California Housing
From the SF Chronicle this morning:
In the past five years, the median price for a single-family home in California has more than doubled, rising from $185,000 to $405,000, according to real estate information firm DataQuick. Prices in the Bay Area have jumped about 78 percent in the same period -- from $306,000 to $544,000 -- making it one of the most expensive places to live in the country.
In the past five years, the median price for a single-family home in California has more than doubled, rising from $185,000 to $405,000, according to real estate information firm DataQuick. Prices in the Bay Area have jumped about 78 percent in the same period -- from $306,000 to $544,000 -- making it one of the most expensive places to live in the country.
It's a pretty ugly situation. The article offered two suggestions for mitigating this problem -- changing the property tax distribution so that cities aren't so reliant on sales tax revenues, and lessening the environmental and premitting/zoning restrictions to allow housing to be built more easily. I wonder how effective either of these tactics would be though. And what do you do in areas that are pretty much built out with low density housing, like the San Jose/Silicon Valley area?
Marginal Revolution had an interesting post that I think is somewhat related to this. He is discussing the growth of wealth and its effects on poverty, and he wonders:
I wonder whether increasing wealth will ever eliminate the case (sound or not) for, say, welfare payments or the public funding of education. Won't the U.S. at some point, however near or distant, become rich enough so that government won't have to...fill in the rest of the sentence yourself...? Or does growing wealth jack up land prices so much that subsistence becomes increasingly harder to achieve? I'm not talking about a relative status effect here, or changing expectations as to what is a decent life (though those factors play a role too). To some extent higher real wages also boost the cost of producing human beings (i.e., raising children), analogous to William Baumol's "cost disease." You can raise a family of seven in Mexico on one thousand dollars a year, just try that in Fairfax County. And might further economic growth only exacerbate this contrast?
It seems like that might be what we are seeing here - I wonder if it is really possible to build enough housing (and at low enough prices) so that the 86% of renters surveyed in the article who would like to buy housing could actually do so. Even if the restrictions on building were entirely lifted, could enough houses be built near enough to employment centers that people could own a home and still be somewhat near their job?
As Will Rogers once said... ""Buy land. They ain't making any more of the stuff."
And in searching for this quote, I found another good Will Rogers quote that I hadn't seen before - "The difference between death and taxes is death doesn't get worse every time Congress meets." (From Zaadz)
I love the internet.
In the past five years, the median price for a single-family home in California has more than doubled, rising from $185,000 to $405,000, according to real estate information firm DataQuick. Prices in the Bay Area have jumped about 78 percent in the same period -- from $306,000 to $544,000 -- making it one of the most expensive places to live in the country.
In the past five years, the median price for a single-family home in California has more than doubled, rising from $185,000 to $405,000, according to real estate information firm DataQuick. Prices in the Bay Area have jumped about 78 percent in the same period -- from $306,000 to $544,000 -- making it one of the most expensive places to live in the country.
It's a pretty ugly situation. The article offered two suggestions for mitigating this problem -- changing the property tax distribution so that cities aren't so reliant on sales tax revenues, and lessening the environmental and premitting/zoning restrictions to allow housing to be built more easily. I wonder how effective either of these tactics would be though. And what do you do in areas that are pretty much built out with low density housing, like the San Jose/Silicon Valley area?
Marginal Revolution had an interesting post that I think is somewhat related to this. He is discussing the growth of wealth and its effects on poverty, and he wonders:
I wonder whether increasing wealth will ever eliminate the case (sound or not) for, say, welfare payments or the public funding of education. Won't the U.S. at some point, however near or distant, become rich enough so that government won't have to...fill in the rest of the sentence yourself...? Or does growing wealth jack up land prices so much that subsistence becomes increasingly harder to achieve? I'm not talking about a relative status effect here, or changing expectations as to what is a decent life (though those factors play a role too). To some extent higher real wages also boost the cost of producing human beings (i.e., raising children), analogous to William Baumol's "cost disease." You can raise a family of seven in Mexico on one thousand dollars a year, just try that in Fairfax County. And might further economic growth only exacerbate this contrast?
It seems like that might be what we are seeing here - I wonder if it is really possible to build enough housing (and at low enough prices) so that the 86% of renters surveyed in the article who would like to buy housing could actually do so. Even if the restrictions on building were entirely lifted, could enough houses be built near enough to employment centers that people could own a home and still be somewhat near their job?
As Will Rogers once said... ""Buy land. They ain't making any more of the stuff."
And in searching for this quote, I found another good Will Rogers quote that I hadn't seen before - "The difference between death and taxes is death doesn't get worse every time Congress meets." (From Zaadz)
I love the internet.
posted by Amber at
9:00 AM
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