't have turned homes into an investmens. Productive assets like companies should be investments. But at this point, we are trapped. The largest retirement asset for most people are their homes. It's political suicide to do anything that would hurt the valuations of homes. If you are an older individual with your home making up a bulk of your retirement nest egg, you aren't going to vote for policies that make homes more affordable. And older folks vote more often and in larger numbers than younger voters.
- zachthewf 7y ago
  I completely agree. It's not just retirement-age people either. I've noticed many Bay Area peers in their ~early 30s buy their first home and (understandably) swap camps from "very concerned about housing prices" to "happily watching their massive investment grow." Is there any realistic path (even a very optimistic one) towards the Japanese model of house-as-depreciating-asset in the US?
  - magicsmoke 7y ago
    Japan tears down their houses because they're worried about older houses being unsafe due to earthquake damage. So I guess the most realistic path would be for the big one to hit California and destroy all the housing stock.
    - smsm42 7y ago
      Realistic plan for what?
    - fiblye 7y ago
      Also because they get moldy and stink from the humidity, and because many people believe they have ghosts. The absolute quickest way to kill home value in Japan is have someone die in it. Absolutely nobody will want to live in the place and property owners will warn you before you consider looking at it. If old people in the US saw their homes as a time-limited investment where they needed to sell them while they still can in order to ensure their spouse/kids have money, prices might drop. Maybe bringing back superstitions is a way millennials can finally take back the housing market.
mnm1 7y ago
Preempt stupid locals and their dumb laws at the state level. The local politicians can say they did everything they could to stop it, housing gets built, and prices start to come down. This problem is not unique to the area. Idiotic nimbys need to be stopped but it's impossible if the fights have to happen at a local level, one municipality at a time. The interests of a few rich assholes shouldn't trample the interests of the entire area, its infrastructure, and housing supply.
istillwritecode 7y ago
Under SB50, people could convert their single family home to a four-unit condo complex. The value of such a structure is likely to be twice as much as a single family home (4 units at half the price of the original house). People don't oppose the growth to preserve their wealth - they oppose it to preserve their lifestyle.
foogazi 7y ago
> The conundrum then is how to make housing affordable without impacting long term investment of majority of voters. You can’t have both in the same place.

joe_the_user 7y ago

Housing currently controlled at the local level by default, resulting in all those problems. Efforts to move things to the State level in California are ongoing and have hit or miss. The problem is that since housing has been managed at the local level for so long, finding a coherent State level solution is hard and moreover, wealthy interests have influence at the state level also.

kaikai 7y ago

You're right; there's an ongoing recall process right now in the City Council, against people who voted for rent control measures.

epistasis 7y ago
Rent control won't help the striking grad students, though, since they are here for a short time. Rent control is for giving ownership-lite to people. The only thing that helps graduate students is in the short term a COLA so they can survive, and in the longer term far far more housing so that there is enough to go around. The prices are the symptom of the underlying problem. The price controlled stock in Santa Cruz is miniscule, and the lines so long that nobody who lives here less than a decade ever has a hope of getting a price-controlled unit. Unless we address the shortage, we will have one of high prices, long lines, or lotteries. None of these are acceptable solutions for students. (Or really anyone, for that matter. We have to stop trying to exclude people and finally welcome them.)
- kaikai 7y ago
  That’s not true, and I can think of several examples where rent control would help grad students: Grad students often live in Santa Cruz long term. I know multiple people in Santa Cruz who went back to school for higher degrees, and kept their same housing. Even students who come from out of town still live there for the duration of their program, which can be 6 years. The rental market changes fast, and rent control for those 6 years would have an impact. Many grad students live with other students, so the same lease can carry over as long as a leaseholder stays. I lived in one house that had kept the same lease going for over 15 years. That might get harder with rent control in place, but our rent was still comparatively cheap because we’d been there for so long. Regardless of whether it helps grad students survive, it helps the people who live in Santa Cruz long term. I eventually left because I couldn’t afford to live and work there, and might not have had to make that choice if rent prices hadn’t gone through the roof.
  - epistasis 7y ago
    I'm all for rent control, but we need to be realistic about what it solves, which is not much at all for grad students. Already, even market rate housing has massive lines. Trying to grab anything off of Craig's List is nearly futile, as any new postings will overflow the lister's voicemail box. Life in Santa Cruz is not like it was 10 years ago, it's far far more difficult to find housing, even with plentiful money. Rent control, while a good thing that should define its be done, is not a solution to the problems of newcomers, and is not meant to help newcomers. It's meant to let people hold on, not fix the systemic problems with housing austerity.
  - kelnos 7y ago
    Rent control is a short-term band-aid, and yet people seem to put it in place as a long-term solution. It's not. The long-term solution is to build more. Rent control just distorts the market, makes it hard for people to move if they want to, and makes non-rent-controlled units more expensive. Rent control can help stop the bleeding while building catches up with demand, but it's ultimately a negative over the long term.

davidw 7y ago

> housing affordable without impacting long term investment Housing cannot both be 'affordable' and a 'good investment' - prices grow faster than inflation.

legolas2412 7y ago
They can be. If the price only grows at inflation and the rent provides the actual return. Housing cannot provide return only at inflation, that would mean nobody would want to invest in real estate.
- davidw 7y ago
  Fair point, but that's a different model than "buy a house and watch its value skyrocket". It's more akin to what you'd find in a place like Germany, where you buy a second housing unit, rent it out, and it pays for itself over time and you can sell it off, even if it may not have appreciated in value a bunch.
- eli_gottlieb 7y ago
  >Housing cannot provide return only at inflation, that would mean nobody would want to invest in real estate. Well sure, but that's sort of the point. Housing is, ultimately, a durable good. It's more like a car or a refrigerator than like a stock. It has use-value, but its only capital appreciation comes from charging ground-rent on access to nearby economic activity in which the housing itself doesn't participate.
- nostrebored 7y ago
  Housing should not be a speculative investment on average. Houses are a durable consumer good.
  - JMTQp8lwXL 7y ago
    Calling houses a durable consumer good is too one-dimensional. If I have a laundromat with 20 washing machines, that's far more useful located in NYC than in the middle of Kansas since there's far more people around to utilize the machines. A huge part of the context of a house (and its value) is what it's located around.

eli_gottlieb 7y ago

> The conundrum then is how to make housing affordable without impacting long term investment of majority of voters. Speaking as a condo owner in a tech-heavy metro area: fuck my investment! My friends and family deserve to be able to afford to live places more than I deserve to make passive investment income from my own bedroom.

dntbnmpls 7y ago

This is the problem. Homes shouldn't be an investment. It should be a depreciating asset like cars at worst and a human right at best. Especially in a country as large as the US with so much resources, we shouldn't have turned homes into an investmens. Productive assets like companies should be investments. But at this point, we are trapped. The largest retirement asset for most people are their homes. It's political suicide to do anything that would hurt the valuations of homes. If you are an older individual with your home making up a bulk of your retirement nest egg, you aren't going to vote for policies that make homes more affordable. And older folks vote more often and in larger numbers than younger voters.

zachthewf 7y ago
I completely agree. It's not just retirement-age people either. I've noticed many Bay Area peers in their ~early 30s buy their first home and (understandably) swap camps from "very concerned about housing prices" to "happily watching their massive investment grow." Is there any realistic path (even a very optimistic one) towards the Japanese model of house-as-depreciating-asset in the US?
- magicsmoke 7y ago
  Japan tears down their houses because they're worried about older houses being unsafe due to earthquake damage. So I guess the most realistic path would be for the big one to hit California and destroy all the housing stock.
  - smsm42 7y ago
    Realistic plan for what?
  - fiblye 7y ago
    Also because they get moldy and stink from the humidity, and because many people believe they have ghosts. The absolute quickest way to kill home value in Japan is have someone die in it. Absolutely nobody will want to live in the place and property owners will warn you before you consider looking at it. If old people in the US saw their homes as a time-limited investment where they needed to sell them while they still can in order to ensure their spouse/kids have money, prices might drop. Maybe bringing back superstitions is a way millennials can finally take back the housing market.

mnm1 7y ago

Preempt stupid locals and their dumb laws at the state level. The local politicians can say they did everything they could to stop it, housing gets built, and prices start to come down. This problem is not unique to the area. Idiotic nimbys need to be stopped but it's impossible if the fights have to happen at a local level, one municipality at a time. The interests of a few rich assholes shouldn't trample the interests of the entire area, its infrastructure, and housing supply.

istillwritecode 7y ago

Under SB50, people could convert their single family home to a four-unit condo complex. The value of such a structure is likely to be twice as much as a single family home (4 units at half the price of the original house). People don't oppose the growth to preserve their wealth - they oppose it to preserve their lifestyle.

foogazi 7y ago

> The conundrum then is how to make housing affordable without impacting long term investment of majority of voters. You can’t have both in the same place.