Commentary: What Do People Want in Terms of Housing?

By David M. Greenwald
Executive Editor

There has been a lot of talk about SB 9 and whether voters will rise up and lead an initiative to repeal it.  Proponents of the law hope that by requiring cities to allow greater density in single-family neighborhoods through duplexes and even four units on each property, it can alleviate the housing crisis.

But opponents of the law believe it will destroy single-family neighborhoods and forced density into communities that were not built for it.

The measures have seen strong pushback with communities across the state as well as the League of California Cities opposing the bills.

The LA Times reported this week that, since passage, many cities have been attempting to blunt or block the effects, including mandating parking spots or imposing unrealistic height or size limits.

Moreover, there is an effort underway to put a measure on the November 2022 ballot that would not just overturn Senate Bills 9 and 10 but would prohibit the state from ever overriding local zoning regulations again.

While some groups have organized to oppose such new laws, it is hard to know whether there is actually enough anger, let alone money, to fuel a true initiative drive that has a chance to succeed.

One thing we really don’t have a great sense of—what do voters want?  After all, while it is true that some residents in single-family neighborhoods are opposed to the change, unless there is actually a live proposal for new development, the threat is more theoretical than real.

Moreover, we are in the middle of a housing crisis where many are priced out of the very neighborhoods that this law would impact.

Amid predictions of a backlash comes some data—granted, out of LA—that at least LA voters actually do want more higher density housing in single-family neighborhoods.

Contrary to the expectations of some, a poll at least of LA County voters show them to favor new state laws allowing greater density in single-family neighborhoods.

“The idea of owning a house with a backyard has long been part of the ‘California dream.’ But the California reality for most people is renting an apartment or house they can barely afford,” an LA Times editorial pointed out on Sunday.

This year, the California legislature approved SB 9 and SB 10 that will allow for some increased density.  They were signed into law by the governor in September.

“Judging by the backlash from homeowners and city governments trying to put restrictions on the new laws, you would think the laws were mandating high-rises in single-family-zoned communities,” the editorial board writes.  “They’re not.”

They note: “We’re talking about allowing duplexes, fourplexes and small apartment buildings in residential neighborhoods, which used to be a common practice. And, in the case of SB 9, a property owner must live in one of the units for three years after a lot is split.”

At least in LA County however, despite the strong criticism, the voters actually support SB 9 and SB 10.

The LA Times poll conducted with the LA Business Council Institute found that, by a 55-27 margin, the voters support SB 9 and, by a 68-13 margin, they support SB 10.

Moreover, the question did not attempt to whitewash SB 9.

“SB 9 would offer homeowners new options to build up to four additional units on their lots by adding granny units, or by converting their home to a duplex, triplex, or fourplex, regardless of whether the property is currently zoned as single-family only. Do you support or oppose this new state law?”

Are LA residents going to be different from people who, say, live in Davis?  Of course.  But people forget that while existing homeowners may oppose these changes, there are a huge number of voters who are renters and being priced out in terms of both rental prices and out of homeownership, and that is what is driving housing the housing crisis.

The LA Times opines, “It’s outrageous that city governments and community groups are going against the will of the people who want more housing. It’s shameful that there is a move to undermine two laws that will allow a modest increase in housing in neighborhoods that have been reserved for decades for single-family homes.”

This is how housing crises happen and continue.  People assume that the voters live in similar circumstances and share the values of the most vocal people in the room.  With this issue, that might not be the case.

As the Times put it: “Los Angeles is not a castle. Homeowners cannot pull up the drawbridge and order the hoi polloi to go somewhere else. The city and the county have to find a way to accommodate moderate growth in housing in all neighborhoods.”

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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38 Comments

    1. Keith Olson

      I’m also curious as to the breakdown of how many people were asked?  How many were homeowners?

      While some groups have organized to oppose such new laws, it is hard to know whether there is actually enough anger, let alone money, to fuel a true initiative drive that has a chance to succeed.
      One thing we really don’t have a great sense of—what do voters want?  After all, while it is true that some residents in single-family neighborhoods are opposed to the change, unless there is actually a live proposal for new development, the threat is more theoretical than real.

      I agree, until homeowners start seeing densifying with fourplexes on lots in their neighborhoods they won’t be activists against SB9 and SB10.  But that day will come when the complaints and pics of the dense housing next to single family homes start circulating.

      1. David Greenwald

        Own 44, Rent 45. Live with family 7. 4 percent refused to answer. That’s pretty close to the breakdown in LA County – 45.8 percent own. It is lower than the state overage of 54 percent. But comparable to Davis which is 43.2 percent owners.

    2. David Greenwald

      I’ve commented extensively on this “poll” – it was a push poll commissioned by an advocacy group. Those reported findings are not actual findings but projections based on the pollster providing information to the voters.

      1. Keith Olson

        So what’s the breakdown of the poll you cited in your article?

        What percentage were homeowners?

        What percentage were people living in single family zoned neighborhoods?

      2. Ron Oertel

        I’ve commented extensively on this “poll” – it was a push poll commissioned by an advocacy group. Those reported findings are not actual findings but projections based on the pollster providing information to the voters.

        Let’s see a link to the survey YOU are referring to, David.  Let’s see the entire methodology, the questions asked, etc.

        And as Keith requested, something that isn’t behind a paywall.

        The LA Times poll conducted with the LA Business Council Institute found that, by a 55-27 margin, the voters support SB 9 and, by a 68-13 margin, they support SB 10.

        Given that this was referred to in an editorial in the LA Times, what makes you think that they (combined with the “LA Business Council”) are not an “advocacy group”?

  1. Ron Glick

    People complain about the homeless. People complain about new housing. I guess people don’t believe in cause and effect.

     “People assume that the voters live in similar circumstances and share the values of the most vocal people in the room.”

    A little projection there David. Do you know it when you write it?

    1. Alan Miller

      People complain about the homeless. People complain about new housing. I guess people don’t believe in cause and effect.

      Some people, some of them named Alan Miller, don’t believe that if you build 10 housing units in Davis, that the 10 meth addicts living down by the ditch will move into the 10 units built or the 10 units made vacant by the 10 people who moved into the 10 new units.  Some people, some of them named Alan Miller, think y’all know that already, but refuse to acknowledge.

      1. David Greenwald

        I think David Greenwald thinks that it’s probably not going to be a a one to one impact. Also it is probably not going to help the people who are in the worst situations, it may help people on margins, it may also prevent others from falling off the margins.

  2. Keith Y Echols

     “Los Angeles is not a castle. Homeowners cannot pull up the drawbridge and order the hoi polloi to go somewhere else.

    Why not?  Why must people accept new people to their communities without consideration?  It seems like to some, the idea that some people can not move to where they want and will have to move somewhere else just isn’t acceptable.  I guess if I go to any community and proclaim that I want to live there, I should be able to live there?  From an economics standpoint I get that growth fuels state and local economies.  But is a need for unending growth for economic viability really a long term viable plan?  I think that communities should decide if it suits them if they want to grow or not in terms of population and economy.

    I believe affordable housing should be for communities taking care of the less economically advantaged members of their community.   To me that means that I do not just get to show up to town to get a job and then get affordable housing.  That means that I have lived and/or worked in town for a period of time (a year?  2 years?) and have become part of the community and qualify for affordable housing.

    As for homelessness.  The right to shelter is not the same as a right to housing.  I believe that local homeless people should be taken care of by the community with affordable housing.  Transient homelessness (yes, I know it’s not clearly defined) should be taken care of through shelters that are mostly funded and administered by the state and county.

    I’m sure that there are a number of logistical holes to my comments.  But I believe they are more like guidelines (and not hard fast rules or policies) about how I view housing in communities.

    1. Ron Glick

      “Why must people accept new people to their communities without consideration?”

      Federal housing law designed to fight segregation.

      Davis went there with WDAAC vowing to provide housing for the internal needs of the community. As a result I believe they are mired in a giant mess with the inability to get financing during one of the lowest interest rate periods of all time. Three years later they still haven’t broken ground.

    2. Bill Marshall

      Why must people accept new people to their communities without consideration

      It’s called ‘humanity’… evidenced in many very old texts… not just limited to the Judaic-Christian-Islamic traditions… and going back far further… it is a moral/ethical concept… the concept of ‘buying in’ (compensation to those already in a community) is a relatively new, and somewhat perverse concept.  So new, that when we came to reside in 1979, it was not a prerequisite… it as understood that once here, we should ‘tote our own barge, lift our own bale’, but an “admittance fee”?  “initiation fee”?  a “consideration”?  Davis is not a “country club”.

      So Keith Y E:  what did you ‘pay’ to ‘buy in’, and who did you pay that to?  An honest, but admittedly baited question…

      I completely, emphatically, reject your concept that folk have to “compensate” existing folk for the ‘privilege’ of joining a community… by your logic, “new people” who move into existing housing, where the previous residents passed, or ‘moved on’ should make a payment to compensate you and others… even more so for people who have children born while in the community… “new people”… guess we owe the community for 3, all born when we lived in Davis… just name the amount, send me an invoice, and I’ll reject it as stupid, immoral, unethical, and unlawful (the latter Ron G addressed).

      I am NOT saying that we should need to significantly “subsidize” growth for the sake of growth… but to “make a profit”?  C’mon, that’s just wrong!  [Morally, ethically, legally]

      Mitigation is one thing… tending to zero-sum… charity/humanity another (do we care for others)… “compensation” is quite another…

      1. Keith Y Echols

        It’s just rational behavior.  The tribe/community/nation makes decisions that benefits the people.

        Sometimes that means growing.  Sometimes it doesn’t.

        So new should fund things that benefit the community.  New fire stations, better roads,

         by your logic, “new people” who move into existing housing, where the previous residents passed, or ‘moved on’ should make a payment to compensate you and others… even more so for people who have children born while in the community… “new people”…

        In your moral indignation you’re getting the concepts discussed all twisted.  People replacing people that have moved or passed on IS NOT GROWTH.  

        Why do you believe that people have a right to live where ever they feel like living?

        1. Ron Oertel

          People replacing people

          Why do I think of a Barbara Streisand song, regarding this?

          “People . . . replacing people . . . are the luckiest people, in the world”

      2. Matt Williams

        I agree with Keith E. that Bill misread what Keith E. was saying.  People replacing people is not growth.  With that said, as housing prices in a community become less and less affordable, there is indeed a “payment” that a new homeowner in the community does make.  But to answer Bill’s question, that “payment” isn’t made to the community (or its jurisdictional entity). It is made to the person the new resident is purchasing their residence from.

        I personally would like to see Davis consider a real estate transfer tax that would be 100% paid by the person selling their house.  The logic behind such a tax is that a substantial portion of the appreciation in value of the house (the net margin between the historical purchase price and the sale price of the residence) is due to “community factors.”  Said another way, the quality of life of the community has contributed to the respective quality of life of the individual residents, and “giving back” or “paying forward” some of that benefit is not an unreasonable step to take for a person leaving town.

        JMO

        1. Keith Y Echols

          “payment” isn’t made to the community (or its jurisdictional entity). It is made to the person the new resident is purchasing their residence from.

          The way I look at “payment” is what the city negotiates as condition for approval with the builder.  That could mean a new park, direct work on some roads, contributing to a city’s transportation fund, parks and rec fund, police fund, general fund…etc…   That line item expense for the builder is then factored into the price of the homes for sale.  So the price of the “payment” ultimately usually goes to the new home buyer.

          I personally would like to see Davis consider a real estate transfer tax that would be 100% paid by the person selling their house.

          That would be interesting and a good way to generate revenue for the city.  It would also incentivize cities to create more homes because of more potential sources of revenue.  As to who pays the transfer tax?  I’m not sure if you can stipulate who pays it.  But maybe you can.  But like the builder “payment” a transfer tax is just going to become another line item cost (and so factored into the price) in the buying and selling of real estate so that ultimately the market will determine to what degree the buyer or seller will pay the transfer tax.

          I think the other thing that the state and counties should revisit is the share of property taxes collected between cities and counties.  As you know, right now it makes little sense for a city to grow residentially in the long term financially because of the share of property tax cities receive in Yolo County (and presumably other cities in CA).

        2. Richard_McCann

          I think the other thing that the state and counties should revisit is the share of property taxes collected between cities and counties.

          I’ve made this point a couple times, including a longer discourse on reviving a form of redevelopment agencies that exclude the condemnation powers that were being abused.

          On a transfer tax, it won’t really matter who pays it because it will included in the overall transaction in some manner. If the seller pays it and the seller has the bargaining power, the tax will be rolled into the price. If the buyer has the power, the seller will absorb it. (And more likely the “incidence” will be split between them in some proportion.)

    3. Richard_McCann

      Local communities can decide if growth suits them except when they’ve been designated by the state to serve a broader state purpose such as a university or a prison. Davis hosts a university that exists to serve the entire state with growing demand for college education and technical research (particularly agriculture.) So our community gives up the local right of determination in exchange for the social, cultural and economic benefits that make Davis a relatively desirable location relative to the surrounding communities, as reflected in the large house price premium.

      The problem of relying on housing prices as the signal as to who should be “allowed” to live in Davis is that the historic discrimination in the nation’s housing market makes the most desirable locations unaffordable for specific groups for whom wealth accumulation has been denied. Until we ameliorate that wealth distribution disequilibrium, we are obligated to find means to open up our housing markets and overcome the distorted price signals that discriminate. Otherwise, as others pointed out, we continue to institutionalize segregation.

      1. Matt Williams

        So our community gives up the local right of determination in exchange for the social, cultural and economic benefits that make Davis a relatively desirable location relative to the surrounding communities, as reflected in the large house price premium.

        .
        There is a fundamental economic flaw in the argument that Richard puts forward.  Home buyers do not receive that premium when they buy a house in Davis.  They pay that premium to the person(s) they are buying the house from.  When they subsequently sell the house, the next buyer reimburses them for the premium in the price they pay.  Nobody gets anything for free.  There is always a cost.

        Further, like almost all investments the percentage appreciation of the investment is much more important than the specific price that one pays or receives for the investment during the time of ownership.  The graph below shows the five-year appreciation curve for average housing values in (1) California, (2) Davis, (3) Woodland, and (4) West Sacramento.  As you can clearly see, while the average housing price in those four data cachement areas is different, the percentage increase of average housing value is virtually identical.  So a housing investment in Davis is performing no better and no worse than a housing investment in Woodland or West Sacramento.

        https://www.davisvanguard.org/wp-content/uploads/2021/12/Screen-Shot-2021-12-08-at-7.19.26-PM.png

        NOTE: This is my fifth comment today. I will make no more comments in this thread today.

        1. David Greenwald

          Matt – I think you are approaching this too much like a bean counter.

          There are two fundamental issues.

          One is that Davis has a huge barrier to entry.

          The second is less about housing cost inflation as a percentage of baseline and more about perceived advantages to homeowners gained from slow growth policies more than real or actual advantages of that premium. Which is why I think your criticism of Richard misses the mark.

        2. Matt Williams

          Clearly David you did not understand the points that Richard made, and that I was responding to.

          Richard’s argument (which he has made many times) is that the residents/homeowners of Davis have been given a substantial financial GIFT by the stater of California and its taxpayers, and that in return for that financial windfall the residents/homeowners of Davis have to pay for that free gift by giving up the local right of land use determination in exchange for the gift’s social, cultural and economic benefits.

          My response very clearly shows that there is no gift, and that each Davis resident/homeowner makes a substantial payment at the time they either purchase their home, or make their rent payments.

          Now, with respect to the first of your fundamental issues, that payment “as reflected in the large house price premium” that each resident/homeowner pays is indeed a huge barrier to entry.  But Richard is arguing that each Davis resident is getting substantial social, cultural and economic benefits in exchange for their payment.  In your proposed alternative reality, what compensation should be made for those social, cultural and economic benefits?

          With respect to your second fundamental issue, a closer look at the graph illuminates how much of a benefit/advantage that Davis “homeowners have gained from slow growth policies.”  The graph very clearly shows that average housing prices in all four of the selected “communities” have increased in value by very similar absolute amounts.

          In November 2015 the average home value in Davis was $591,000
          In California it was $450,000
          In Woodland it was $325,000
          In West Sacramento it was $307,000
          In Dixon it was $371,000

          In October 2021 the average home value in Davis was $842,000
          In California it was $722,000
          In Woodland it was $524,000
          In West Sacramento it was $506,000
          In Dixon it was $584,000

          The annual home value appreciation in Davis over the six-year period was $41,833
          In California it was $45,333
          In Woodland it was $33,167
          In West Sacramento it was $33,167
          In Dixon it was $35,500

          The annual percentage home value appreciation in Davis over the six-year period was 7.1%
          In California it was 10.1%
          In Woodland it was 10.2%
          In West Sacramento it was 10.8%
          In Dixon it was 9.6%

          You don’t have to be a bean counter to see that average home price increase in Davis (7.1%) over the six-year period increased more slowly than the average home price increase of all three of the close-by communities (all close to 10%) and/or the average home price increase of the state as a whole.  What does that tell you about the impact of slow growth policies on home price increases in Davis?

        3. Matt Williams

          Another fundamental flaw in Richard’s comments on this issue is that he has laid out what he sees as the moral imperative(s) regarding (1) the greater good of higher education, and the responsibilities that a host community has to provide student housing, and (2) our society’s wealth distribution disequilibrium.  However, he hasn’t laid out a workable solution to either of those issues.

          What he has laid out is for the local economy to build more student housing units to address (1) and to build more affordable housing units to address (2).  The problem is that there isn’t enough economic “muscle” in the local economy to accomplish both (1) and (2) simultaneously.  The recent experience in Davis of new student housing is that (A) very little of it is seen as “affordable” by the student community, and (B) it is not available to the non-student portion of the “housing crisis.”  The local Davis developer/builder community has only a limited economic ability to discount market rate units down to “affordable” units.  Further, the rest of the local community currently has even less economic ability to subsidize a discounting of market rate units down to “affordable” units.The local community budget starts each year with an excess of needed expenses over available revenues of between $10 million and $14 million.  Until the local community finds a way to come up with an additional $10 million plus, having spare change to put into subsidizing new “affordable” housing in the community is a pipe dream at best.

          There is a viable solution though, and it is a viable solution that affects all communities, not just Davis.  The State of California has both the financial where-with-all and a very close and direct identification with Richard’s moral imperative regarding the greater good of higher education.  I believe the State of California and its leadership needs to take a page from Bernie Sanders’ and Elizabeth Warren’s playbook and make substantial investment of millions of dollars in making higher education affordable for all.

          What Davis residents can do is to refocus their efforts from fighting with one another, and put pressure on Sacramento to actually step up with dollars and do something to address the cost of California higher education and subsidize building “affordable” housing for non-students.  The State used to invest in local communities via the Redevelopment Agency.  It needs to begin investing again.  That would be a solid solution to Richard’s two issues.

        4. Keith Y Echols

          One is that Davis has a huge barrier to entry.

          What’s the issue?  It simply is what it is and there’s not a lot (aside from a massive infrastructure build out) that can be done about.  And more to the point there should be a rational reason for it to be done.  I suppose you could tell the University to get lost and home prices might drop from $850K (Davis) to $520K (Woodland).

          The second is less about housing cost inflation as a percentage of baseline and more about perceived advantages to homeowners gained from slow growth policies more than real or actual advantages of that premium.

          Real estate for the most part is still a private asset.  It’s rational for people to protect their assets.  Come of up with solutions that benefit the community and provide housing for others.  Trumpeting a perceived moral high ground about a housing “crisis” isn’t going accomplish anything.  Rational discussion….NUMBERS…is what should prevail (cloaked in feel good political stuff for the unwashed masses).

  3. Ron Oertel

    But people forget that while existing homeowners may oppose these changes, there are a huge number of voters who are renters and being priced out in terms of both rental prices and out of homeownership, and that is what is driving housing the housing crisis.

    There is a simple solution for that, and places like San Francisco have implemented it.  In fact, it’s the law of the land to a lesser-degree throughout California.  (Rent control.)  Ask your friend Wiener why he isn’t pushing for that, more.

    I already know the reason:  The advocacy groups which create petitions like the one referenced in this article WANT growth, for their own reasons.  They are not a “housing rights” group. The same is true regarding the underlying industry support that Wiener and his YIMBY friends receive.

    Of course, many renters didn’t even have to pay rent, during most of the pandemic.  They also get free legal assistance in some areas, etc.

  4. Matt Williams

    As the Times put it: “Los Angeles is not a castle. Homeowners cannot pull up the drawbridge and order the hoi polloi to go somewhere else. The city and the county have to find a way to accommodate moderate growth in housing in all neighborhoods.”

    .
    My thoughts on the above quote are that the new law is actually self-limiting, and as such a huge part of the  news coverage is simply sensationalism.  I believe the media coverage is simply a variant on the old newspaper/television expression, “If it bleeds, it leads.” Reporting on outrage is much the same as reporting bloody accidents or shootings.

    If we focus on the headline of this Vanguard article, what people want in terms of housing is housing that is more affordable.  The cost of demolishing a residence (or multiple adjacent residences) in an existing neighborhood, and then constructing a duplex or triplex is not going to result in the resulting duplex or triplex or even quadplex units being particularly affordable.  As a result, I do not think we will see developers “storming the castle” either in Los Angeles or any other California city

    Moreover, we are in the middle of a housing crisis where many are priced out of the very neighborhoods that this law would impact.

    .
    I would take David’s statement a step further.  Many are priced out of housing in virtually all neighborhoods in California.  I believe the best way to address that problem is to build new neighborhoods where the housing is designed to be much more affordable.  That means smaller residences and fewer high end (feel good) features.  Table 7 on page 13 of the EPS financial analysis of the DiSC project indicates $699,000 as the projected sale price of the For-Sale residential homes.  Is a $700,000 home affordable?

    Table 7 also lists the projected average size of those residences as 1,800 square feet.  Is 1,800 square feet the right size for workforce housing that would “provide support for on-site activity” at DiSC?  I personally believe that residences in the range of 900-1,200 square feet is a better match to the young professionals in the workforce housing segment that are projected to be the bulk of the “on-site activity.”  How much more affordable than $699,000 do the residences become if they are 900-1,200 square feet rather than 1,800 square feet?

    1. Keith Y Echols

       Many are priced out of housing in virtually all neighborhoods in California.  I believe the best way to address that problem is to build new neighborhoods where the housing is designed to be much more affordable.  That means smaller residences and fewer high end (feel good) features.

      My question to you is what is “affordable”.  Subsidized affordable or just building lesser expensive market rate homes?  If it’s the latter than I ask you how much should CA plan to build?  Should they build to the point where home prices are significantly impacted?  I believe that last time that was done in the US was the post war Levitt Towns.  Those were fairly spartan/barebones starter homes primarily aimed at returning G.I.’s.  But that kind of build out would require a massive and costly built out of infrastructure.  How much should each community build out?  If we take the approach that we want people to have homes in our communities?  Why?  How many?  And why that number?

      1. Matt Williams

        Keith, both will be components of an overall effort to achieve more affordability.  There are challenges in operating a sustainable subsidized affordable program in the ownership market segment.  Subsidized affordable programs are a bit easier to administer in the rental market segment.

        With respect to building less expensive market rate homes, your questions are good ones.

        Ultimately the community should have a robust discussion about what makes a resilient and sustainable community. According to the US Census there were 15,607 jobs in the City of Davis. 18% of them (2,819 jobs) were in Food Service and Hospitality.  Another 18% (2,831 jobs) were in HealthCare and Social Assistance.  13% were in Educational Services (2,059 jobs) and 13% were in Retail (2,032 jobs).  That is 62% (9,741 jobs) of the jobs in the City that are in employment segments that for the most part do not pay large amounts of compensation.  I believe the city/community needs to decide whether it wants its Food Service, Hospitality, HealthCare, Social Assistance, Education, and Retail workers to have the opportunity to live in the community.  That question is essentially a community resilience and sustainability question.

        I believe your question “Should they build to the point where home prices are significantly impacted?” is self-regulating if the affordable housing achieves its affordable pricing by being smaller in size and less luxurious in its amenities.  If that is accomplished, then the market prices in the current inventory of Single Family Residences will not be affected by the market prices of the workforce housing in the 900 to 1,200 square foot market segment.  They will attract different potential buyers.

        NOTE: This is my third comment today. I will restrict myself to only two more comments in this thread today.

        1. Keith Y Echols

          is self-regulating if the affordable housing achieves its affordable pricing by being smaller in size and less luxurious in its amenities.  If that is accomplished, then the market prices in the current inventory of Single Family Residences will not be affected by the market prices of the workforce housing in the 900 to 1,200 square foot market segment.  They will attract different potential buyers.

          I’m not sure I follow this.  Smaller being more “affordable” is debatable.  A builder will only build if they can expect price appreciation.  So yes the units will be smaller and be priced less but the price per square foot will likely be the same relative to whatever else is on the market.  No builder is going to pump in enough units to food inventory and effect housing prices either neutrally or negatively.  So then once again a meager increase in supply that is likely overtaken by gentrification effects on pricing….even at this lower price point home…on a price per square foot basis.  Again, I don’t believe you can significantly impact home prices in most communities unless you seriously increase infrastructure….and most communities can’t or won’t do that.

           That question is essentially a community resilience and sustainability question.  

          This is an interesting psycho-social question as most communities do not primarily plan around these type of jobs.  Part of that is due to the transitory nature of many of the employees in food and retail jobs.  Yes there are some long term employees in those jobs.  Maybe an interesting question would be to figure out about what percentage of those exist and maybe plan accordingly?  I don’t know, I’m spitballing here.

        2. Matt Williams

          Keith, I’m using a very simplistic definition of “affordable” … a purchase price of $499,000 is more affordable than a purchase price of $699,000.  I agree with you that a substantial proportion of builders will be less attracted to building $499,000 sale price homes than $699,000 sale price homes, but I don’t think there will be no interest.

          I don’t understand your comment “Smaller being more “affordable” is debatable.”  Are you saying that a 900 square foot house will sell for the same price as a 1,500 square foot house?  … or an 1,800 square foot house?

          You and I agree completely that building a supply of 900 -1,200 square foot workforce housing residences to address the housing needs of some portion of ddcthe 9,741 people with lower income jobs in the City that are in the Food Service, Hospitality, HealthCare, Social Assistance, Education, and Retail industries will not affect the market prices of the 2,000 plus square foot homes that currently dominate the SFR landscape/inventory/marketplace in Davis.

          Regarding your final paragraph, here too we are in agreement that many of those jobs (most?) are transitory in nature, so I agree that an interesting question would be to figure out about what percentage of those exist and plan accordingly.

          NOTE: This is my fourth comment today. I will restrict myself to only one more comment in this thread today.

        3. Richard_McCann

          You and I agree completely that building a supply of 900 -1,200 square foot workforce housing residences to address the housing needs of some portion of ddcthe 9,741 people with lower income jobs in the City that are in the Food Service, Hospitality, HealthCare, Social Assistance, Education, and Retail industries will not affect the market prices of the 2,000 plus square foot homes that currently dominate the SFR landscape/inventory/marketplace in Davis.

          That’s not a true statement. It’s very well documented that raising the minimum wage increases the wages and salaries of middle income households. This also works the same way in the housing market. The prices at the very top of the market (of which there is very little in Davis, but quite significant in SF and LA) probably won’t be impacted, but those are the multi million dollar homes.

        4. Keith Y Echols

          I don’t understand your comment “Smaller being more “affordable” is debatable.”  Are you saying that a 900 square foot house will sell for the same price as a 1,500 square foot house?  … or an 1,800 square foot house?

          No.  But the price per square foot will be the same or more and likely more than comparable larger homes.  That effect will serve to ultimately drive up home prices above and below it’s price point.   The first thing a seller is going to do is look at comps, including price per square foot comps in that same price range….which would be something like new 900 sqft attached housing and how affects an existing 1200 sqft.  duplex.  Which then will affect existing 1500 sqft duplexes and detached housing…on and on and so forth.

        5. Matt Williams

          Keith, I suspect we are making much the same point, just saying it differently.  When I said,

          I believe your question “Should they build to the point where home prices are significantly impacted?” is self-regulating if the affordable housing achieves its affordable pricing by being smaller in size and less luxurious in its amenities.  If that is accomplished, then the market prices in the current inventory of Single Family Residences will not be affected by the market prices of the workforce housing in the 900 to 1,200 square foot market segment.  They will attract different potential buyers.

          the effect I was referring to was to any downward effect on the prices of the current SFR inventory.  At the risk of repeating myself, regardless of price per square foot considerations, I believe the market for a 900-1,200 square foot SFR is distinct and separate from the market for 2,200 square foot (and up) SFRs.  I would be surprised if one out of ten of the buyers of Davis homes over the last 20 years gave any consideration to price per square foot.  Builders and real estate professionals care about price per square foot, but soccer moms and UCD professors and State of California employees who make the daily slog across the Yolo Causeway care about the characteristics and amenities of a SFR that are going to affect the quality of their lives and the lives of their children.

          What I hear you saying in your 5:59pm comment is that the dollars per square foot calculation for new 900-1,200 square foot homes will produce some upward effect on the prices of the larger homes … but it certainly won’t be a downward effect.  If that is what you are indeed saying, then we are saying effectively the same thing.

          A person or family whose #1 priority is how “affordable” a SFR is … whether it will fit into their very tight budget … will pay attention to the total price, not the price per square foot.

           

  5. Bill Marshall

    The way I look at “payment” is what the city negotiates as condition for approval with the builder. 

    I appear to have misunderstood your use of the term “compensation” as being above and beyond ‘mitigation’… ideally, a zero-sum, ‘no harm, no foul’ process… the only honest way to “negotiate” a condition of approval is via a development agreement… theoretically, if both parties are cognizant/aware, that should be a zero sum game, if both parties are acting in their clients’ interests… not always the case…

    I do not believe in ‘coercion’, or ‘blackmail’ as it relates development entitlements… many others do.  I stupidly (admission) believe it should be governed by publicly adopted rules, ordinances, not ‘negotiations’.  And that even if negotiations are used, they should be fully disclosed to both parties and their current/future clients.

    Yeah, I’m just weird.

    I do not believe “net positive gain” should be the litmus test for approvals. I also believe that a community does not have to accept a significant loss without a conscious well supported decision to do so.

    Said my piece.

  6. Bill Marshall

    It’s very well documented that raising the minimum wage increases the wages and salaries of middle income households.

    Not proportionally…
    This also works the same way in the housing market.

    It’s very well documented that raising the minimum wage increases the inflation rate. This also works the same way in the housing market, that is significantly inflation-based.  Raising the minimum wage is not a panacea to income or wealth “inequity”… as you have posited, if everyone’s “boat floats”, market principles trend towards inflation (now running at near-decade high).  It may be a ‘tool in the toolbox’, but it is NOT a solution… except to the adage, “for every solution, there is a problem”… 

    Inflation is becoming real for everyone except the rich.   Some are protected… proposed CA legislation/ballot (initiative)[Sanberg, reported in today’s Bee] measure could protect the minimum  wage against inflation… SS recipients already have ‘inflation protection’… but that is based on national inflation… pension folk (yes, there are still some of us), are not protected from either State or national inflation, except to maybe 2-3% level (or 0%)… inflation is currently running @ ~  7% nationally… might be higher in CA… housing, particularly for-sale housing might go higher or lower than 7%, depending on other factors…

    A HS kid taking orders at a fast food place having the same minimum wage as a family provider working 8/40 at physical labor in construction/other?  Really?

    I support the increases in minimum wage as appropriate to effort expended

    But everyone should have open eyes… inflationary pressures due to more money in the economy, which realistically increases inflation… something about a dog chasing its tail…

    I have no definitive answers… but there are a few other adages:  “be careful what you wish for”, “beware of unintended consequences”, “TNSTAAFL”…

    I like the idea of linking minimum wage for full-time ‘bread-winners’, despite the risks (of inflation)… but it will not ‘solve’ either the housing or ‘home-ownership’ thingy.

  7. Bill Marshall

    I’ll try to simply this… what people want, in terms of housing, is that they own it, will profit by it (tax deductions etc., if they have to pay for those, profits on sale)[and build ‘wealth ‘for’ their families], and it will meet every parameter:  size, yards, proximity to work, good schools, comfort/energy efficiency, prestige/sense of worth, affordable irrespective of my income, perfect community with all amenities, etc., etc.

    That’s what people want, in terms of housing…

    And folk in Hell want ice water… noble goals, to be sure… realistic, or an imperative for a “just” society?

    Each of us need to think about that question.  I have no answer, after thinking about it long and hard.

    From “The King and I”… “it is a puzzlement”…we can make steps towards reaching those ‘wants’… I tend to focus on ‘needs’…

    But many would call me a “white man of privilege…

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