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I have a controversial opinion about affordable housing: I think the federal govt shouldn't try to build affordable housing in expensive cities (San Francisco, San Jose, Los Angeles) and should instead build housing in already affordable places.
https://www.redfin.com/news/biden-affordable-housing-policy/
https://www.redfin.com/news/biden-affordable-housing-policy/
Biden stated in his housing plan that he wants to designate $65 billion in funds for constructing low cost housing in places "suffering from an affordability crisis."
I think this would be a bad use of federal money.
I think this would be a bad use of federal money.
The places currently suffering from an affordability crisis are place where it's most expensive to build homes. And that's because of the price of land.
Land accounts for 61% of home values in Los Angeles, but only 21% in San Antonio. https://www.redfin.com/news/value-of-house-vs-land/
Land accounts for 61% of home values in Los Angeles, but only 21% in San Antonio. https://www.redfin.com/news/value-of-house-vs-land/
So the federal govt could build a lot more homes (3 times as many homes by my rough calculations) if it focused on building homes in affordable places in the South and Midwest instead of expensive coastal California cities.
Many of the places where new houses are most affordable to build are already growing migration destinations, such as Dallas, Kansas City, and Cleveland where the number of homebuyers moving in more than doubled from last year. https://public.tableau.com/profile/redfin#!/vizhome/MigrationAnalysisbyRedfinQ4-2020/HistoricalNetFlow
During the pandemic, it has been the most affluent who have been able to adjust and move. We should support less affluent Americans who also want to move, instead of leaving them financially stuck in places with exorbitant housing costs and declining economic opportunities.
Biden wants to enact policies with bipartisan support. Under the policy I am proposing, Democrats will achieve their goal of reducing housing costs at a national level, and Republicans will be able to spend federal dollars in their own states, creating jobs and economic growth.
Biden’s plan to build housing in expensive areas is not likely to be politically feasible because current homeowners in these places have a vested interest in keeping home prices high to increase their own wealth.
And Biden’s other housing policy to give up to $15k in down payment assistance to first-time homebuyers won’t move the needle on making homeownership more attainable in a place like Los Angeles, where the median price of homes is nearly $700k and bidding wars are the norm.
Plus, promoting migration out of expensive places would actually reduce pressure on housing prices, because there would be fewer people competing for housing.
Now before the CA YIMBYs get too upset. I do believe California should build more housing, I just don't think the federal govt should fund this. California should remove unnecessary red tape, and get rid of single family zoning to encourage more development of dense housing.
