In Monday’s Fresno Bee, former Fresno mayor Jim Patterson takes on high local housing costs and offers a dose of common sense:
“The cost of a new home in Fresno today is out of reach for more than 70% of the people living here. In the rest of California, fewer than 20% can afford a new home. A lifetime of paying rent lies ahead for the vast majority of Californians. . . . . Doing something about land scarcity would be a good start. Cities remain the gatekeeper to affordable homeownership. Too many around here maintain a dangerously low supply of land zoned for new housing. Raw land prices are beginning to top $100,000 per acre. Experts tell me cities need at least a 20-year supply of land set aside for new homes. Many cities have failed to do so and the results are obvious. Some landowners enjoy near monopoly status in a time of high demand. They can pretty much peg the price anywhere they want. A good dose of competition is needed. Quickly adding to the raw land supply could help moderate home prices significantly. Government fees and bureaucratic regulations should be another target. Some estimates put the time and money costs of navigating state and local mandates at more than 30% of the price of a new home. Politicians like to say, “Let the builders pay.” The truth is you and I pay for the cost of runaway government. It is imbedded in the sticker price of a new home. Or have we forgotten the tenets of elementary economics? . . . . Future generations deserve better than not-in-my-backyard drivel, drawbridge selfishness and politicians who trade statesmanship and vision for fleeting favoritism.”
Well put. For a case study in how regulations and poor planning impact housing supply and affordability, check out Reason’s 2001 study on growth management in Ventura County:
“This study suggests that there are significant deficiencies in the capacity of existing planning systems to accommodate rational planning goals. Despite passing a countywide growth-management initiative in 1998, most cities in Ventura County have not adjusted their plans or their development-approval processes to accommodate expected housing demand, creating conditions that are likely to lead to further housing-price escalation and increased political manipulation of the housing market. The analysis of Ventura County shows that most of its cities will face significant housing shortages well before the end of the county’s 25-year planning horizon. In fact, most cities in Ventura County have no more than 10 years of housing capacity left under current policies and entitlement practices.”