Coldwell Banker House

Coldwell Banker House

• 2,200-square feet • 4 bedroom • 2-1/2 baths • Family room • 2-car garage • Nice neighborhood

$170,000 in Houston

$320,000 in Portland

$422,000 in Modesto

$1,100,000 in San Jose

1969 Median Home Values

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

NewYork

San Jose LosAngeles

U.S.Average

PortlandModesto

Source: Census Bureau

1969 Home Value to Income Ratios

0

1

2

3

NewYork

San Jose LosAngeles

U.S.Average

PortlandModestoHome Value Divided by Family Income

Source: Census Bureau

2006 Median Home Values

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

San Jose LosAngeles

NewYork

ModestoPortlandU.S.Average

Source: Census Bureau

2006 Home Value to Income Ratios

0

2

4

6

8

10

San Jose LosAngeles

NewYork

ModestoPortland U.S.Average

Home Value Divided by Family Income

Source: Census Bureau, HUD

Urbanized Area Population Density

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

LosAngeles

San JoseNewYork

ModestoPortlandU.S.Average

People Per Square Mile

Source: Census Bureau

Growth-Management

PlanningEfforts to control the rate and/or the location of future growth.

$933,000 in London

•LAFCos•CEQA•Planning/Appeals

Why Is California Housing So Expensive?

Urban Growth Boundary

Rule: Housing will remain affordable as long as developers have access to vacant, unregulated land outside of city limits

95%5%

Rural Develop-ments 0.9%

Farms & Open Space 94.5%

Cities and

towns 4.6%

Source: USDA, 1997 Natural Resources Inventory

Private property is "an institution that communities reshape over time to promote evolving goals."

—Eric Freyfogle

New York City’s historic preservation "law embodies a comprehensive plan to preserve structures of historic or aesthetic interest wherever they might be found in the city"

—Justice Brennan, PennCentral

New London had "carefully formulated an economic development plan that it believes will provide appreciable benefits to the community"

—Justice Stevens, Kelo v. New London

"The taking occurred in the context of a comprehensive development plan."

—Justice Kennedy, Kelo v. New London

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

Population Per Square Mile

Density and Commuting

Source: 2000 Census

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

Population Per Square Mile

Density and Commuting

Source: 2000 Census

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

Population Per Square Mile

Density and Commuting

Source: 2000 Census

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

Population Per Square Mile

Density and Commuting

Source: 2000 Census

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

Population Per Square Mile

Density and Commuting

Source: 2000 Census

Demand

Supply

Housing Supply & Demand

Quantity

Demand

Supply

Housing Supply & Demand

Quantity

“Government regulation is responsible for high housing costs where they exist.”Edward Glaeser & Joseph Gyourko

The Planning Penalty

• Added cost per median-valued home

• $165,000 in Modesto• $316,000 in Los

Angeles• $513,000 in San Jose• $850,000 in San

Francisco-Oakland area

The Total Annual Penalty• Added cost to all people who

bought homes in the nation, state, or region during 2005

• $136 billion in California• $275 billion in U.S.A.

Total Annual Planning Penalties(billions of dollars)

1364

3

MA 15RI 2CT 6NJ 17MD 3DC 11

17

8

2

6

3

235

1

>$1 billion<$1 billion$0 Other factors

• More volatile prices• Declines in employment and income• Ensures that only affluant people can afford to live in a region• “Boutique city catering only to elite”

Black Elected Officials in the South

0

4,000

8,000

12,000

16,000

20,000

1963 2003

Black Per-Capita Income as Percent of White

0

20

40

60

80

100

1963 2003

United States Homeownership Rates

0

10

20

30

40

50

60

70

80

90

100

White Hispanic Black

Percent

“In sprawled areas, black households consume larger units and are more likely to own their homes.”

Matthew E. Kahn

“Had Portland's policies been applied nationwide over the last 10 years, over a million young and disadvantaged families, 260,000 of them minority families, would have been denied the dream of home ownership.”

Randall Pozdena

The New Segregation

Solutions Worse Than the Disease

• Inclusionary Zoning • Subsidies to Low-Income Housing • Rent controls • Tax-increment financing

These practices reduce housing costs for a small minority by driving up the cost of housing and/or taxes for everyone else

“Inclusionary zoning produces few units. After passing an ordinance, the average [Bay Area]city produces fewer than 15 affordable units per year.”Powell & Stringham

“Inclusionary zoning makes other homes more expensive. We estimate IZ causes the price of new homes in the median city to increase by $22,000 to $44,000.”Powell & Stringham

“New housing production drastically decreases the year after cities adopt inclusionary zoning. . . . New construction decreases 31 percent.”Powell & Stringham

“Price controls fail to get to the root of the affordable housing problem. . . . The real problem is government restriction on supply.”Powell & Stringham

“If policy advocates are interested in reducing housing costs, they would do well to start with zoning reform.”Edward Glaeser & Joseph Gyourko

Ban Government Planning

• Repeal LAFCos, CEQA, and other state planning laws• Shut down city planning• Replace planning with: • User fees • Markets • Mission-specific agencies

Protecting

freedom,

mobility, and

affordable

homeownership

Recovering from

Planning

San Jose, CA

November 10–12,

2007

Land Use Without

Zoning

Houston, TX

May 16–18, 2008

For more information:

Web sites:

ti.org

cato.org

americandreamcoalition.org

E-mail: rot@ti.org