Wednesday, January 20, 2021

Sanity in CA housing?

As reported by the Sacramento Bee, its city council voted unanimously to allow four-plexes across the city overturning one-house-per lot zoning. 

It's couched somewhat in the language of diversity, 

City officials said the proposal would help the city alleviate its housing crisis, as well as achieve equity goals, by making neighborhoods with high-performing schools, pristine parks and other amenities accessible for families who cannot afford the rising price tags to buy homes there.

“Everybody should have the opportunity to not only play in Land Park but to live in Land Park,” Mayor Darrell Steinberg said. “That’s the Sacramento that we all uphold, that we love, that we value, and you better believe this drive for inclusion and equity is the driving force of our city and it is going to continue well beyond my tenure here.”

But I applaud that. Yes, the effect of highly restrictive zoning is exactly to drive "diverse" people away. Let's not be hypocrites. 

And ok, we're not waking up in property-rights nirvana either

“We’re going to insist on design quality and scale,” [Mayor] Steinberg said

 in response to comments.  And 

buildings would still have their current height restrictions. There would also be historical protections, limits on how much of a lot size a house could take up and on the amount of square footage.

Ok, baby steps.

Neighborhood association leaders in Land Park and Elmhurs... suggested the city only allow multi-unit houses in certain areas of the city, along commercial corridors and near transit stations.

“No one will have the ability to live in lower-density neighborhoods,” said Maggie Coulter, president of the Elmhurst Neighborhood Association. “The city needs to preserve existing neighborhoods in order to promote home ownership opportunities for everybody.”

Kudos to Sacramento city council for seeing through this complete incoherence, and the obvious flaws of segregating housing to undesirable parts of the city.

The lack of a whisper about "affordable housing" mandates is also refreshing. Maybe sanity can erupt in a one-party state, when discussions are not tinged with partisan derangement syndromes?


  1. The price of these proposed new "affordable" housing units will still be quite high. This will afford young urban professionals starting out an opportunity to move from an apartment or small condo. It's not really going to have an impact on where so called "people of color" live, unless said "people of color" are in the young urban professional class.

    1. Who will move into all the apartments and small condos the young urban professionals in your example leave behind? Will they just sit empty, or will perhaps folks lower on the property ladder move up a rung?

  2. There was an article that came out a few years ago that had to do with what imagery arose in people's heads when the term "affordable housing" was uttered - legions of lost souls forever roaming a self-imposed wasteland of drug users and alcoholics. This imagery was particularly scary to home owners who didn't want their children mingling with "degenerates." And so these NIMBYs lobby their local government and throw their weight around to restrict zoning for "affordable housing." On top of that, you also get NIMBYs who are afraid of watching their investment potentially lose value. So, yeah, you have the presented reason and the real reason.

  3. "Maybe sanity can erupt in a one-party state, when discussions are not tinged with partisan derangement syndromes?"

    Adversarial systems tend to produce better outcomes, if only because someone who disagrees with you is considerably more motivated to see flaws in your arguments. This was part of John Stuart Mill's argument for free speech in his essay On Liberty, as well as something a certain Jonathan Haidt likes to remind people from time to time.

    Of course, the "one-party state" phrase might be overstating the homogeneity of beliefs. While the activist base of the Democratic party is particularly noisy, it isn't dominant and it causes internal disputes. There might be more moderate voices in there, as well as communities experiencing the nonsense first hand, who will pressure the system away from the extremists.

    Still, if people act as though "free market" is a dirty word intertwined with racism and cronyism, internal disputes within the majority party and community discontent will not cut it. A lot of people are working day, day out to make sure the only acceptable way to turn is further left -- and that only works if you like driving in circles.

  4. America's economists have spent decades expressing acute concern about inflation, nearly to the point of obsession.

    But what has really been driving down American living standards has been property zoning and so-called "free trade".

    Property zoning legalizes and enforces economic rents, applied against property tenants. Big rents! Look at Hong Kong, London, or the west coast of the US.

    I heartily advise John Cochrane and all to read a new book "Trade Wars are Class Wars" by Michael Pettis. To compete globally, a nation must decrease its labor share of income (a gross simplication of the book).

    The book may sound like a left-wing tract, but it is really not. Collusion between multinationals and the CCP, or the German government, is hardly a free-market or right-wing ideal.

    I applaud John Cochrane for his attention to the results of property zoning.

  5. My view is that one of the pernicious effects of strict residential zoning is that people paying up for single-family housing (at rates inflated by strict zoning) feel that part of what they've paid for is the right to keep their neighborhood's zoning unchanged. While that's of course not true from a legal perspective, it is (at least arguably) economic reality.

    I generally support having very loose zoning regulations, or none at all. The latter is not likely to be politically feasible in a place once it has enacted zoning and planning rules.

    That said, a potential - and logical - market reaction is to put in place contractual legal limits that resemble strict zoning rules (deed restrictions, HOA-enforced architectural rules, etc.) when an area is newly developed.

    I'm in favor, philosophically, of allowing these restrictions. They are, after all, clearly disclosed contractual rights and restrictions.

    There are ways that these contractual rights differ from municipal zoning laws. Specifically, they aren't subject to local political decisions to change them over time.

    That said, at a certain size of master-planned community (hundreds or thousands of homes), they are the size of small municipalities. Not of course a city the size of Sacramento, but at least a small residential suburb. And, if the contractual land-use restrictions can be changed by a less than unanimous vote (such as a supermajority), and if an HOA board is somehow involved in that process, it even more resembles municipal politics.

    With that reality, should state laws prohibit or severely limit these contractual restrictions as a matter of public policy? My philosophical inclination is to say "no".

    If not, however, isn't there a good chance - as a metro area grows outward - that restrictions akin to one-house-per lot zoning are simply created via contract as part of the initial development process?

    Perhaps the answer is not to see it as a matter that public policy should address, and I'm inclined to agree with that view.

    I can't completely shake the thought, however, that the distinction between "large master-planned community" and "small residential suburb" isn't as clean in practice as in theory. That's particularly the case if a small residential suburb has established a longstanding precedent of enforcing zoning rules such as one-house-per lot. The continuation of that practice can look like a quasi-contractual right, which many residents feel they've purchased along with their homes.

    This blurring is less relevant for a city the size of Sacramento (approximately 500,000 population), but I think that feeling of "current zoning is part of what I acquired with my home" - however misguided in legal terms - is a powerful force in local politics.

  6. Well, you run into a problem when densifying an existing neighbourhood. Suppose the original housing development was predominantly single-family homes, perhaps those original homes were summer cottages arranged around a beach and a bay that even earlier was a simple fishing village until the nearby town that the cottagers came from became a bustling young city. Population pressures following WW II and urbanization in response to population growth turned the summer cottage neighbourhood into a suburb of the bustling mature city, but remained largely single-family oriented.

    Immigation and migration increased the demand for housing to support a growing work force, and the cottages gave way to a mix of up-to-date single-family houses and two-family houses to meet the increased demand for owner-occupied housing. The market dynamics changed as well--the immigrants and migrants coming to the city were wealthier than the original inhabitants and could afford more upscale interior furnishings and more architecturally elaborate exterior designs. A former cottage on a 6,050 square foot regular lot, for example, changed hands for $1.2 million when a speculator-builder purchased it. The old cottage was torn down, and a two-family duplex housing unit was constructed on the 6,050 sq. ft. lot. The economics of the speculator-builder followed conventional practice and the finished duplex house sold for $2.4 million in total ($1.2 million per family unit). The original cottage measured 1,000 sq. ft. of useable floor area, albeit not all areas in the cottage were 'full-height'. The duplex house measures 3,025 square feet in total on two floors suspended over a 1,500 square foot basement shared by the two households (separated by a party wall). As these things go today, the amount of useable outside living area was cut by more than 50%. In order for the owners of the duplex house to hope to meet their monthly mortgage payments the basement areas are rented out to tenants who pay $1,250 per month per duplex unit for 500 sq.ft. of living area (1,000 sq.ft. total) in the basement. The owners find that there is insufficient storage space in the duplex units' main and upper floors, and turn their alloted garage space (single garage building divided into two garage bays by a party wall) into storage areas. The renters require parking and take the open-air parking area for themselves ($100/month rental charge each). And the duplex house unit owners park on the street (with a municipal parking permit). What was once a pleasant bucolic semi-rural neighbourhood has become a parking lot with duplex houses holding four families apiece. To top it all off, the duplex house owners are not talking to one another and won't agree on needed maintenance of the duplex strata condominium units. The strata condominium or strata corporation is a shared ownership corporation--both owners have to agree to effect any changes to the common property (the exterior of the duplex house) because there is a 75% majority rule imposed by law before the strata corporation can act. What was once a more-or-less harmonious neighbourhood is now beset with vehement disagreement and simmering strife. The owner who sold the old single-family cottage on the single-family 6,050 sq.ft. lot is chortling over the outcome of densification--she has the money and has moved further afield into a larger and less taxed single-family house on acreage in a neighbourhood that lacks urban planners and builder-speculators. Professors of urban land economics are known to live in the vicinity, but none of them evidence any desire towards 'densification' of their bucolic surroundings (at least not in their working lifetimes). To each his own.


Comments are welcome. Keep it short, polite, and on topic.

Thanks to a few abusers I am now moderating comments. I welcome thoughtful disagreement. I will block comments with insulting or abusive language. I'm also blocking totally inane comments. Try to make some sense. I am much more likely to allow critical comments if you have the honesty and courage to use your real name.