Why California Housing Is So Expensive

Here we go again, folks. Today’s Los Angeles Times brings us what we like to call “sad but dependable news for the bald.” California housing is overly expensive, and the reason why that is so is that the supply of new homes is held down by local land use regulations. The Times illustrates the story with a prominently placed article, Andrew Khouri, New Home Shrinkage, LA Times, August 7, 2014, at p. B1.

“About 19,000 new homes will be sold this year in the six-county region — 53% less than the 25-year average average,. . .according to a spokesman for John Burns Real Estate Consultants in Irvine.

“The difficulty in winning construction approvals, . . . is a trend that long predates the housing meltdown and will probably continue long after. California has failed to build enough homes, relative to population growth, every year since 1989, according to a November 2003 report from a state senate committee.”

So what else is new? Reports like that, including two by Presidential Commissions on Housing, go back at least to the 1990s. So it boils down to what you were taught in Econ 101: When the supply is reduced while demand goes on, prices go up.

The handwriting on the wall was there for all to see as far back as August 30, 1998. That’s when the L.A. Times ran three — count ‘em, three — articles that painted a grim picture of the housing calamity that was overtaking the California housing market.

Truth Teller?

There is a fellow in California, who identifies himself as Dean (“Dino”) Cortopassi, and who has been running full-page ads in California newspapers, under the heading of “LIAR, LIAR, PANTS ON FIRE!” In them, he purports to expose government misrepresentations concerning California’s fiscal irresponsibility and the government’s concealment of the true financial picture.

We don’t know whether and to what extent Mr. Cortopassi’s allegations are true, but he sure lays it on the line. Our attention was attracted by his full-page ad in today’s LA Times (Aug.7, 2014, at p. A13). Like other Times ads, it’s not available electronically on line; you have to buy a hard copy of today’s LA Times to see it. The ad is devoted to allegations of overspending by the California Departments of Corrections and good ol’ Caltrans, particularly the latter’s overspending on the Bay Bridge. Interesting stuff, if true.

So we intend to keep an eye on his output and see if we can learn stuff from it.

But a word of caution: When we first posted this, we had trouble opening Mr. Cortopassi’s web page. But by this time of day (4:35 PM in California) all is well and you can open that web page containing his past articles by clicking on www.liar-liar.us . So please disregard the earlier (deleted) version of this post that appeared earlier today.

Which New York Times Expressions of Indignation Do You Believe?

(Every now and then something happens that inspires us to depart from our usual, preferred topics of eminent domain and land use, and comment on something else. This is such a post.)


Unless you have been vacationing on the Moon lately, you must know that there is another war going on in the Middle East. After years of absorbing rocket strikes from Gaza, the Israelis finally got pissed off and struck back big time. But it turns out that the vaunted Arab rockets are crap and, as real wars go, have been overwhelmingly unable to strike their intended targets. Add to that Israel’s amazing Iron Dome missile defense system and the Arab rockets haven’t achieved anything  to speak off. Still, the Arabs have managed to kill some three dozen Israeli soldiers, and conduct a propaganda campaign.

But in spite of the Arab “fighters’” lack of military prowess, they have been real good at hiding behind women and children, so that when the Israelis fire back, they perforce inflict what has become known as ”collateral damage” on civilians. Add to that the fact that the Arab “fighters” like to hide in schools and hospitals, and the latter casualties are higher than they should be. What to do?

If you want to be honest, there is nothing that can be done; no rational person can ask that the Israelis cease defending themselves effectively; that they cease firing back at people who fire at them. But that  process of self-defense produces those “collateral damage” casualties when the Arab “fighters” hide in schools and hospitals. Thus the Arabs effectively say: “When we kill Israelis, it’s hunky dory and we are proud of it, but when they fire back, that’s an “outrage.” So reports the NY Times, on the front page above the fold. Missile Strike Near U.N. School in Gaza Kills 10, Aug. 4, 2014, at p. A1.

That’s moral bullshit, of course, but that’s they way it is. Thus, the Times is throwing a conniption fit over the death of ten — count them, ten — Arabs who got hit when Israeli shells fired in response to Arab rocket fire, and hit an area near a school. Please understand, your faithful servant was a target in WW II, and so we are not unsympathetic to the plight of civilian populations on both sides of a shooting war, even though civilian Arab casualties are “collateral,” i.e., unintended, and deemed regrettable but unavoidable, whereas Arabs do what they can to maximize Israeli civilian casualties, and are proud of it.

At the same time — that’s today’s NY Times — we learn that over in Libya there is an internecine war among Arab factions in that country and — guess what? — 25 Libyans have been killed (British Citizens Flee Tripoli on Ship as 25 Libyans Are Reportedly Killed in Fighting, Aug.4, 2014, at p. A4). But what’s remarkable about that Times dispatch is that it utters not a peep of indignation over the deaths of 2.5 times as may Libyan as Gazans. So what happened? How come no displays of indignation? No accusations of “outrageousness.” No demands for UN action? No nothin’ even though things in Libya must be pretty nasty and pretty dangerous to civilians, what with all those Brits’ splitting as fast as they can.

We have no intention of plumbing the depths of the moral disparity of this reportage. We think it’s sufficient to note this gross asymmetry in the displays of moral outrage in these two locales. When Libyan Arabs kill 25 people, it’s hey man, c’est la guerre. But when the Israelis defend themselves and kill Arabs, that’s an outrage. You don’t suppose that this has something to do with the fact that the folks who are the object of all that “outrage” are Jewish, whereas the Libyans aren’t. Could it be that the Times considers the latter barbarians of whom nothing better is expected, while the former are . . .well, Jews, so they are held to high standards whereas for their enemies, anything goes, so that the Times need not concern itself with moral symmetry, consistency of moral judgment, and all that other good stuff. So as we suggested above, all that Times display and reportorial “outrage” is plain old bullshit.

It was an American, General Sherman, who told us that “War is hell.” Not “heck,” but “hell.” So that people who start a war (as did the Arabs in this case by firing thousands of rockets at Israel) have nothing to complain about when the gates of hell that they opened release forces of violence that they now have to confront and live with.

Follow up: If any of this leaves you with the impression that the moral asymmetry we note extends to reportage, go to the head of the class. For an article dealing with press intimidation by the Arabs go to http://blogs.forward.com/forward-thinking/203449/why-no-photos-of-hamas-militants/?







California Choo-Choo (Cont’d.)

We haven’t seen the Court of Appeal opinion yet, but according the LA Times the California Court of Appeal has reversed the trial court’s decision enjoining proceeding with the “bullet train” project. As best as we can figure out, the reason for the reversal was the appellate court’s conclusion that preliminary expenditures (such as the ones being challenged) are OK, with the final budget yet to be determined.

The case is California High-Speed Rail Authority et al. v. The Superior Court of Sacramento County, Ct. App. No. C075668.


This News Item is Worth Reading, if Only for Its Headline Which Says . . .

Red Wings Generously Agree to Accept Huge Sums of Money From Public, by Bill Bradley, deadspin.com Jul. 21, 2014. In this case, “the pubic” means Detroit. 

Since Detroit is bankrupt, that sounds like an intriguing headline. Check out the article – click on http://deadspin.com/detroit-scam-city-how-the-red-wings-took-hockeytown-fo-1534228789/1608278028/+bradleybill


Lowball Watch — California

Word reaches us that a verdict has come down in an eminent domain case in which the Los Angeles County Metropolitan Transportation Authority took a 3777 sq. ft. building (including a billboard) from the Veterans of Foreign Wars. The county’s “final” offer was $1,500,000, but after the court decided a motion in limine in the owner’s favor, the offer went up to $2,250,000.

The verdict was $3,357,323 (on the owner’s appraisal opinion of $3,805,000, and the condemnor’s appraiser’s trial opinion of $1,004,000. Which makes the verdict 3.34 times the condemnor’s trial appraisal.

So it appears that the condemnor proffered three different opinions of value for the same building, one of which was less than what it was before the trial court ruled on that motion in limine, whch sounds to us like some sort of effort on the condemnor’s part to grant itself a do-it-yourself motion in limine. And we are supposed to trust these guys?

The owners intend to request the court to award them their attorneys’ fees. Stay tuned.

Climate Change Proponents Use More Energy Than the Doubters

You might think that folks who worry about human activities contributing to climate change would consume less energy than those who disagree. Right? Wrong.

We now learn that the opposite is true. People who profess to worry about such things tend to use more energy than those who don’t. So says a British study inquiring into such matters, as reported in the UK by The Telegraph. Click here http://www.telegraph.co.uk/earth/greenpolitics/10965887/People-who-claim-to-worry-about-climate-change-use-more-electricity.html

Remember Eminent Domain Takings for Malls?

Those of us with a few grey hairs may recall when taking land by eminent domain for malls was just the thing. In spite of the fact that these takings were clearly for private use — i.e., for retail shops, movie theaters and restaurants, the people behind them touted their handiwork as “public use.” And judges, pretending that this was for real, rubber-stamped these takings and allowed the use of eminent domain for these private enterprises, in spite of the Constitutional requirement that eminent domain be used only for “public use.”

It’s 20 or 30 years later now, and guess what? Those big malls that were supposed to generate beaucoup money for cities in the form of sales taxes, and increased property taxes, are not doing so well.

We could go on about this subject, and cite our readers to the book of MIT Professor Bernard Frieden and his co-author Lynn Sagalyn, Downtown: How America Rebuilds Cities, describing in detail how cities, working hand in glove with their favored [re]developers would take land by eminent domain, turn it over to those [re]developers at bargain basement prices, usually less than what the cities paid for it; the idea being that as the malls were constructed and filled with commercial tenants, the subject properties would get more valuable, pay more property  taxes, etc., etc. As California Court of Appeal Justice Macklin Fleming once put it in one of his opinions, the promise was that all this would bake a bigger economic pie with bigger slices for all. Except, to continue in Justice Fleming’s metaphor, it often turned out that that instead of enriching everybody, these projects failed, producing only pie in the sky.

Anyway, what is happening now is that the day of malls is over, and many of them are either in a state of decline or have gone bust altogether. Proceeding on the premise that a picture is worth a thousand words, we invite your attention to this internet posting that shows in vivid color the remnants of malls whose “pie” did not bake well. Click on http://www.buzzfeed.com/mjs538/completely-surreal-pictures-of-americas-abandoned-malls and you’ll get the picture.

What is left unsaid however, is that often some of these malls were built with public funds, and to get that money and use it to cover the cost of land acquisition and mall construction, cities sold municipal bonds in the hope that the increased taxes generated by those malls would take care of servicing and eventually paying off those bonds, so as the promoters of these projects sometimes bragged, this would be “free money.” But alas, in reality the cash flow from those projects had to be used to pay the interest on those bonds, some of the touted the tax revenues had to be diverted into the pockets of bond holders as tax-free interest, or forgiven altogether as part of the deal that cities often made with the redevelopers.

Unfortunately, the internet post cited above does not tell us how many of those failing malls were built with money raised through the sale of such municipal bonds, and whether,in spite of their failure, the cities that sponsored them and issued those bonds, remain on the hook for the outstanding balances.