cahwyguy | Entries tagged with housing

Many people complain about the high cost of housing, especially here in Southern California. There was a very interesting opinion piece on the subject over the weekend here in LA. The article starts as follows:

Out of curiosity, I looked up the value of a two-story tract house I bought in a middle-class San Jose neighborhood back in 1983, for about $130,000. The home — which I sold for about $140,000 in 1985 — would now haul in an estimated $1 million or more, based on recent sales in the same neighborhood. That’s roughly eight times more than I paid for it. But in the 34 years since then, California’s median household income has increased by roughly three times, not eight.

Now, for those of us who have purchased more recently — say in the mid-2000s — there’s not as much of an increase. Houses in the San Fernando Valley, where I live, were on the order of $600-$800K back at the top of the market (if not higher). They dropped some, but have come back to those prices. Orange County? As the OC Register notes, new homes in the Pacifica San Juan neighborhood of San Juan Capistrano “includes two-story townhomes ranging from from 1,836 to 2,068 square feet in space; three or four bedrooms; three bathrooms and two-car garages. Prices start “from the low $700,000s.”” Mind you, these are townhomes, not even detached housing. How can Millennials purchase housing?

Not having been a renter, I can’t speak to how the rents have changed. But my sister-in-law recently started a discussion on this based on that Register article where she noted salaries are up (for some) on the order of 6%. Comments on her post (which was restricted to friends, which is why I’m not citing names or linking to the post) noted that “you can’t even rent very well for $60k a year. That’s about $1600 a month. Barely a two bedroom apartment in a nice area…” Another person commented “As a renter in CA my ass feels sore and raw. Rents for higher and higher and we where told it’s based on the housing prices in the area. The housing market crashed and rents didn’t come down and we where told it was because more people had to rent because they lost their homes. ” My daughter, however, rents, and she could tell you how expensive it is to rent in places like Los Angeles (she ended up having a roommate in the West Adams area) or up in Berkeley — especially compared to what she can rent in Madison WI.

Why is this happening?

The article explains it as follows:

How to fix all this can’t be covered in one little corner of the newspaper. The short answer, though, is to build more housing. But bureaucracy, land scarcity and construction costs, limited funding for affordable housing and well-intended environmental restrictions all stand in the way of new projects. And so do people up and down the state who are OK with new housing unless it happens to be in their neighborhood.

So let’s explore that last sentence a bit: “And so do people up and down the state who are OK with new housing unless it happens to be in their neighborhood.”

Building new housing (let’s assume non-rental, stand-alone, single family residences) increases the housing stock, and has a little dilution effect on overall housing prices. Large developments have a greater effect, but as we saw in places like Porter Ranch that have added loads of single-family houses, the demand is such that prices don’t drop all that much. Maybe we’ll see a big drop with the new Newhall Ranch development. Building multi-family developments — think condo developments with higher density — creates even more affordable homes, but still there isn’t a significant drop in housing.

Rentals can make housing more affordable, especially if you dump a lot of rentals in the rental market. This, after all, is how New York City (especially Manhattan) works: almost everyone there is a long term rentals with large housing corporations (the only one that can afford the buildings) taking the rental income and making the rich even richer. There is extremely high density and low car ownership, owing to the density of transit. Los Angeles doesn’t have that transit density, but that doesn’t stop builders from trying to increase density. It is unclear whether that will work, especially with parking and transportation issues. Most likely, people will end up paying one way or the other.

So what is doing us in with respect to housing. My supposition? Human nature. To put it another way: People are not willing to take a loss in value for their house even if it makes other houses in your neighborhood more affordable. People are not willing to have more housing constructed in their neighborhood if it lowers values solely due to the increase in supply. No one wants to see their property values drop. Your house is your main financial asset. You can’t afford to take the loss. Let it happen in another neighborhood. And thus, the NIMBY is born, with the net result that home purchase prices stay sky-high. The impact, of course, of this is that less folks buy (and thus can use the mortgage deduction), and more folks — if housing is available — rent. This increases the demand for the rental units, which (as the supply doesn’t increase as fast), increases the rent.

So, why not build more rental housing? Because those same folks that don’t want more low-density single family housing in their neighborhood don’t want high-density housing. Think what that will do to the traffic! We won’t be able to get anywhere! And if we make housing more affordable, all that riff-raff will move to our neighborhood, lowering values even further. Oh, and don’t get me started on what adding low income housing does to our housing values!

In the end, it is people who are protecting the values of their single family homes that keep the market high. Banks and other financial institutions are complicit in this: making it easier to take out riskier loans with lower down payments to make more expensive houses affordable, and then selling off those loans so they don’t keep the risk in the community (that’s part of what caused the housing crisis). Remember: What they can’t make in interest rate income they can make by having a smaller percentage of a larger base amount, with a longer loan. So what if they homeowner loses the loan? They can forclose and sell it to someone else making even more money the second or third or fourth time around.

The high housing prices also mean that those who can afford to buy and built multi-unit housing are those at the upper end of the financial spectrum. If these multi-unit complexes are built as condos, you have the same problems as above: housing prices that keep raising (which also keeps raising the prices of the detached non-condo houses). If they are built as rentals, the landlords want to keep the prices up — and thus they fight any low income units. But eventually there will be higher density, which will give us — you guessed it — Manhattan.

And that, folks, is why housing is so expensive. You have no one but yourself and human nature to blame.

This entry was originally posted on Observations Along The Road (on cahighways.org) as this entry by cahwyguy. Although you can comment on DW, please make comments on original post at the Wordpress blog using the link below; you can sign in with your LJ, FB, or a myriad of other accounts. There are currently comments on the Wordpress blog. PS: If you see share buttons above, note that they do not work outside of the Wordpress blog.

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To close out the week, a tasty news chum stew, wherein I pull out the chunks and provide commentary to chew on:

Dealing with Ticket Scalpers. Ken Davenport had an interesting commentary on the ticket resale market, triggered by the news that Hamilton in London is going to a ticketless system — instead, you swipe your payment card for entry. I have a number of problems with this — primarily, that it hurts legitimate patrons. Things come up in life, and occasionally you need to change your tickets to a different date — but they are non-refundable. You bought the tickets — you should be able to give them to a friend (possibly being reimbursed for cost), or donate them to a charity; these anti-scalping measures seem to prevent that. As for Cameron Macintosh and Hamilton, it is a very bad idea. Not only does it disenfranchise those with cash — who are often the younger audiences we must get into theatre, but how often had you had to ice a card due to fraud and replaced it with a new card and new number. Unfortunately, it is a fact of life: when you have a limited highly desired product, there will be a secondary resale market.
Steve Allen Theatre Going Away. I received some sad theatre news this week in a mailing from the Trepany House Theatre Company: In Summer 2017, the CFI-LA building and the Steve Allen Theatre inside will be torn down this summer to make room for new condos. CFI-LA confirmed this in their latest newsletter: “CFI has accepted a favorable offer on the property where the Center for Inquiry–Los Angeles now resides, and this vibrant and active branch is expected to have a great new location by the fall. This is a positive development for CFI–L.A., which will mean a brand new home for the community, and the resources to keep it thriving.” This is sad — the Steve Allen Theatre was home to Meeting of Minds (which was created by Allen), and the memory of Allen is too important to disappear.
Jewish Feminism and Brotherhood Privilege. Soferet Jen Taylor Friedman created Tfillin Barbie a few years ago. In response to Mattel releasing a set of Barbies in all shapes, colors, and sizes, Jen has created an Intersectional Barbie Dream Minyan “because Jewish feminism shouldn’t be only for white girls.” I love the copy Jen wrote; here’s the first paragraph to give you an idea: “Maybe some of them are Sephardic and some are Maghrebi and one is an adult convert and one was adopted and converted as a child. One of them has blue hair. One of them has red hair, and one of them has red highlights. Nobody in this minyan ever says “But where are you really from?” or “But surely you weren’t born Jewish.” Some of them are what Mattel calls “curvy.” Some of them are short.” I especially the last sentence: “In principle, Kens are welcome in this minyan, but today they’re outside fixing breakfast, which is why you can’t see them.” That’s the men’s club for you. Always fixing the food in the back. I’ll bet they are using a BBQ.
Body Positivity and Modeling. If you’ve been reading here recently, you know I’ve been talking about body positivity. Perhaps it is because I find all people beautiful and enjoy watching the diversity (especially of the opposite sex) — and people are at their most beautiful when they are happy with themselves. That’s why I supported The Nu Project and its message. It shouldn’t be a surprise that a recent interview with Emme on the A-Plus blog caught my eye. In particular, I appreciate it when she said, “It’s not a hidden, hushed conversation anymore. Every day, women are showing themselves in all forms of dress (or undress) on social media where you would NEVER [have seen] this in the ’90s. A revolution of female strength and power — thin, medium, and curvy — is at hand. It’s a time to feel blessed to be in! It begs me to say men also are gaining from this liberation. Body image and self-esteem are not only a woman’s trip. Men are on it and dealing with very similar issues, but feel ashamed to speak up about it. The eating disorder clinics are full with young men, fathers, and boys — reflecting the phenomenon today.” This all goes back to the key line from my favorite musical, Two Gentlemen of Verona: “You can’t love another without loving yourself.”
Rights and the Backlash . Have you ever been somewhere where a group that was in the minority started exerting their rights, and the members of the formerly privileged group started fighting back? Did this fighting back often progress to violence against the minority group, disturbing images, and even more disturbing behavior? Was the end conclusion something you liked? I’m not talking about Donald Trump here (although I well could be); rather, my cousin has brought to my attention a very interesting article about the situation in South Korea between women and men. Feminism is rising in South Koren, and a deep-seated misogynist backlash is coming out (just like the “white privilege” backlash after #blacklivesmatter). It’s getting ugly. A really interesting article, well worth reading.
The Zombies of Penzance. Don’t you just love that title. The Zombies of Penzance is a new musical that is about to have a reading and a staging in St. Louis. I just love the description, and look forward to this being staged in LA: “In The Zombies of Penzance (subtitled At Night Come the Flesh Eaters), according to press notes, “Major-General Stanley is a retired zombie hunter, who doesn’t want his daughters marrying the dreaded Zombies of Penzance (for obvious reasons). According to documents found with the manuscripts, Gilbert and Sullivan finished work on The Zombies of Penzance in mid-1878, but their producer Richard D’Oyly-Carte refused to produce it, calling it vulgar, impolitic, and unchristian, and in one letter, ‘an operatic abomination, an obscene foray into the darkest of the occult arts.’ In a letter to his cousin, Gilbert expressed his deep disappointment, writing ‘I fear the walking dead shall be the end of me yet.’ Until now, music scholars had been baffled by that reference. After a battle that almost ended the partnership, the team reluctantly agreed to rewrite their show, and in 1879, D’Oyly-Carte debuted the much more conventional, revised version, The Pirates of Penzance, which added the characters of Ruth and the policemen, and eliminated all references to zombism.””
Genealogy and Personal Information. Genealogists have a hard problem — especially amateur genealogists. You want to share the information to get the most knowledge about your family tree, and you want to be able to research online, but you have to be careful about exposing PII (personally identifyable information). There’s loads of PII in genealogy: addresses, mother’s maiden names, birthplaces, school dates and locations, and such. You’ll see why that is a risk when you think about all those password questions you get. This has come to the forefront of people’s attention with a story going viral on Facebook about how one genealogy site has scraped public databases to get addresses, and has published them for free. This has everyone up in arms, but they are forgetting one fact: this is information that was already PUBLIC. If someone was stalking you, they don’t need this site to do it. The information is easily discovered with a bit of Google-fu. Still, you can opt out if you wish. I likely won’t bother: I was in my last house 10+ years, and this house 10+ years, and am easy to find. [Not to mention that of all the Faigin’s out there, I’m not in their database. Cousins are. I’m not.]
Housing Style. I live in a single-story ranch house. But what makes such a house a “ranch house”. What is “Cape Cod”? Here’s a handy guide on personal housing architectural styles. What type of house do you live in?
Gluten-Free and Fads. Lastly, an article that explores the question: Is gluten-free more than a fad? By that, the real question they mean is: Should gluten-free be for more than just celiacs? These other folks are known as “PWAGs;” in the medical jargon: “people without celiac disease avoiding gluten.” [Note that this is a very different thing than a PAWG, so be careful when you search, although a PWAG can be a PAWG]. They’re often stigmatized as faddish foodies or placebo-addled hypochondriacs who don’t understand the science behind a serious health problem. According to a new study published this month in the journal Mayo Clinic Proceedings, their number tripled between 2009 and 2014, while the number of cases of celiac disease stayed flat. The article notes that there is growing evidence that severe gluten sensitivities exist outside the realm of celiac disease; further, researchers simply don’t know how many of the people following a gluten-free diet may actually have a legitimate health complaint. It notes how many PWAGs (glad I didn’t mistype that) find relief in a gluten-free diet, and people still aren’t sure why.

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Crossposts: http://cahwyguy.livejournal.com/1886610.html

userpic=observations To close out our lunchtime news chum for the week, here are a few articles about some unexpected changes reported in this week’s news:

Free Checking. We all know TANSTAAFL, meaning that “free” checking usually isn’t. As opposed to providing checking and imposing a lot of fees after the fact, some banks are now starting with a basic products and letting the customer build the features they want to add, which determines the monthly cost. The article calls it ala-carte checking, but I see it more as transparency about what you are getting.
National Cathedral. In light of decisions in MD and DC regarding same sex marriage, the National Cathedral has announced it will perform same-sex ceremonies. Good! This truly demonstrates that public commitment to one’s partner(s), same sex or different, is what is mainstream, and that the old ideas are just like old bread that has been left out too long. In a related article, the Marines have ordered spouses clubs on base to accept the partners of same-sex military couples, even though they are private clubs. Say what you will about the military: The Marines have been exemplary in implementing the repeal of DADT. Basically, the government said to accept gays; it’s goverment policy, we do it. Gotta admire that.
Housing Sales. We’ve all been hearing the housing market is picking up a little. Even more interesting is the fact that the number of short sales is outpacing the number of foreclosures, at least here in SoCal. This is demonstrating to banks that it is cheaper to move the property to a new owner in good condition, speedily, than all the hassles and damage of foreclosure. There’s even activity in Vegas on this.
Token Changes. Monopoly is running a survey to choose some new tokens for the Monopoly game, and to get rid of some. I think it is a publicity stunt; after all, who plays Monopoly?
Happy Books. An interesting change here: In the UK, McDonalds has replaced the toys in Happy Meals with books. I think we should push for that in the US!
The Chinese Theatre. Turns out the Grauman’s Chinese Theatre may soon be named… by the Chinese. It appears that TCL, a Chinese Firm, has just bought the naming rights for the Grauman’s Chinese for more than $5 million. It will now be called the TCL Chinese, and the money will be used for a slew of infrastructure improvements, such as repairing the concrete in front of the theatre that a bunch of people walked through when it was wet. As an aside, I’m actually distantly related to the Grauman family.
Hidden Menus. We all know about the hidden menu at In-N-Out. Did you know there was one at Panera? It emphasizes low carbs, and by the looks of it, might be good for the gluten-free folks.
Setting an Example. And for our last unexpected change. Allyn Rose is the contestant from DC for Miss America, which is announced Saturday. Win or lose, due to her family history of breast cancer, she plans on getting a double mastectomy right after the competition. She’s 24, and her mother found her first lump at 27. The disease took her mother, grandmother, and great aunt. In some ways, I hope she wins: it will truly demonstrate that it is not the body that makes Miss America, it is the person.