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Hope for California — housing edition

Summary:
 California has at last passed the first laws overturning some residential zoning restrictions. WSJ coverage here.  From the California YIMBY press release, “The end of exclusionary, single-unit zoning in California is a historic moment -- we’ve taken a huge step toward making California a more affordable, equitable, and inclusive state.”...SB 9 ... makes it legal to ...

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 California has at last passed the first laws overturning some residential zoning restrictions. WSJ coverage here.  

From the California YIMBY press release, 

“The end of exclusionary, single-unit zoning in California is a historic moment -- we’ve taken a huge step toward making California a more affordable, equitable, and inclusive state.”

...SB 9 ... makes it legal to build duplexes on lots zoned for one house statewide; the law also allows property owners to split their lots into two separate parcels. ...SB 10 ... makes it easier for cities to approve zoning changes for small apartments in neighborhoods currently zoned for single houses.

OK, from WSJ, not yet Libertarian Nirvana, 

The law has provisions to prevent the displacement of renters and protect homes in historic districts and fire-prone areas.

And why just two? If you want density how about apartments? But sometimes silence is golden: 

Affordable housing advocates also criticized the legislation for not containing provisions that mandate any new homes that are built be affordable.

OK, this is only a small step. California has a huge set of laws and regulations in the way of sensible housing and driving up prices. (Lee Ohanian has a great summary here). But it is noteworthy because California is a one-party progressive state. One expects more and more limitations, with the "affordability crisis" addressed by demands for "affordable" housing, i.e. tiny amounts of absurdly overpriced government-provided houses, or mandates imposed on the few developments allowed to proceed, and then handed out to people on long waiting lists, not young people who want to move to good jobs.   The idea that the way to bring down housing costs is simply to... allow people to build houses, and sell them, is remarkable here. Emphasis on allow, a new concept to the progressive narrative here in California. Not "we," the government,  or "I" the governor "will build housing," but we will allow people including people organized into businesses known as "corporations" and "developers" to build housing. That is truly a major conceptual leap.

This event offers a ray of hope for reform of this dysfunctional state. (I'm in a look for the ray of hope mood this morning.) In a one-party state, issues are discussed within the Party, and coalitions form. It is possible for common sense to prevail. Issues do not have to be infected with poisonous partisanship. Within the party, you can talk about housing rules without breathing the word "Trump."  

For example, one of the organizations behind this is the California YIMBY (yes in my backyard) group. They don't state a political affiliation, but basically everyone in urban California is a Democrat, if you want to get anywhere you have to appeal to that sensibility, they use words like "affordable" "equitable" and "inclusive" a lot, and their splash page says "vote no no the recall" to stop this "assault on our Democracy." They don't sound too Republican to me. Well, great. If they were they would get nowhere. 

Meanwhile, where are California Republicans? The party of property rights, individual liberties? Screaming "This is not enough! It's my property I can build what I damn well want on it, and sell it to whoever I want to at whatever price we agree on," right? Nope. They're against it. 

(To their credit they are loudly clamoring for reform to California's environmental quality act, which is primarily misused to stop development anytime anywhere, doing little to help the environment and a lot to increase emissions as people have to drive a long way rather than live near work.) 

Meanwhile, San Franciso is building "tiny houses" for homeless on parking lots, because it is cheaper than the tent spaces. 

Hope for California -- housing edition


This complements a policy that brings "homelessness funding to about $800 million for each of the next two years,"  or $330,000 per homeless person per the New Yorker (a really good article) back when the budget has half that large. "officials are considering buying more properties for homeless housing, placing people in vacant apartments around the city, and opening a safe RV site for 150 vehicles." The word "incentives" is still lost on SF. 

Back when anybody wanted to work in SF, those tiny houses could probably have rented for $5,000 a month to tech workers. 

The local nextdoor exploded with the usual outrage of cognitive dissonance. We must stop this!  We must protect our property values! Yet simultaneously,  Do something about the "affordability crisis?" Higher property values and.. lower property values coexist in the same mind, along with keep people out and let's have more diversity, don't allow houses near work but save the climate. Ray of hope, one or two commenters, all loyal progressives (I presume, after all they live here), get the point: 

Hope for California -- housing edition

(Note, yes, I don't want an apartment building next to my house either. The right way to solve this is a functioning market in air rights. If you don't want an apartment building next to your house, buy an easement. Not happening soon, but I know the "you don't want an apartment next to your house" argument is coming in the comments.

Also, we don't have to worry too much. The profit-maximizing thing to do is often sensible. On a block of mansions in Palo Alto, the profit-maximizing thing to do is to build a huge mansion, not a crowded 4plex.)


John H. Cochrane
In real life I'm a Senior Fellow of the Hoover Institution at Stanford. I was formerly a professor at the University of Chicago Booth School of Business. I'm also an adjunct scholar of the Cato Institute. I'm not really grumpy by the way!

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