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  #1  
Old Posted Jan 13, 2019, 12:26 AM
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How California Can Build 3.5 Million New Homes

How California Can Build 3.5 Million New Homes


Jan 8th, 2019

By Alfred Twu

Read More: https://medium.com/@firstcultural/ho...s-dfe2f0ba3466

Quote:
California’s new governor, Gavin Newsom, has called for California to build 3.5 million new homes in the next five years as part of a “Marshall Plan for housing” to reduce housing costs and homelessness. For decades, California has added jobs faster than it has built housing, and this is what it’d take to restore the balance and end the shortage.

- That’s the equivalent of nine new San Franciscos (want to live in SF 10.0?), or an entire new L.A. County. Sounds ambitious. Not a fan of sprawl? Perhaps you might imagine endless skyscrapers, like in Blade Runner’s Los Angeles of 2019. It’s not that dramatic. Look at this another way. There are currently 14 million homes in California. Adding another 3.5 million is a 25% increase. Increasing California’s housing supply by 25% is similar to adding a bedroom to a 4-bedroom house. We can do this. — One way is to evenly distribute it. Accessory dwelling units (in-law flats) would sprout up in backyards. Expanded a house into a fourplex. On a typical block of 20 houses, build one new home each year and you’ll meet your 25% by 2025 goal. In urban areas it gets more challenging. Densification would mean replacing parking and existing housing. Some cities guarantee tenants relocation benefits and the right to move back into one of the new apartments at the same rent. This is still disruptive and causes concerns about gentrification.

- Also, we probably shouldn’t add more homes in areas at risk of wildfire or sea level rise, and there are also plenty of places far from jobs that might not be appealing anyway. The places where the housing shortage is worst is in coastal cities such as Silicon Valley, where the new jobs are. How about we just put some highrises in Silicon Valley? While there are a handful of proposals that do this, such as the Kylii project in Santa Clara, towers are rare for a number of reasons. — First, there is cost. Highrise construction can cost over twice as much, and the homes produced are priced in the millions. Then, there is the political landscape   height is a sensitive issue. While proposed upzoning legislation Senate Bill 50 calls for more homes in “jobs-rich” areas, it does not intend to change existing height limits in these areas, and even near transit height increases are limited to just a few floors. Finally, not everyone wants to live in a highrise.

- How about those six-story apartments that seem to be going up everywhere? Chances are you’ve seen at least one of these block-long “fast-casual” style apartment buildings being built at a transit station near you, replacing a gas station or shopping center. These are cheaper to build than highrises, but still costly   in San Francisco, construction costs alone can be over $400,000 per apartment. Add in land, design, financing, school impact fees, permit review costs, etc, and the total cost reaches $700,000 or more   over twice what a median income can afford. — What makes these buildings costly is that a third of the space is taken up by hallways, stairs, lobbies, and garages. Their large size also means lengthy construction times (more interest paid on construction loans), and lots of high-paid executives to manage the project. While these midrise buildings are a big part of California’s housing pipeline, they can’t do the job alone.

- Building 3,500,000 new homes in California will take a mix of approaches. Some places, especially near jobs and transit, will get large buildings. Some will get low-cost accessory dwelling units and duplexes. And some places, such as dense historic neighborhoods or outlying rural places, will see little or no new development. At an average cost of half a million each, 3.5 million new homes will cost close to $2 trillion to build. (I’ve rounded up to include additional costs for transportation, utilities, etc.) Most would be privately funded, though state and local governments are also investing billions in affordable housing. — Currently, California builds about 100,000 homes a year. Ramping up to 700,000 homes would represent over $300 billion dollars of new activity a year   a 11% bump to the state’s $2.7 trillion economy. Not quite enough to make us the world’s 4th largest, but still a huge rate for an advanced economy. With the right timing, building affordable housing could ride us out the next recession.

- During the Great Recession, most construction workers were out of work, and many found new jobs, moved, or retired. Currently, about 100,000 Californians work in construction. Meeting the 3.5 million new homes by 2025 goal would require a few hundred thousand more — almost enough to give every unemployed Californian a job. 3.5 million new homes may solve the housing problem at the state level, but in high demand neighborhoods such as those near downtown, rents will remain high. Rent control, rent freezes, and other anti-gouging legislation are part of a wider “Protect-Preserve-Produce” strategy that the Bay Area Metropolitan Transportation Commission and other organizations advocate for. — In the mid-1980s, California built 200,000–300,000 new homes a year, back when the state population was about 2/3rds of what it is today. 3.5 million new homes in the next few years is an attainable goal, and one we ought to work towards.

.....



If we shrink this down to a neighborhood of 1,400 homes (1/10,000th of the state) it would look something like this.






















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  #2  
Old Posted Jan 13, 2019, 1:24 AM
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Why do we need more homes--I thought everybody was leaving for Texas?

That said ('cause I had to say it),

Quote:
How about those six-story apartments that seem to be going up everywhere? Chances are you’ve seen at least one of these block-long “fast-casual” style apartment buildings being built at a transit station near you, replacing a gas station or shopping center. These are cheaper to build than highrises, but still costly   in San Francisco, construction costs alone can be over $400,000 per apartment. Add in land, design, financing, school impact fees, permit review costs, etc, and the total cost reaches $700,000 or more   over twice what a median income can afford. — What makes these buildings costly is that a third of the space is taken up by hallways, stairs, lobbies, and garages. Their large size also means lengthy construction times (more interest paid on construction loans), and lots of high-paid executives to manage the project. While these midrise buildings are a big part of California’s housing pipeline, they can’t do the job alone.
This is a pet peave of mine. In far too much of San Francisco there a height limit of 40 - 90 ft. In a large "brownfields" development (former rail yard) called Mission Bay--it's where UCSF built a new campus, including a hospital, and the Golden State Warriors a new arena--they essentially banned true high rises because the folks on Poterero Hill thought they would compromise their views and convinced their then state senator to threaten to withhold all of UC's funding unless it foreswore a high rise dorm.

Besides this issue, I truly believe that if most of CA would simply do away with the excessive requirements for "neighborhood input" that allow even one person to hold up if not totally block projects that meet established zoning along with crazy-rigorous environmental review and other governmental restrictions, private developers would and could build all the housing CA needs (and increasing the supply in this way would drive down prices).



I actually don't like this approach. What this graphic doesn't show is that most neighborhoods in SF have a commercial or shopping street--a "high street"--within a few blocks. I would rezone these streets allowing taller and denser development and spare the nearby single family neighborhoods any dense infill. You could add at least as much addtional housing and not create hysteria among the single family home dwellers. And it also would be a benefit to transit because you would run the transit lines on the commercial streets for the most part (as is already done).
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Old Posted Jan 13, 2019, 2:27 AM
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I read somewhere yesterday that in a bid to force NIMBY submission, Newsom is considering denying state funding to cities that dont meet affordable housing development goals.

Anyone else hear this?
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Old Posted Jan 13, 2019, 4:21 AM
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I say by all means, go for it. Heck, where I live now is going to need more housing as the new hospital finishes up and adds more employees to the area. Transit is also important and it has good potential here.


And none of this is very drastic. California will still be what it is now, just with more people and more city-like. This is honestly the future.
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  #5  
Old Posted Jan 13, 2019, 6:36 AM
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Quote:
Originally Posted by Pedestrian View Post
Why do we need more homes--I thought everybody was leaving for Texas?

That said ('cause I had to say it),


Besides this issue, I truly believe that if most of CA would simply do away with the excessive requirements for "neighborhood input" that allow even one person to hold up if not totally block projects that meet established zoning along with crazy-rigorous environmental review and other governmental restrictions, private developers would and could build all the housing CA needs (and increasing the supply in this way would drive down prices).
Indeed. Not only that, but they need to reduce the latency on some of the asinine regulations and environmental studies that delay developments and create massive timetables from conception to reality.

The California housing crisis is self inflicted. All housing shortages are self inflicted.

Good for Texas for gobbling up refugees from California. Texas has a good developers environment. Something that California needs.

There is too much regulation in your state. Its somewhat over kill.
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Old Posted Jan 13, 2019, 6:40 AM
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The California Environmental Quality Act is a joke. It needs some serious revisions. Its a main factor or one of them in the lack of housing. Severely limits the potential, and cost developers a lot of money and time.

Further, places like SF, with its community input, and ridiculous caps, is further making the city into a gated community. Which is what it is. A glorified gated community.

And its a shame.

But once again, this is not really even a California issue, but one that includes many other cities in other states, so to say its only California would be unfair.

The will is just not there. Add that with spineless leaders who won't push for the type of reform that is needed, and no-wonder we have a housing crisis.
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  #7  
Old Posted Jan 13, 2019, 11:41 AM
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Some or all of the below:

1. more micro apartments and micro houses
2. more "granny flats" in backyards
3. more prefab factory built housing, built in modules using cheaper and efficient assembly line techniques, or using recycled shipping containers repurposed for housing
4. more multistory and skyscraper housing, including recycled office buildings repurposed for housing.
5. more dorm style housing and rooming houses. Common dining room, with bedrooms rented out (possibly with a small bathroom in each room).
6. as a stopgap measure until the above are done, more large urban campgrounds with tent spaces, large tents to house many, and parking spaces for RVs and cars as a stopgap to house the homeless. Onsite security provided, storage provided, showers and bathrooms provided.

All of the above will require zoning changes, tax changes and tax incentives and fewer NIMBYs to block things.

Last edited by CaliNative; Jan 13, 2019 at 11:54 AM.
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  #8  
Old Posted Jan 13, 2019, 1:38 PM
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Some thorns that will prevent this:
NIMBYs
Enviros
Social Justice Warriors
Existing state laws
Local zoning codes

Then there's other stuff that could happen that is completely out of anyone's control:
Tech Bust 2.0
Recession
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  #9  
Old Posted Jan 13, 2019, 2:01 PM
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Are we talking low income housing or middle class housing?
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Old Posted Jan 13, 2019, 6:43 PM
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Quote:
Originally Posted by Leveled View Post
Are we talking low income housing or middle class housing?
Middle income clearly. This isn't about subsidized housing but how to build market rate housing for the masses.

Actually, though, the attempt to be inclusive and not displace lower income working people (a different issue from the poor and perpetually welfare-dependent) by requiring an "affordable component" in market rate projects (hard to keep up, but now something like 30% of San Francisco projects must be "affordable"), the cost of the rest of the project is raised to the luxury level, beyond even a very affluent middle class.

Quote:
HOME-SF Affordability Requirements

What are HOME-SF's affordability requirements?
Project sponsors that choose HOME-SF are required to offer 30% of units in their housing project at prices or rents affordable to low, middle and moderate-income families. Individuals and families can qualify for these units based on their income, measured in percent of Area Median Income (AMI). Currently, the affordable units are required to be affordable to the following income categories:



The current (2018) AMI in San Francisco for a family of four is $118,400.

Half of all households in San Francisco earn less than this AMI and the other half of households earn more. AMI is set each year by the US Department of Housing and Urban Development (HUD) and is based on household size and the income households earn in the area . . . .

Eligibility for affordable units is determined by a household's a) size (number of people in the household) and b) income (amount of income earned by all members of the household).

Below is a sample table of income ranges that would qualify households of various sizes for affordable units in HOME-SF projects. Please see the Mayor's Office of Housing and Community Development for more detailed information on the BMR rental and ownership programs.


https://sf-planning.org/home-sf-affo...y-requirements
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  #11  
Old Posted Jan 14, 2019, 4:18 PM
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Quote:
Originally Posted by dimondpark View Post
I read somewhere yesterday that in a bid to force NIMBY submission, Newsom is considering denying state funding to cities that dont meet affordable housing development goals.

Anyone else hear this?
I have not... Although, some weeks ago, I heard that Governor Newsom wants to reintroduce redevelopment agencies, which Governor Brown abolished some years ago, to help balance the California budget (which it did help with, and probably even contributed to our state's surplus). I was against the abolition of redevelopment agencies when I first heard about it, because that was a means of how new development projects could be built, though I agree it was often abused.

Anyway, when California allowed redevelopment agencies, the stipulation was that cities with redevelopment agencies had to also create a certain percentage of affordable housing, any form of it. In the 90s, the little LA suburb I grew up in (Cerritos), met that requirement by building a number of senior citizen communities. I'm wondering if Newsom's goal of creating more affordable housing is part of his supposed plan to reintroduce redevelopment agencies.
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Old Posted Jan 14, 2019, 5:35 PM
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Quote:
Originally Posted by Pedestrian View Post
Middle income clearly. This isn't about subsidized housing but how to build market rate housing for the masses.

Actually, though, the attempt to be inclusive and not displace lower income working people (a different issue from the poor and perpetually welfare-dependent) by requiring an "affordable component" in market rate projects (hard to keep up, but now something like 30% of San Francisco projects must be "affordable"), the cost of the rest of the project is raised to the luxury level, beyond even a very affluent middle class.


https://sf-planning.org/home-sf-affo...y-requirements
Yeah that’s the thing I take issue with. Building just 7 figure units mixed in with section 8 doesn’t help.
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Old Posted Jan 14, 2019, 5:57 PM
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Originally Posted by Leveled View Post
Yeah that’s the thing I take issue with. Building just 7 figure units mixed in with section 8 doesn’t help.
It isn't "section 8". That's a federal program involving vouchers and, I believe, is rental only housing. San Francisco's "affordable housing" requirement is very different. It is for middle class working people as you can see by the income requirements posted above. It includes both rental and for-sale housing. It involves a mandate to developers to build and sell units at below-market rents/prices to approved renters/buyers. And in the case of buyers, when they sell, they must sell to other approved buyers at a below-market price to perpetuate the program.

The developers can include the required below-market units in the same building as the market-rate housing they are building or they can build it elsewhere (I believe there is a distance limitation to prevent creation of certain neighborhoods that are all "affordable" and others that have none).

There are a number of problems I see with this. First of all, if units are sold below market, and possibly even below the cost of building them, in order dor the entire project to "pencil out" (as they say), the cost of those units must be added into the market rate units being simultaneously developed pushing up their prices. Second, in the case of for-sale housing, you can end up with woners of limited means living in the same building with very affluent owners which causes problems when it comes time to fund improvements, maintenance and other things factored into assessments. The rich owners can pay higher assessments and want to improve the property but the poorer owners can't afford it. Finally, the city has shown it isn't competent to monitor resales to be sure they go to new approved buyers and the sellers aren't making windfall profits because they paid below market rates themselves.
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Old Posted Jan 15, 2019, 1:22 AM
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I take serious issue with adjusting the qualifications for, "affordable" housing based on the areas median income. This just creates inefficiency by subsidizing those high cost of living areas when we should be moving people out of those cities and into more affordable areas.
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Old Posted Jan 15, 2019, 1:57 AM
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Upzone everywhere and let market demands decide what gets built. I do like the examples that spread out the new housing units. It may not work out to be quite that distributed as more housing units will go where demand is highest. But by allowing extra housing units everywhere one town or neighborhood can help relieve pressure on a near by town or neighborhood. A huge amount of additional housing can be added without changing the character of the neighborhood much if any.
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Old Posted Jan 17, 2019, 5:27 AM
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I was originally against this (secret NIMBY), but the more that I think about this, I would be down.

I even offer San Mateo County (my county) as a tribute. I feel like the Bay Area could realistically support 10 - 12 M people anyways.

90% of this new housing would have to be TOD, though. Our freeways in CA are way over-taxed.

In San Mateo County, we could add apartment blocks near CalTrain stations (we might as well get the full bang for the buck from electrification). Heck, we could even add apartment blocks not near train stations, and have shuttles that take people to CalTrain stations at specified times (probably one in the morning, and one in the evening). CA could also add BRT on El Camino, and upzone the parts around this corridor.

Point is: We can add these units, but the occupants cannot all be using cars. There simply isn't enough space in the freeway system / given how geographically dispersed the economic centers are in the Bay Area.

TLDR; this is a good idea, but the new housing needs to be TOD.
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Old Posted Jan 17, 2019, 6:19 AM
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Originally Posted by SFBruin View Post
In San Mateo County, we could add apartment blocks near CalTrain stations (we might as well get the full bang for the buck from electrification). Heck, we could even add apartment blocks not near train stations, and have shuttles that take people to CalTrain stations at specified times (probably one in the morning, and one in the evening). CA could also add BRT on El Camino, and upzone the parts around this corridor.

Point is: We can add these units, but the occupants cannot all be using cars.
Put 'em in Redwood City and build out the system of ferries and water taxies.
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Old Posted Jan 18, 2019, 2:52 AM
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This is terrific! I used to hate Newsom and was furious when Villaraigosa lost the primary, but if this goes through, it'll be the best thing for California in decades. Running some realistic numbers, here is how things might turn out on the ground:

California Population by Year
2018: 39,557,045
2019: 39,720,000 (+162,955 people YOY)
2020: 39,930,000 (+210,000 people YOY)
2021: 40,200,000 (+270,000 people YOY)
2022: 40,620,000 (+420,000 people YOY)
2023: 41,200,000 (+580,000 people YOY)
2024: 41,870,000 (+670,000 people YOY)
2025: 42,580,000 (+710,000 people YOY)
2026: 43,310,000 (+730,000 people YOY)
2027: 43,050,000 (+740,000 people YOY)
2028: 44,800,000 (+750,000 people YOY)
2029: 45,560,000 (+760,000 people YOY)
2030: 46,330,000 (+770,000 people YOY)

2018-2030 (+6,772,955 people)

Metropolitan Southern California Populations, 2030
Los Angeles County: 12,110,000 people (+1,906,493 people)
San Diego County: 3,680,000 people (+342,315 people)
Orange County: 3,630,000 people (+409,600 people)
Riverside County: 3,250,000 people (+746,734 people)
San Bernardino County: 2,490,000 people (+441,811 people)
Ventura County: 950,000 people (+95,777 people)
Total: 26,010,000 people (+3,783,515 people)

Metropolitan Bay Area Populations, 2030

Santa Clara County: 2,310,000 people (+351,847 people)
Alameda County: 1,990,000 people (+301,810 people)
Contra Costa County: 1,460,000 people (+292,561 people)
San Francisco County: 1,160,000 people (+270,208 people)
San Mateo County: 970,000 people (+193,221 people)
San Joaquin County: 890,000 people (+144,576 people)
Sonoma County: 550,000 people (+45,783 people)
Solano County: 540,000 people (+94,542 people)
Santa Cruz County: 310,000 people (+33,103 people)
Marin County: 300,000 people (+39,045 people)
Napa County: 150,000 people (+9,027 people)
San Benito County: 70,000 people (+7,690 people)
Total: 10,710,000 people, (+1,872,211 people)

Rest of California Populations, 2030
9,580,000 people (+1,004,274 people)
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Old Posted Jan 18, 2019, 5:44 AM
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This is terrific! I used to hate Newsom and was furious when Villaraigosa lost the primary, but if this goes through, it'll be the best thing for California in decades.
If you are a Progressive Democrat you’re going to love Newsom. I can see a certain Southern CA loyalty to Villaraigosa but he’s actually moderate compared to Newsom and the things Newsom has announced—this, universal healthcare in CA etc—are doubtless just a start.

I’m obviously from Northern CA and a moderate so I’m no fan of Newsom, but I think he maybe should beware being tripped up by something similar to Gray Davis.
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Old Posted Jan 18, 2019, 7:10 AM
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Originally Posted by Pedestrian View Post
If you are a Progressive Democrat you’re going to love Newsom. I can see a certain Southern CA loyalty to Villaraigosa but he’s actually moderate compared to Newsom and the things Newsom has announced—this, universal healthcare in CA etc—are doubtless just a start.

I’m obviously from Northern CA and a moderate so I’m no fan of Newsom, but I think he maybe should beware being tripped up by something similar to Gray Davis.
I'm definitely more of a Clintonian moderate, but I'll happily side with anyone who will liberalize housing policy in California!
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