Blogging Bayport Alameda

March 24, 2016

You’re rich, son

Filed under: Alameda — Lauren Do @ 6:04 am

Folks apparently this is the new Bay Area reality when it comes to housing shortages.  Both the City of Oakland and the City of Palo Alto are studying upping the median income rates in their cities to hep subsidize housing for middle class families or relaxing the rules around who qualifies for first time homebuyers low interest loans.

From the East Bay Express on Oakland’s plans:

City staffers also want to redefine affordable housing for two other affordable-housing funding sources so that middle-class families can benefit from housing subsidies. Oakland currently operates a first-time homebuyer program that makes subsidized loans to very low- and low-income renters seeking to purchase a home in Oakland. To qualify for the program, a household cannot earn more than 100 percent of the area median income, or $84,150 for a family of three. The city wants to increase this income limit to 150 percent of the area median income so that a family of three that earns as much as $126,230 a year would qualify for a subsidized home loan from the city. A borrower does not have to be an Oakland resident to qualify for these subsidized loans.

From CBS Bay Area on Palo Alto’s plans:

The city council has voted to study a housing proposal that would essentially subsidize new housing for what qualifies as middle-class nowadays, families making from $150,000 to $250,000 a year.

The plan would focus on building smaller, downtown units for people who live near transit and don’t own cars, along with mixed-use retail and residential developments.

And while the Bay Area is struggling to simply to rearrange the deck chairs, New York City has created a huge affordable housing plan that, while “imperfect” at least takes steps to solve the housing crisis that has existed in NYC for a very long time.

From the New York Magazine:

The de Blazoning amounts to the mayor’s version of Obamacare, an imperfect but monumental legacy program on which he staked his political credibility. As with health care, the rezoning program has been crafted to nudge the private market, not replace it; to protect many but not all; to withstand economic tumult; to outlive the current administration by a lifetime at least; and to dole out its effects over decades. It marshals thousands of arcane details into a new bureaucratic landscape that will give many citizens room to breathe. As with health care, it has downsides — especially for those who like the city just the way it is, or, rather, the way it was.

Every big change in the rules affects the texture of the city. The original 1916 zoning code produced the Art Deco era of setback skyscrapers. The 1961 update gave us flat-front towers and low-ceilinged apartments. As I have attempted to explain before, the new plan consists of three coordinated campaigns: 1) gradually rezoning large swaths of the city, 2) decreeing that when areas do get rezoned, all new buildings must include a sizable chunk of affordable housing, and 3) updating the citywide rules to improve the kinds of buildings that go up — higher ceilings, more storefronts, bay windows, texture, and stoops. But the effects will vary drastically by zip code. All three parts, twined together, will quickly reshape East New York, a transformation primed by billions of city subsidies.

At the rate of the Bay Area’s non action this region will soon be only comprised of the wealthy or those families that were fortunate, I mean “worked hard” to buy property prior to the economic boom of today in the 80s and 90s.  Surely that sort of economic disparity is much worse than a loss of the “character” that housing opponents always trot out as a rationale for doing nothing.

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10 Comments »

    • Very through article.

      Comment by frank — March 24, 2016 @ 7:29 am

  1. It is hard to understand that otherwise reasonably bright people cannot connect the dots between a price cap and a shortage. They were able to figure that out in Boston and Cambridge Mass.

    Comment by Ed Hirshberg — March 24, 2016 @ 8:45 am

    • Yes, nobody wants to build in San Francisco because the price the developer could get is capped due to rent control…. oh, wait, nevermind. Anyone who analyzes the shortage and determines that price controls are to blame and not land use decisions by local governments has a monster of a blind spot. Rent control exacerbates the shortage, sure, but with Costa-Hawkins, it can not be blamed for the lack of a market solution to the supply problem.

      Comment by BMac — March 24, 2016 @ 9:30 am

  2. 3. Nor that they cannot connect the dot between a supply restriction and unaffordably high prices. Go figure.

    Comment by BC — March 24, 2016 @ 9:00 am

  3. Decades ago I built a house for a car dealer who said he tried not to lose more out the back end than he was taking in through the front end. That’s the problem here too. We are losing older affordable housing faster than we can build new expensive housing. All thanks to rent control.

    Comment by Ed Hirshberg — March 24, 2016 @ 10:10 am

  4. It’s disappointing when you can’t get exactly what you want where you want, but isn’t that the same for everyone everywhere? We all have to compromise to some extent. If developers have their way unfettered, they will ruin much of what makes Alameda a nice place to live.

    I also think that it’s unfair to paint long-time residents of Alameda in a negative light simply because their struggles are different from yours. The guy who bought a house in 1970 may have missed out on college because he was drafted and served in Vietnam. Does that make him luckier than someone in his 20s, today who never had to worry about serving unless he wanted to?

    Things have a way of evening out. No one generation is uniquely blessed. We all have had benefits and challenges particular to the times in which we live. Fostering a divide based on age or opportunity does nothing to improve the situation. It only makes everyone suspicious, unhappy, and unwilling to compromise.

    Comment by Denise Shelton — March 24, 2016 @ 9:33 pm

    • The guy who bought a house in 1970 may have missed out on college because he was drafted and served in Vietnam. Does that make him luckier than someone in his 20s, today who never had to worry about serving unless he wanted to?

      Except that if you were called on to serve and then were fortunate enough to come back alive you had the benefits of the GI Bill which offered low interest home loans and college payment benefits. Unless you were black, then the most important part of the program, the home loan provision, was made less available.

      But, kids these days, they don’t have to worry about being drafted into war so they don’t really deserve the same opportunities to live in affordable housing and have an opportunity to build wealth the way that previous generations were able to. Because a subjective “nice place” is more important.

      Comment by Lauren Do — March 25, 2016 @ 4:27 am

    • Sorry, but that’s not a very strong argument. Some generations may well be in better situations than others. One should at least be open to the possibility. Not wanting to consider the possibility because is makes people sad isn’t really a solution. Try applying the same logic to the situations of people of different genders or races.

      Comment by BC — March 25, 2016 @ 11:46 am

  5. I do not buy the “market forces” argument that Ed Hirschberg and others so strongly believe. As I see it, uncontrolled greed (AKA “market forces”) has helped create the housing booms–and busts–as well as the “glut” of luxury-priced housing all over the Bay Area, to the detriment of multi-family and affordably-priced housing of all sorts. (I also count Measure A from 1973 and its regional zoning counterparts as part of this “greed” and “me-first” attitude.) The Office of the Legislative Analyst agrees with this view, BTW.

    http://www.lao.ca.gov/reports/2015/finance/housing-costs/housing-costs.pdf

    Rezoning like has been done in NYC and is being considered in Oakland and Palo Alto needs to be done regionally or statewide in order to produce significant effects. Unfortunately, our local and state legislators–even the best ones–are still too vulnerable to deep-pocketed lobbyists, PACs, and greedy-bastard-values “nonprofit” bullies like the Howard Jarvis Taxpayers’ Association and California Association of Realtors to ever amend Costa-Hawkins so that housing is genuinely accessible and affordable in California. (I say this as a former homeowner who benefited substantially from the local real estate “bubble” despite the fact that we had to sell our home during a long-term period of under- and unemployment.)

    We need real campaign finance reform (nationwide and in CA) as much as we need reforms in housing laws and zoning regulations. At 64 years of age,I often doubt that I will live long enough to see either one adopted in California or the overturning of Citizens United, but that does not mean I will stop working for economic, social, and political justice.

    Comment by Jon Spangler — March 28, 2016 @ 12:41 pm


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