A time-honored political sleight of hand is to rename things so they appear to be something they are not; that certainly applies to so-called “affordable housing” in the more desirable areas of California. The truth is that there is no such thing – neither for the ordinary residents nor for those benefiting from housing assistance programs.
A recent Tweet from Dan Brekke, KQED, featured on BenitoLink was titled, “$142,448.33: What You Need to Earn to Buy ‘Median’ Home in Bay Area” addressed some of the same issues, but almost no one is dealing with the causes of skyrocketing housing prices or ways to improve the situation; this is not happening in a vacuum.
After applying the state cost of housing adjustment and reducing it by subsidies, California’s three-year average poverty rate jumps from 16 percent to 23.4 percent, the highest in the nation. Regardless of poverty rates,the affordability is low. The National Association of Realtors affordability index showed that inn 2014 only 64 percent [of those earning the median income] in the San Jose-Sunnyvale-Santa Clara area could afford a median-priced single family home and that figure assumed that the potential buyers had 20 percent for a down payment, no small feat. Meanwhile, the national average [of those earning the median income looking for a median-priced house] was 166 percent and the West Region average was 121 percent.
[Note of explanation: The percentage of the population that can afford to own a median-priced home is much smaller than the median earning families by definition since half the families earn less than the median. According to the January, 2015, U.S. Census the national homeownership rate as of the fourth quarter of 2014 was 64.0 percent. The national vacancy rate for homes was 2.0 percent].
The term “affordable housing” in California really means that much of the cost of an affordable home is shifted to someone else; sometimes directly or indirectly to other taxpayers – many of whom can’t afford a home of their own, either – or sometimes to small group of residents who can afford housing, or to both
San Benito County, like most California locales, does not have an overall housing development plan that treats the entire county, including the cities, as a planned community. The General Plan does not do it. Instead, we tend to deal with each development proposal on its own, isolated, merits. This result is a fractured community design. It’s like adding rooms to a home without looking at the overall floor plan – the result is akin to the Winchester House.
The law of supply and demand means that affordable housing is the impossible dream under the current planning methods. The simplistic approach of just raising wages or granting subsidies does not address the fundamental problem, which is the shortage. If everyone bids up the home prices, those homes do not become any more affordable than they were before.
The craziest thing is that one party – the developers – take the heat for almost all the housing problems when they are no guiltier than anyone else. The reason is, developers are often the most visible of the plethora of public and private entities who are in the housing business and we have to have someone else to blame.
California’s housing industry, new and resale, is a really big business that includes the land owners who may make the biggest profits. They may have purchased the land many years ago for a song and then circumstances allow them sell it to a developer for a fortune while staying out of the limelight.
The builders, contractors, laborers, suppliers, inspectors, banks, mortgage companies, insurers, realtors, real estate agents, title companies, advertising media, and many more are all directly or indirectly in the housing business.
The last, but certainly not least, group includes the utilities, local government and public agencies, and the home owners themselves – too many of whom think of their homes as gold-plated investments rather than a place to live.
In my opinion, much of the housing shortage is driven by the lack of a full range of options. Rentals that are available are often overpriced for the same reason. We need a countywide development plan that will encourage the offering of a wide variety of single-family and multi-family homes, apartments, townhouses, condominiums, and efficiency units sited and mixed to provide an overall planned community, not a hodgepodge of “whatever fits” developments. The residents of poorly planned developments are inward looking; they don’t see themselves as members of the larger community and they naturally act in the same isolated way.