Supply and Demand in California
I came across the following graph:
Both the supply curve for labor in the state of California and the demand curve for housing in California are made up of the states residents.
In general, if you increase the supply of something, all else being equal you bring down its price. On the other hand, if you increase the demand for something, all else being equal you increase its price. The graph above suggests that in California, two things have happened. One is that the supply of labor has increased more rapidly than its demand. Conversely, the demand for housing has increased more rapidly than its supply.
Regards the relation of housing rents (housing prices in general… rents just reflect the housing price increases) to the change in income, your analysis is substantially incorrect.
The housing price (rents price) increases have occurred because of the extreme shortage of housing supply, which hasn’t responded to the increase in employment. It hasn’t responded because the price of land nearer the employment centers increased due to increasing demand by business and residents for housing nearer the places of employment..
There’s very little available land but that which there completes for business use or residential use. Business use increases city revenues at lower costs of maintaining city services than the same land provides for use as residential land.
Thus city fathers normally will opt to use the land for business (another begger thy neighbor policy) to attract more employment and thus receive more business revenues and license fees as weall as more sales taxes from purchases of goods in the city by new employees working in the city… restaurants, drinking establishments, causual shopping, taxi use, parking fees, etc. therefore the city receives business based income without having to increase city services … this also provides existing city residents with more services or lower taxes for the same services so generally and specifically speaking this is NIMBYism based housing price increases.
If you move from the major employment centers (SF Bay Area, LA Metro Area, Sacramento Stockton, and San Diego) to lower housing price area’s surrounding them, you commute much further and all in highly conjested freeways so that not only is your round-trip now 50 or 100 or more miles a day, itt takes twice as long as it would during non-commute hours (5 am – 9 am. and 3 pm to 7 pm) This is not a joke.
12 lane freeways don’t solve it. High Speed Lanes (HOV lanes 2 or more people or 3 or more people per vehicle allowed or by paying a toll per mile traveled in the HOV lanes) don’t fix it either. CA doesn’t have much of an extensive or location convenient mass transit system (such as NYC and Chicago for example) so private vehicles normally with 1 person / vehicle is the nearly only means of getting to and from work.
This brings up why we don’t have more highrise and multiple dwelling higher density housing. This brings us right back to NIMBYism… city fathers (city council and majors) who make the rules and have zoning authority have to comply with local residents wishes to be re-elected and funded for elections and that comes from those who are already home-owners and renters in the city.. not the employed people who live in the next town 5 miles away, or 10, or 20 or have to move 50 miles away to afford rent or ownership.
I live 36 miles from the new Apple complex in Sunnyvale which is right next to the Sunnyvale/Santa Clara city boundary. In non-commute time at 80 mph for much of the journey it takes me 34 minutes. The same commute starting from an hour before “commute time” to an hour after the end of “commute time” takes me 1.25 hours. I’ve had to do this for a few weeks so I know in absolute terms what it takes to the minute… and it’s miraculously constant (unless there’s been an accident or a truck spills something). day after day, except Fridays when commute traffic is less because our major employers allow many people to “work from home” on Fridays. Monday’s are however far worse, because many more people are commuting from much further away and they rent a room or a hotel for Monday-Thursday instead of commuting long distances (100 – 150 miles one way for example).
Another problem is that most of the existing housing was constructed during the 1970’s and 1980’s and prices then were normal….. so middle class owners bought … a very high proportion of those homes (large, with large lot sizes front and back) are bought and paid for and their now elder or retired folks live there … why move? Why sell even at extremely high profits ($1 million and more for a 1800 sq ft, 3 bdrm 1.5 bath 1970’s style home) which might have cost $30k in the 1970’s. Two years ago a widower who had purchased a 1000 sq ft home on a then normal sized large lot in a then new Palo Alto neighborhood in 1950, finally decided to sell.. for $2 million, and his asking price was $1.25 million.. it was bid up by demand for that location and that lot size… the house itself was nearly worthless…livable, but far from standards today.
I’ve known a contractor friend of mine who 20 yeas ago started doing few re-models in Palo Alto, .. a long commute for him but he needed he work. His reputation by word of mouth from home-owns in PA increased (very high quality work at fair price) and shortly all his business was in PA tearing down old houses and building new mansions on the large lots.
What I’m saying is that your analysis of CA’s rental pricing issue is out to lunch. It’s a general issue in housing prices for rent or sale in all of CA’s metro area’s and outlying suburbs up to 40 and more miles away.
CA has lots of land… huge swaths of it.. only it’s so far away from employment centers that people can’t afford to rent or buy and commute that far.. some do, but most can’t get up at 4 am to get to work by 8 am. and then get home again after 9 pm. if they can afford to commute that far daily then they can probably afford to rent a single bed room near work for workdays considering total costs of vehicle ownership.
Relative over time:
In the 1960’s and 1970’s I could drive from downtown SJ to Oakland in Piedmont (up the hill from downtown Oakland) in 45 minits in a VW bug at any time of the day or nite on what was then the Nitmitz Feeway (now Interstate 880) Nimitz had 2 very bumpy lands in each direction Intestate 880 is now about 10 – 12 lands (5 – 6 in each direction).
There were a few towns along the way but most were well east of the freeway.. a mile or two to the east. Between those towns was all agricultural land plus one Ford Asm plant nearer the Freeway (on the East of it).. the SF bay wetlands was on the West side.
Now there’s nary a spot where large technology businesses with high rises exist or large shopping centers or direct residential neighborhoods exist along the freeway.. on both sides of it now for the entire distance.
and all the way east into the foothills bounding the valley on the east… say 5-6 miles east of the freeway. Over the hills the next large valley which used to have some tiny farm towns with nothing else but grazing land with cattle, is now fully loaded with housing, technology business’s, huge shopping centers and it’s got a 2 – 6 land freeway in both directions.. most of it now 5 lanes in each direction. It took me 2.5 hours to go from my house to my brother’s in Walnut Creek on a Friday starting at 11 am…. a trip which normally took 45 minutes. Why so much traffic and no accidents? I still don’t know, but a friend said he drove over the hill to Walnut Creek a week later during mid-week non-commute time and he said it took him 1.75 hours for the same trip and he lives 20 minutes closer than I do. What”s the reason?
Well it turns out that the high prices in Santa Clara Valley (aka Silicon Valley) are forcing people to move over he hill for lower rents and housing purchases because they’re being forced out by rents going up to meet higher demand for housing with more employment demand in our Valley… which increases commute traffic over the hill and all the way to Pleasanton/ Walnut Creek/Concord and beyond. Use a Google Map of the area to make this clearer for distances and routes..
My daughter and husband are both highly paid professional employees in the Valley.. they can’t afford to purchase a home here anymore… so they rent.. and pay $4500 / month in Mountain View for a Single Family Dwelling house built in the 1960’s.. 3 small bedrooms, 1.5 baths… small back-yard, two car Garage add-on which apparently replace then original carport.
For comparison I own a rental in my town about 40 miles from where they live.. south of San Jose. It’s nearly 1900 sq ft, large 3 bedrooms, large master bedroom 2 bath, large back-yard dnd front, large two car garage near a elementary school, 2 miles from the freeway on a quite street in a high middle income neighborhood built in 1975 with well-built homes (which sold at high end prices in 1975-76. I rent at competiive prices or a tad less to minimize turnover incentives and have to make sure my rental price is below the price for purchasing and a mortgage at 20% down payments to have quality renters otherwise they’ed just as well buy a house or I’d have more turnover as hey saved to make the down payment on a purchase. I charge $3k/month and had 20 people apply to rent it in July in 4 days.. 7 of them in the first two hours after I put it on Craigslist (the only place I advertised). People are desperate for housing at affordable prices. This is 35 – 40 minutes in non-commute times to Apple or Google or other major employers in the Valley. The new renter I chose commutes to Redwood City… ~ 40 miles toward SF on State Highway (Freeway… 8 – 12 lanes) 101. In Redwood City a comparable house rents for $5k… it’s closer to SF. My last renter interestingly enough moved to our town from Redwood City because the nice apt they were living in upped the rent so they moved 40 miles south to get a house that they could afford…. one of the residents worked in SF downtown…. 3 – 4 days a week. Go figure. They lived in my rental for 5 years and moved yet another 20 miles further south to afford rent because one of them lost their job and couldn’t find a new and equivalent paying job.
Employment demand increases, land prices increase with increased demand for housing, houses get built on smaller and smaller lots to stay affordable, but if you do the geometric relationship to land available by distance from a center you find that as employment increases the land prices closest to the center (which is also less land therefore demand per available acre is far higher) increase by huge amounts for nominal increases in employment in the region… this forces existing renters out and to move further from the center but they then compete for that land / housing with the new employment persons entering the area so it drives land prices up further from away as well, etc. the further out you go… then add commuting routes or lack thereof and you begin to understand that it’s the scarcity of land that drives rents and NIMBYism which prevents higher density housing. And even freeway expansions are hard to come by since eminent domain has to pay far more for to purchase rights of way which costs more in taxes one way or the other the closer the highway expansions are to the center.. which is where they need to be the widest with the most on and off ramps… thus costing even more.
You’re an economist. Supply / Demand .. land doesn’t increase in supply at a given distance from employment centers. If you don’t build “up” for higher use density on the limited land, you have to build “out”… which means more freeways and wider ones and longer commutes and gas consumption and more congested slower commutes… and less free time.
Maybe the SF Bay area will end up some day like Detroit is now, but we have four major Universities within a 60 mile span of one another… UC Berkeley, Stanford, Santa Clara University and San Jose State University… and UC Davis is just 100 miles from the Bay Area.
These fuel qualified employee demand as well as start-ups some of which turn into Googles’ and Applies and Western Digitals, and Fairchilds which become Intels. etc. Those become Netflixes, and Oracles, and Amazon Research, and Tesla’s (which is fundamentally just a fancy computer on wheels using electrical energy.
Business’s thrive on one another’s idea’s or new idea’s and employees with expertise and experience easily changing employers (for the right price) without having to move (or at least not from outside the region).. And those draw more people seeking their fotune in the denseness of high tech and computer and electronics technology and that draws the supporting casts of machine shops, retailers, restaurants, hotels, car dealers, which draw the general employment demand and thus larger employment overall.
We also have three major international Airports … SFO, Oakland, and SJO… each of which have flights non-stop flights to Europe (London, Frankfurt at least), Japan, and Hong Kong and now I think also Shanghai. And we can’t forget SF bay as a major west coast port, which arguably built CA in the first place.
Since I came here in mid 1960’s, the Valley has morphed from a fruit orchard, to scientific instruments (Bechtel, HP), to semi-conductors, to computers and disk drives, to communications devices and interconnects, to software services and development (eg. programing).. and perhaps now it may be morphing to self-driving computers.
That over a 50 year period to date and it’s just gotten bigger and bigger as it’s morphed from one to the next. One might say it’s got huge diversity of experiences in technologies most of the globe depends on now and perhaps some that will fuel the next wave of global necessities.
So high end employment demand in a variety of related technologies that build on one another and thus change the dominant one to the next dominant one almost as if by “an invisible hand” without even trying has driven land prices out of site, thus housing prices with them without a corresponding increase in general wages and salaries to keep pace.
So I can’t see any parallels yet to Detroit’s growth and death and Silicon Valley’s growth… death yet to be determined. Unlike Detroit Silicon Valley keeps inventing new stuff out of the old or shall I say extending the old into new stuff, instead of just making bigger, faster, more energy consuming, less efficient things people need.
Indeed Silicon Valley has done the opposite.. making smaller, faster, less energy consuming, more efficient things people didn’t even know they needed, but now can’t do without.. something like indoor toilettes and plumbing perhaps. Fruit Orchards in the 1960’s to “smart phones” and Search Engines, and Tesla’s today. Go figure.
But as an economist you knew all this already. I find it strange then that you didn’t mention any of the basic economic relationships causing the high housing prices in your note though.
Its a tragedy that we don’t have a more socially beneficial attitude in the U.S… otherwise we’d have built more “up” than “out” and had the best and most widely used mass transit systems on the globe. Maybe we should blame fossil fuel companies and Ike for the interstates instead of mass transit promotion, or GM and Ford for extending old tech far further than has been socially beneficial..
“lands” = lanes.:
Did some one change your meds? Slow down there and let people digest one comment at a time.
I will add one thing. NIMBYism isn’t the problem. The article I cited also shows added population per new permit since 2000.
I live in Long Beach, which is near the top of the list. Many of the homes in my neighborhood (and most in some blocks) rent out converted garages. We are getting a permit to get work done to do the same. If this is what jurisdictions with more population than pop growth look like, the end state will look pretty dystopian.
Top of the list (i.e., highest added population per new permit) is Torrance. I live less than fifteen miles from Torrance. If they had more permits we’d hear more about social justice and how poor people are forced to live next to the refinery since that is where the empty space seems to be from what I can tell having driven through a number of times.
But even without us running hell bent toward dystopia, petty crimes like burglary increase and traffic is notably worse every decade. Don’t even comment on the schools down here.
The solution is one that we used to talk about, but apparently is too un-PC to talk about the carrying capacity of a plot of ground or overpopulation any more, much less the notion of parental responsibility and only having as many kids as one could afford to raise.
The impact of supply and demand on housing costs is drastically skewed by Proposition 13. The visible cost to long time owners is far lower than to new owners or to renters.
Maybe you should be reading the various and multiple academic analy8s of CA’s reasons for it’s housing shortage and land prices related to Nimbyism’s effects. I leave it to you do your homework more diligently than you seem to ever do in fact.
I agree though that more and more city councils are revising zoning laws to allow construction of “in-law” quarters on existing single family dwelling lots. This only barely cuts the surface though, as I’m sure you’re aware, as well as worsens living conditions relative the real alternatives which is better and higher density residential land use for normal housing… building “up” rather than “out” and zoning more for than business uses on remaining available land or reuse of land.
People have all the time they want to spend to digest information they are provided … that’s the whole advantage of non-volatile written language.
Yes and no. Prop 13 allows purchasers to remain in their homes at affordable costs…Prior to prop 13, taxes would have and did in fact force them out and to move to lower cost housing further and further from where they lived in the suburbs.. like to rural farm communities at the extreme or out of state. That wouldn’t change anything though since those further out locations then become equally subject to increasing property taxes by increasing population and influxes of new employment as has persisted in CA for a century already.
In CA as you must know property taxes are based on assessed valuations and those assessments are based on annual market value.
Thus increasing demand for housing nearer employment centers continues to sky as employment and influxes increase. Prop 13 just capped the rate by which property taxes could increase unless and until you sold and bought another home.. .and so the purchase price of the new home reset your property taxes again back to the level of present market values.
All new influxes of employment to CA or to any region of CA whether moving from within other area’s of CA or not just resets the property taxes to those new entrants to reflect the present market values.
Prop 13’s only effect is thus that people who have remaind in their home a long time aren’t forced to sell due to inability to afford where they’ve lived due to property tax increases over time which are due solely to increased demand relative to supply of housing.
The other thing it did, however, is also limit property taxes increases on commercial property which is presently in CA a major legislative issue since those property’s are “for profit”, not non-profit residential use.
So the real problem remains independent of prop. 13 (unless you want to force retirees out of their homes to move to lower priced digs and locations) — to wit: residential land use zoning limits residential housing density … and that’s each little burg’s own decision via city councils… which as I’ve already explained is a politically based decision.to remain elected… hence NIMBYism rules.
Countless academic studies in the past in CA have identified this fundamental cause — for housing, for state and county rights of way via eminent domain for mass transit and highway building and expansions precisely where they are needed most — closer to employment centers.
Contrary to Mr. Kimel’s claim that “in-law” quarters building permits and permissions are increasing in some cities this isn’t doing much to resolve the problem at all and most jurisdictions have rabid public outcry’s when the the city councils are debating whether to allow multiple story apt buildings in what have been traditionally been used as single family dwelling zones. Law suits by existing property owners on both sides of the issue then do battle in court.. which takes years to resolve… meanwhile, status quo remains in effect.
Mr. Kimel knows this all quite well since he lives in CA. And since he’s from Torrence he also knows very well that building more 12 and 14 lane freeways don’t fix the problems.
For ref. in 1964 I worked for a few weeks in Orange County (construction one summer) but lived in Pico Rivera. It took me maybe 30 minutes to get to where I worked in multiple cities all over Orange County more or less during commute hours. I drove the roughly same routes recently (2 years ago) over several days… now it takes an hour on 10 lane and12 lane freeways during commute times (which are far longer in duration in SoCal than in NorCal though NorCal is fast catching up with SoCal)
Just BTW, my commute from Pico Rivera to Orange County in 1964 was on what was referred to then as THE Santa Ana Freeway… now officially Interstate 5., or in NorCal terms just “I5″….. Mr. Kimel will understand my emphasis..
Also BTW, I lived my current residence already when prop 13 became effective. In 1982 I bought at rental about 2 miles from my residence .. same burg, same area… and Prop 13 was in effect…. not to mention that the rental isn’t my residence..
So I’ve been acutely and intimately aware of the relationship of Prop 13’s effect vis-à-vis for property’s that get the prop 13 break and those that don’t. since 1982…. while property values have soured.
For a guy who tells other people to do homework, its surprising that you pay so little attention that you don’t absorb any information.
1. I said nothing about being from Torrance, unless 12.5 miles = from
2. I said nothing about Long Beach just now starting to offer permits. I said the neighborhood I live in is full of dwellings over the garage. My house is in the minority, and we are applying for a permit too. Note that we have owned this house for less than a year.
3. I imagine if you’ve lived in your home for long enough, there’s an opportunity for you to also put together a housing unit above your garage. Be part of the solution, right?
With respect to your statement:
“The solution is one that we used to talk about, but apparently is too un-PC to talk about the carrying capacity of a plot of ground or overpopulation any more, much less the notion of parental responsibility and only having as many kids as one could afford to raise.”
I’m a liberal,prety much well left of center. The “we used to take about” you’re referring to related to carrying capacity and overpopulation only came up among liberals in the contexts of::
1. China’s one child policy mandate which was felt to be probably good for China’ for a llmited time for obvious reasons, though the ratio of males to females issue (infanticides) was universally though to be unacceptable in our society.
2. The US didn’t[ have anywhere near what might be remotely considered an “over-population problem” or limited land carrying capacity — which refers agricultural output per capital … since CA was then the largest agricultural output and export region nearly on the entire globe .. and by leaps and bounds in the US.
So the “we” you refer to as PC correctness might be related to what conservatives talked about… it certainly wasn’t consider to be PC incorrect or verboten to among liberals.
On parental responsibility the PC issue among conservatives was just as you describe. (aka “its their own fault”).. but liberals took the other view… people are people and baby’s will be produced no matter what but that offering the pill freely to all females starting at their adolescent onset of being able to become pregnant was a potential mitigation to prevent unwanted pregnancy as well as abortion being legalized. liberal hooted and hollered that religious moralism’s were what prevented widespread free dispensing of the pill. It’s still that way, btw.
Regards having more kids than one could afford we liberals recalled that just one generation before our own, 4 – 10 kids per parental pair were common place and the norm… both my mother and father were each one of 7 siblings (that survived pregnancy)…. one parent was part of a rural farming family (whose parents were both Swedish immigrants), and the other parent was from a suburban family in Oakland and SF.after their first child was born.
By my generation the numbers were down to 2 and 3 kids. already so “parental responsibility” wasn’t deemed a liberal issue. It was and remains an often brought up issue by conservatives however, and almost always if not every single time related to Hispanics and Blacks having “more kids than they can support”… along with abandoned family’s by “irresponsible black males”… most of whom get incarcerated and on release have a criminal record which limits their employment opportunities even more… rather than voluntarily “abandoning the mother and child”… whether married or not.
So your phrasing doesn’t sound like a liberal taking at all.
At one point, the Sierra Club had published Paul Ehrlich’s Population Bomb, and had come in favor of severely limiting immigration. Planned Parenthood had convened a committee on population control, and they had the pull to get two former Presidents (Truman and Ike) to serve on it. Speaking of Presidents, Jimmy Carter commissioned the Global 2000 Report to the President which looked at overpopulation issues. And not just abroad either. William Hassett wrote about how FDR viewed Puerto Rico as overpopulated.
Martin Luther King talked about overpopulation. So did Gloria Steinem. The Port Huron statement discusses overpopulation. If you don’t remember overpopulation being a liberal issue, its because you don’t remember, not because it wasn’t a liberal issue.
And yet our population occupies 5% of the US land mass. And those taker legal-and-illegal-immigrants? Trump Administration Rejects Study Showing Positive Impact of Refugees to the tune of a net + $63 billion over the past decade.
In Boston, I lived in a 24 story apartment building. In Santa Clara, I lived in a 1200 sq ft house that is now worth (according to Zillow) $1.2M. My retired neighbors would have cashed out and moved if they were required to pay the same taxes I was paying.
The solution is to build up. Why do Californians not do so? Nimbyism is certainly the reason, but Prop 13 helps make it possible. Probably not the largest factor, but it certainly skews supply and demand – the title of the post.
With respect to your question:
“The solution is to build up. Why do Californians not do so?”
I’ve lived in CA most of my entire life and my father and grandparents on his side and all my uncles, aunts and cousins, ditto.
I have been asking that same question for decades and don’t have a clear answer either.
The best I can come up with it’s just our “tradition” which may be due to the fact that real estate developers in CA have always (from well before WWII) made far more profit on using land for Single Family dwellings than for apt buildings — and that means capital owners have huge influence with city councils that zone the land.
That in turn pleases the buying public in the sense that they want a house with a big back yard and don’t have to be stuck with hearing their neighbors above them and in adjacent apartments through the walls and cielings.
But I also lived in Germany in apts and they’re built differently for 4 – 6 unit apt’s so that they offer nearly just as much privacy and sound proofing. Even in the 6 – 8 story units the apts are spacious and parks across the street on behind the apt building are actually for nice than most people’s back yards, with public parks crews keeping them nicer as well.
So we here n CA don’t generally build those kinds of apt buildings.. and I’d guess it’s because they can get away with cheaper buildings without reducing demand as long as city councils don’t force them to build a lot of apt buildings.
Your right that I don’t remember the times of Ike or Truman being at that time < 10 yeas old to not being born — 'til 1945 or any references they made to population growth issues… but both were conservatives so that might have something to do with it also..
As to the Population Bomb, I was in College at the time this came out, in the bio and chem sciences and there was no concerns about being able to feed the increasing global population from any realistic perspectives. At that time the US was almost giving away corn and wheat to the poorest nations from the large excess production on the market to keep the US farmers in the mid-west happy.. and there was far more capacity to produce than we were producing then. It wasn't about oil use, but about food crop shortages and in reality poor farming practices used in most of the globe. The book was hyped for the dumb mass market . And my recollection among the liberal friends we had in those times was that it was another Malthusian over reaction with no real merit.. the solution wasn't population control as advocated for India and China in the book but using agricultural land more efficiently.
so you're wrong that liberals thought there was a population issue that would cause massive starvation if not curtailed. I'm guessing you weren't a liberal at that time.. or that you['re pulling this out of some other source than what liberals were saying. Oh, right, the book was promoted and suggested by the liberal camp of the Sierra Club. But interestingly Erlich.. the author, was suggesting ultra conservative solutions to the problem.. those like mandatory sterilization of males, etc. Far from a liberal point of view at the time because that same solution was being proposed to be applied to black males to limit Black populaiton growth and poverty. Wrong solution for poverty of Blacks which wasn't then nor now a problem with having too many kids. .
The only thing I ever heard Gloria Steinem mention on population control was advocating free birth control, condoms, and abortions. Those are indeed liberal positions, but it wasn't for population control she advocated these things as you ought to know.
As for Martin Luther King I don't recall him discussing population control or if he did it wasn't a significant aspect of his advocacies and he certainy isn't known for that among liberals.
I get the distinct impression you weren't old enough in the 60's to be know what liberals were thinking a the time. I was in high school and college in the '60's and very much aware of liberal positions and advocacies all the time… but also just as aware of the conservtive ones to which I was of course vehemently opposed… things like Reagan, racism, religious opposition to legalizing abortions … then illegal n the US, limiting birth control dispensing .. "prescriptions required with adult permision only"…. stuff like that and others. Not much has changed though since then has it?.
what I meant by ” Not much has changed though since then has it?.” is that consevatives are still advocating the same things they were in the 1960’s..
My, so many conservatives that I didn’t know about. I’m guessing in your world a big part of the reason that so many arch-conservatives like Tom Hayden and Jane Fonda were concerned about overpopulation was because the UN put so much effort into it, and we all know how fanatically favorable to the UN the conservatives are. There was still resistance on the right in the US, but when the Dalai Lama talked about how to solve overpopulation, the rest of the conservatives fell into line.
Meanwhile, far left organizations such as Opus Dei and fellow travelers from Franco to Pinochet… you know, this sentence is so ridiculous I can’t even finish it.
First , go back to your other list and start with Steinem and King to show and document their concerns with over population… provide links.
Next, take your most recent list (Tom Hayden and Jane Fonda) and do likewise. Both liberals had a plethora of liberal causes they promoted, but overpopulation wasn’t one of them that had any credibility as I already said.
There is a scientific concern with the Earth’s rate of population growth and at what point global carrying capacity will limit it, but I wouldn’t put this under the auspices of “liberal” or “conservative” although you seem to do so.
Everything that science is concerned with or shall I say science shows is occurring (population growth rates, anthropomorphic global warming) can become a politically charged issue since conservatives and liberals have different priorities and opinions of what they consider fair and just.
For some reason you picked on the global population growth issues raised in the 50’s and ’60’s which was deemed to a “problem” due to insufficient ability of earth’s resources to provide enough food and resources to keep all those people alive. Science didn’t deem it to be a problem since the problem was just a political and economic one due to political decisions…. so it was politicized for the same reasons climate change has become politicized.. liberals were concerned with human starvation and mal-nutrition effects while conservatives were concerned with the effects on their pocket books and mandates which might occur by gov’t decisions .. .e.g. political decisions.
If you think liberals were off base in their concerns that’s one thing. If you think liberals were not being informed by science that’s another thing entirely.
The political issues at that time were how to allocate economic resources and potential gov’t mandates … those were he political issues related to liberal and conservative arguments, both sides of which were reacting to Malthusian beliefs without a shred of science to back them up. And that was only because nearly only because of Erlich’s “the sky is falling” book.
I suppose it’s like “anthropomorphic induced global warming” though. The liberal and conservatives view on it differ in reality by one group believing in science and thus willing to take actions to mitigate and prevent as much as possible, and the other saying they don’t believe in science (at least climate science) and scared to death that science will force political opinion to take away their fossil fuel based sources of income and increase taxes on the wealthy to mitigate the effects of warming or prevent it from occurring.
Then you’ve place the UN in “liberal” / “conservative” space which you deem to be “liberal” as opposed to “conservative” I suppose that’s because you know conservatives in the US are opposed to the UN having any say in how the US conducts itself or that conservatives in the US are generally opposed to any democratic body they don’t control.
So none of the “liberals” you mention were known for their emphasis and liberalism in the context of global population growth issues in politics, nor where they the genesis or leaders of that concern. And none were concerned about US population issues — we had farm far more than enough carrying capacity in every respect.
And why do you think the UN’s information on global population growth and unknown rates of growth in the next 50 years… widely divergent estimates show “high, nominal, and low” growth rates which depend more on global politics and unknown effects n the future .. pandemics, climate change effects on draughts and human migrations, wars, etc.
And then we can say there are “liberals” and there are “liberals” .. in different degrees just as we have the difference in degrees of conservatives. Those furthest from center on either side are rarely what I would call the least bit rational or even honest.. both extremes border on or lead to anarchy.
Conservatives try to paint any liberal as an extremist and liberals try to paint any Conservative as extremist depending on just how much they are afraid the other will affect / sway public opinion which opposes their own positions or ideologies, which is in reality just propaganda warfare political methods.
And just for the record you’re the one that has alleged the issues with housing prices in CA related to ” too PC correctness” and excessive population growth due to having too many kids or some other such absolute bullshit as the problem.
There’s no population growth problem in the US and if anything the issue is too little growth. The CA housing price issue is that the influx of employment from other regions has occurred without responding to housing needs to support them, as I originally stated to correct your mistaken analysis of the problem which I showed is actually NIMBYism and local city politics that results from NIMBYism.
Ref: your comment to me: Sept 19:, 8:32
“,The solution is one that we used to talk about, but apparently is too un-PC to talk about the carrying capacity of a plot of ground or overpopulation any more, much less the notion of parental responsibility and only having as many kids as one could afford to raise.”.
So you’re way out to lunch on the topic Mr. Kimel. and have no longer made any comments relevant to the to the topic.
If you want to debate liberal positions and population growth v conservative ones, by all means just post a topic that does this and I’ll gladly participate in the discussion/ comments.
Just one last comment from me on the housing shortage causes in CA.
I’ve stated at length previously the fundamental cause if local city (little burgs) councils land use decisions which relate heavily to revenues the city receives from land use and subsequent outlays to support it after occupancy/ use.: Those decisions are part of the NIMBYism, since existing owners also don’t want more crowded conditionsk, more congestion, less parking spaces, and of course increased supplies of housing since that drives down their own home values (and rental income for landlords).
In the same link for which Mr. Kjmel obtained the illustrative graphic he selected (among many others that woud have shed actual light on the problem… e.g. it’s a land price issue .. not construction costs, for example, this graphic (open link) and explanation relevant to my statement that city councils NIMBism dominantes the reason for lack of housing:
“The Bay Area suburb of Cupertino is deciding what type of development to approve on a 8.1-acre site. One option means far more revenue for the city.
If Cupertino built 605 residential units and 67 below-market-rate apartments, the city would lose $146,000 annually
If Cupertino built a hotel, 270 residential units, and 40 below-market-rate apartments, the city would earn $1.1 million annually
Source: Economic & Planning Systems Inc. Analysis commissioned by city, July 2017.”
so which option to approve”
– 670 + 67 units (737) or
– 270 + 40 units (310).
That’s’ a differential of 427 units or in terms of the high revenue option a 138% difference. Who’s going to vote (in Cupertino) to increase taxes or reduce services to compensate for $146k loss when the same land can produce +1.1 million in revenue for improved services or reductions in taxes?
And I’m sure if Google wanted to use the land for their business the cities koffers would grow even by far more with even more services at lower costs.
This is NIMBYism.
Ciao on this topic..
Prop 13 definitely affects market feedback that could moderate prices. There would be pressure to sell and downsize in markets that are in demand. While we don’t want to kick people out of houses, we have created a single class of people who don’t have to be subject to price increases. Renters and potential buyers are not immune from this apparently unjust market force. I should also note that there are circumstances where a house can be transferred to descendants while retaining the historical assessment of the original owners, a privilege of birth.
Let’s add this to all the other factors: Mortgage interest tax deduction, step up in cost basis on death, historically low interest rates, zoning restrictions on adding renters/new construction; there are no costs to rising prices for those who control supply. In fact, selling will incur capital gains tax, the exemption to which is probably exceeded in the big markets (an exemption that does not vary based on how long you own the house). Selling will also incur transfer taxes. Downsizing could still stiff seniors with a bigger tax bill than if they had stayed, especially if they want to stay in the same expensive neighborhood.
The game’s rigged for owners to stay put.
Welcome to Angry Bear. First comments go to moderation to screen out spammers and advertisers.
Contrary to your own beliefs, and investigation into whether prop 13 has any affect on the CA housing price and availability crunch found it didn’t.
“Last year the Legislative Analyst’s Office looked into the question of whether the state’s capped property taxes distort local land use decisions. Their conclusion: a resounding “probably not.” In short, a city’s dependence on property taxes or sales taxes didn’t predict much about its land use decisions.
Even so, there are other ways in which Prop 13 could be contributing to our affordability crisis. Another consequence of capped property taxes is that local governments have to scramble for other sources of cash. One of those sources is housing developers. On average, California levies the highest developer fees in the country, making it that much more difficult to build new housing.”
The link to this is the same link provided by Mr. Kimel at the start of his post.
The “another consequence” statement applied to the effect of prop 13 since day one after it passed in 1978 … so it’s been a standard way of city business for the past 39 years already and was a major reason city gov’ts throughout CA opposed it .. not to mention the opposition by public education.
The legislative analyst’s office found that it probably didn’t have any effect on the present employment driven housing crunch.
CA’s population 65 and over is 13.6 % in 2016
Assuming 2 persons of those over 65 on average occupy a single household, then at the very outside upper extreme 6.8% of households are occupied by retirees… rentals or ownership.
But many of those over age 65 live with their children or in long term care facilities .. which reduces the percentage to something below 6.8%.
Then of those over 65 who are renting rather than owning (owning apts, condo’s or single family dwellings) they don’t contribute to prop 13 effects if any effect at all. That reduces the 6.8% even more.
One way to estimate this reduction from 6.8% is to know the rate of owner occupied housing .. which in CA is 54.3%.
(same link as above)
Assuming however than those over 65 live in owner occupied housing at the rate of 75% instead of 54% a reasonable gross estimate is that the 6.8% value is below 5%.(6.8% x 75%)
In 2010 before the housing price crunch and employment boom in CA there were 13.68 million housing unit in CA.
(same link as above)
In 2016 there were 14.06 housing Units in CA
(same link as above)
So between normal housing prices and present housing prices the number of additional housing units (this is apts and condo’s and Single Family dwellings) the number of houses involved is 380k.
Of these 380k homes then less than 5% can be occupied by retirees owning them. That’s at most therefore 19k dwelling units which could possible affect the housing prices today relative to those prices in 2010 (which was lower)
Furthermore of CA’s population, 38.9% were Latino in 2016 and 6.5% Black alone. That’s 45% of CA’s population who are Latino or Blacks alone.
(same link as above)
Assuming the proportion of Black and Latino’s age 65 and above is about the same as the overall proportion of 65 and over (13.6%, then further assuming that owner occupied dwellings by Black and Latino’s is closer to the overall average of 54% for those 65 and above (a stretch
Therefore numbers change from less than 5% of owner occupied dwellings by those 65 and above to quite a bit lower percentage, is roughly 5% times the ratio 54%/75% or in the range of 3.6%
So the outside number of dwelling units in CA (the whole state, including low density housing and prices in the foothills and rural regions) which can contribute to the higher pricing relative to 2010’s prices is 3.6% x 380k homes = FEWER THAN 14k HOMES that can be occupied by those owners who are over 65 and thus potentially remaining in their homes due to Prop 13’s affects. that can relate to higher prices today relative to 2010’s prices which were in the normal CA housing prices range.
This isn’t even close to what is estimated to be required increases in housing to just keep prices stable, much less reduce them:
“The state’s Department of Housing and Community Development — an agency that works to expand access to affordable housing — says California has built an average of 80,000 homes a year for the past decade, which is less than half of the 180,000 new homes needed to keep up with the predicted population growth through 2025.”.
If we have a total of 14k homes, or double that if you want to decide the pricing in 2010 was also at the unaffordable levels, due to prop 13’s effect on those over 65, and we’ve been building 80k /year for 10 years or 800k new homes, then 14k is 1.75% or doubvle that then 3.5% of homes we’ve built already.
But relative to the number we need to have been building to keep prices stable at 180k/year or 10 years, then the prop 13 effect on retiree’s remaining in their homes is a miniscule 0.8 % or 1.6% if you want to double the numbers.
So you’re absolutely out to lunch about what you think prop 13’s effect has had on home prices in CA. Just this cursory analysis tells you that if you’d bothered to actually think yourself or look at some facts, but the legislative analysis has already said prop 13 has no affect.
Californin’s employment grew from it’s low point in Nov 2009 at 15.97 million to its present Aug 2017 employment of 18.2 million
That’s 2.24 million or 14%. over 7.8 years or an average annual growth rate of 2%/year.
In 2010 there were 12.81 million urban dwelling units in CA’ and a total number of dwelling units of 13.68 million, thus just 0.87 million or 6.36%
non-urban units. .
https://www.census.gov/prod/cen2010/cph-2-6.pdf, Table 2
In July 2016 there were 14.06 units and by assuming the same non-urban percentage as 2010, then 13.17 million urban dwelling units.
That’s a growth in urban dwelling units of 2.8% over the period, and a growth in total units of 2.78 %.
So in the same time period that employment grew by 14%, urban dwelling units grew by 2.8% or at 20% the rate of employment growth.
One might then expect that dwelling prices might rise by 5x due to demand exceeding supply by 5x (1/.20) in urban dense area’s.
In Nov 2009, the median single family dwelling price in CA was $304.55, and the average median price in 2010 was $305.6k.
In August 2017 the median price in CA was $565.3k
Source: 2009, 2010 and 2017 data from
http://www.car.org/marketdata/data/housingdata/ in Excel table
Thus the median price increased only by 85% rather than by 5x that demand over.supply might have implied. But the problem is that the median price is well below the average price so it understates the average change in price over the time period. But even assuming that the price increased by a smaller proportion than employment (in nominal prices) than the proportion of employment increases to number of dwelling units.
Never-the-less, the influx in employment at 14% was far greater than the increase in dwelling units at 2.8% and this means (of course) that the price driver was the lack of supply keeping up with demand.
And the lack of supply was due to NIMBYism .. which of course increases existing homeowners and apt equity and profits on sales as well as housing developers profits, so a city council will nearly always vote to satisfy existing voters benefits and especially if it also increased city revenues more than by zoning and rezoning land use for higher density housing and fewer businesses.
I’m not sure why anybody would think it would be any different… money talks, everybody else walks.
BTW, the LA, SF, and Inland Empire metro area’s median housing prices increased by 88% as opposed to the State median of 86% for the period from minimum employment (Nov 2009) to present (August 2017). Not a significant difference though the average price for the metro and State is probably higher for the Metro regions than the Stat overall.
Also fyi, the labor force in CA (employment+ unemployment) grew by
5.7% over that time as opposed to employment growing by 14%, so since both employed and unemployed need housing, then the increase in the labor force implies a demand increase in housing of 5.7% while housing grew just 2.8% which implies a demand multiple over supply of 2.85x … still a long way from the 88% increase in median housing prices.
Thus the issue is lack of available land to satisfy employment growth demand in the metro employment centers and that just comes back to how the little individual burgs city councils prioritize land use for low density housing and business uses rather than satisfying total employment based hosing demand.
Thanks for the link to this article:
It does not address Prop 13s effect on price at all, but it does mention that housing turnover declined after passage of Prop 13 and partially attributes lower turnover to the measure. I do agree that it probably didn’t effect city land use decisions, this is driven mostly by NIMBY style politics and general expectations of land value appreciation in our country.
However, the unfairness of Prop 13 should not be underscored, which is why I always bring it up in relation to housing markets because it follows the same pattern of thinking that most other development restrictions follow. It’s an “I’ve got mine” mentality. Therefore, all government regulation goes into transferring the burdens of society to those who may come later. In the same document referenced above, there are example maps of property tax paid/unit value that are wildly disparate. The burdens of moving in are equally disparate because you need to buy land to live on, but you are restricted heavily in the use, so you can’t take full advantage of the demand by adding families to your dwelling and increasing income stream to make economic sense of the purchase. This burden continues to increase, falling on new residents regardless of age. Meanwhile, many of the older dwellings are allowed to slip past the building codes (and tax increases) as long as nobody tries to upgrade them to fit more people.