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California's Housing Crisis

August 28 2017
August 28 2017

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August 28

Last Thursday had plenty of opportunity for all of us to hear from experts and network with colleagues, including CAR President Geoff McIntosh. Very few Marin agents made an appearance to either event which I hope is indication that you were all out there putting deals together, hosting your broker opens, and taking care of important business!

The event in SF was CA’s Housing Crisis: The impact on the Bay Area and its housing needs put on by the Center for CA Real Estate (CAR) and the Bay Area Council.  Housing affordability dips again to 29 percent statewide and only 17 percent in Marin. We’ve had the lowest single family residence growth rate in history, employment numbers have shown a 17% decrease in hiring velocity and although the public recognizes the need for housing supply, there are many barriers put up by existing communities to keep others out by opposing proposals for new housing, development and change.

The Bay Area is out of reach for those who wish to live here.  Our children won’t be able to afford a home here without our help. There’s migration out of the area to Seattle, Austin, Denver and Boston. Prop 13 issues were discussed; most notably that cities have to hike up development fees which discourage new housing since they aren’t collecting sufficient revenue from property taxes.  In San Francisco, I believe the cost quoted was a whopping $891,000 per door to build an “affordable” unit.

There were examples of where local cities had success with new housing units, notably Mountain View, Redwood City and Lafayette. The head of the YIMBY (Yes In My Backyard) movement claims that they educate millennials who mobilize and reframe the conversation which has allowed for a program in SF called HomeSF to succeed in building more housing by going taller or adding density.  Despite small wins, it’s a long big fight and every panelist thought that the way to impact change was to lobby with our local State legislators and make some noise.  We can’t rely on government to know what to do.

Speaking of millennials, there was an article in the Business Insider https://amp-businessinsider-com.cdn.ampproject.org/c/s/amp.businessinsider.com/millennials-are-killing-list-2017-8 about their preferences which I found entertaining. Included in reasons for the delay in home ownership were: starting families later, tighter credit standard and large amounts of school debt.  The Federal Reserve reports over $1.44 trillion dollars of outstanding student loans.

Although President McIntosh said that 3-4 months inventory was the new normal, I’m still hopeful that we’ll have good news on the inventory front after Labor Day.  Fingers crossed.

 


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