Culture Critique
Culture Critique

The Housing Crisis

Introduction

Human beings need a roof over their heads. Without housing, it is difficult for citizens to be productive members of society, if not survive. Access to affordable housing is essential to social living, or what is commonly referred to as civilization. It should therefore be considered a human right. In California, the cost of housing has gone up precipitously, particularly in San Francisco and Los Angeles, and other coastal cities, resulting in a housing crisis without historic precedent. It doesn’t have to be that way. In fact, the lack of affordable housing is an artificially created problem, the result of restrictive zoning that limits building heights and densities, discourages new construction, and inflates prices. This zoning code is a legacy of the postwar planning model of subdivision development.

 

For decades, construction of housing in the coastal cities of California has not kept pace with demand, as a result of the hijacking and gaming of the planning process by no-growth NIMBY residents of low-density districts. This chronic lack of housing was exacerbated by the economic collapse of 2007 that saw many lose their homes, which resulted in increased demand in the rental market, and subsequent price-gouging by landlords, all at a time when people were least able to pay inflated housing costs as a result of job loss and persistent low wages of the jobs that remained. AirBnB added to the problem by creating a platform where any homeowner, or individual with a rental contract, could pass on the cost of their mortgage or rent by renting spare rooms or units at premium prices in the short term, thereby further driving up the cost of housing and reducing its supply to long-term renters. Finally, the wage premiums paid to tech workers and upper management in other industries push rents out of reach for most workers.

 

High rents are not just a problem for those who have to pay them. They also create a drag on the economy through the redistribution of income from productive workers to unproductive landlords, which results in less discretionary income spent on goods and services. Furthermore, it creates a poverty trap where low wages and high housing costs prevent workers who rent from ever getting ahead, resulting in a two-tiered neo-feudal society of tenants and owners. Given that the U.S. economy is driven in large part by domestic consumption, a lack of affordable housing is bad for everyone in the long term. Clearly, this situation has to change.

 

California state and regional government needs to take control of the planning process and establish top down policies to ensure metro communities do not turn themselves into enclaves of low-density affluence by exporting the costs and impacts of growth to their neighbors while retaining the benefits for themselves. Meanwhile, municipalities need to regulate the local rental market by creating a registry, definitions and standards, and pricing policies for rental housing, along with active enforcement of those policies and standards, much as code compliance is enforced on non-rental property. Municipalities also need to take over the role of providing and managing affordable housing (funded by a fee system for new development), instead of leaving this to developers through incentive programs that produce little housing that is actually affordable. The planning approval process for new development also needs to be simplified to prevent obstruction by no-growth NIMBY homeowners. Additionally, the mortgage interest deduction subsidy to homeowners needs to be removed from the tax code, and Proposition 13 needs to be repealed so California homeowners pay property tax based on the current fair market value of their homes. Finally, all those negatively impacted by an unregulated predatory rental housing market need to organize and pressure their city government for a change in the zoning code to allow for more mixed use, multifamily development, and increased density and building heights, which will promote new construction, cut commutes, and improve the environment through reduced pollution and more efficient use of resources.

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