Housing Dynamics and Demographics
- Posted by ryan on May 11th, 2009 filed in Cities
Kevin Drum links to an interesting Witold Rybczynski piece on the cost of housing in California. Why is (was?) it so darn high:
The first [reason] is Proposition 13, the 1978 California ballot initiative that required local governments to reduce property taxes and limit future increases, and sparked similar taxpayer-driven initiatives in other states. Henceforth, municipalities were unable to finance the up-front costs of infrastructure in new communities, as they had previously done, and instead required developers to pay for roads and sewers, and often for parks and other public amenities as well. These costs were passed on to home buyers, drastically increasing the selling price of a house.
The second reason is the Ed Glaeser story — restrictions on new supply. Kevin remarks that this is yet another of the ways in which Boomers screwed Xers; Boomers got cheap California housing made extra cheap by the fact that tax revenue paid for infrastructure improvements, then enjoyed fantastic rises in home prices boosted by the development restrictions they sought and the tax cap they put on the books. There’s actually another way in which this involves a screwing of future generations. As Glaeser has also pointed out, coastal California is among the greenest places in America, in terms of per capita carbon emissions, but high housing costs and related development restrictions mean that housing demand in California gets pushed elsewhere — to places that are far dirtier. End result — more emissions and more warming.
But the really interesting point to me is that the Boomers have also screwed themselves. The policies mentioned above — forcing developers to pay for infrastructure improvements, draconian limits on new taxes, strict constraints on new supply — have made California decidedly unfriendly to seniors. The Golden State would be a great place for one’s golden years, if only it were remotely affordable, and if one could get around without a car. But California is having a devil of a time financing new transit and rail infrastructure, and the few places that are transit accessible and walkable are the ones that have held up best amid the housing crunch; those 50% price reductions are coming in places that are useless for those unwilling to hop on a freeway.
You’re going to see this all over the country. A generation that worked very hard to build an urban geography suited to a nuclear family with young children is now getting old. What are they supposed to do with all these four bedroom homes that are a 15-minute drive from a cup of coffee and a newspaper?
May 11th, 2009 at 11:28 am
There’s a whole lot of green in those development restrictions. Just sayin’.
May 11th, 2009 at 3:15 pm
“What are they supposed to do with all these four bedroom homes that are a 15-minute drive from a cup of coffee and a newspaper?”
Sell them cheap as they move into denser more central condo developments with on-site medical of course.
May 21st, 2009 at 2:06 pm
I found you via Postbourgie, where I left this comment, edited for here:
“It’s odd - and misplaced to an extent - that this is blamed on “Boomers,” considering that suburbanization as we know it has been happening since the end of WWII, and was made really stimulated in the early years by the GI Bill, a federal-level program that black veterans were routinely denied. Slum clearance and urban renewal followed in the 1950s, the majority of public housing was built in the 1930s and 1940s, segregated initially with projects for whites and projects for blacks. All of this was done as the earliest generations of baby boomers were born. Ditto the Interstate Highway System that came about under Eisenhower.
The roots of urban-suburban segregation precede the Baby Boomers. Where I think you are correct is in suburban NIMBY-driven local zoning efforts that may have followed in the 1970s and 1980s, but by then, this racial and economic (and now generational) spatial segregation was well defined.”