The other day we noted a big article in the LA Times, reporting the calamitous and growing housing situation in California. ( http://www.latimes.com/projects/la-pol-ca-housing-supply/ ) Today we follow up with another journalistic heavyweight, to wit, the front page of the New York Times; Adam Nagourney and Conor Daugherty, Housing Costs Put California in Crisis Mode, NY Times, 7/8/17, at p. A1. To get the whole thing, go to https://www.nytimes.com/2017/07/17/us/california-housing-crisis.html?ref=todayspaper&_r=0
The bottom line is that California state law requires that cities follow the housing elements of their general plans which include the requirement that provisions be made for affordable housing. But this law is administered by cities and they have no intention of following it because their populations are the very embodiment of NIMBYism and they take a dim view of their local glorious leaders increasing the local housing stock. Period. One of the transparent gimmicks used by cities to stultify new housing is to approve commercial zoning with room for commercial construction that will employ, say, over 5000 new employees. But at the same time they approve residential zoning that will provide room for maybe 500 new dwellings. The result is right out of classic Econ 101: the demand for housing overwhelms supply, with prices zooming up accordingly. In the last five years, California housing prices have jumped by as much as 75%. And it is no longer posh coastal communities that we are talking about. This madness is spreading to inland communities.
And not much relief is coming from the courts which stand ever-ready to nit-pick housing project environmental reports to death, which — to put it mildly — isn’t helpful at all.
So stand by for the inevitable popping of our housing bubble. To borrow the line of Gretchen Morgenson of the New Yourk Times when a few years she predicted the bursting of the great housing bubble of 2008, by saying “it won’t be pretty.”