Saturday, June 4, 2016

#156 / Let's Have Housing Price Control

The People's Democratic Club of Santa Cruz County, affectionally known as the PDC, hosted a discussion on affordable housing on Thursday, May 19th. I was privileged to be able to participate in the discussion, and joined former Santa Cruz County Planning Director Tom Burns, and current County Planning Department staff person Sarah Neuse, for what turned out to be a lively and (I thought) productive session. The very engaged audience, more than any of the named presenters, is what helped make it that way.

The PDC billed the evening as "An Initial Conversation about Density and Affordable Housing," with the idea, I think, that there would be a lot of back and forth on the question of whether or not it is "worth it" to increase residential densities in Santa Cruz in order to provide the community with more affordable housing. As some who are reading this blog posting probably know, the City of Santa Cruz is currently considering a "Corridors Plan," to increase building heights, mixed uses, and residential densities along the City's main transportation corridors (Ocean Street, Mission Street, Water Street, and Soquel Avenue). Santa Cruz County has recently adopted a somewhat similar plan, which they call the "Sustainable Communities Plan."

The PDC sent out its meeting announcement with the following advisory: 

There’s almost universal agreement that Santa Cruz County has a housing crisis! But responding to the need for affordable housing often comes into conflict with environmental, neighborhood, and traffic concerns. Are their [sic] new ways to increase affordable housing within these concerns? Let’s talk about it. This will be a conversation – not a debate or a hearing – that will attempt to hear and respect differing views about how to meet the housing crisis without sacrificing the integrity of our community. We see this as a first step in finding common ground among progressives to address this issue that affects all of us.

I think it's fair to say that the meeting did not end up with a focus on "tradeoffs" between community integrity and affordable housing. I think most of those in attendance ended up agreeing with me that increased residential densities do not, in and of themselves, produce more "affordable" housing, and that any thought that our affordable housing crisis can be eliminated (or made less severe) by "building our way out of it" is a false expectation. 

It may be theoretically true, as our high school economics classes tell us, that when "demand" is high, prices rise, and that increasing "supply" should reduce the price. However, in the real world, right now, a lot of existing and new housing is not being purchased for "shelter," and especially not for people who live in the community. Housing is increasingly being purchased as an "investment," and those doing the purchasing are people with money, from all over the world. Considering the imbalance between those with lots of money and the ability of a local community to build new housing, new housing production almost certainly does not lead to lower housing prices. Of course, in Santa Cruz County, and especially in the City of Santa Cruz, continued growth at the University of California, Santa Cruz adds even more demand into the mix. 

Is there a solution? Really, as I said some time ago, in a blog posting called "The Tough Truth About Affordable Housing," we need to impose price controls on housing. You can do that with new housing, but you can't do it with existing housing. As the "political revolution" that Presidential candidate Bernie Sanders call for moves ahead, we probably need to fund new, permanently price-restricted housing for working families, and to add that demand to Sanders' call for affordable, single-payer health care and a free college education for all our young people. 

A decision on whether or not to increase building heights, mixed uses, and residential densities along our main transportation corridors must be "decoupled" from our concerns about affordable housing. There is no automatic connection between the two. 

What will make housing affordable is price controls.

It's just that simple.

And that is, indeed, a very "tough truth." 

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