Silicon Valley's Affordable Housing Glut

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It's a madly kaleidic and unpredictable world, and even the wisdom of government housing planners apparently can't keep up. The San Jose Mercury News reports today that

In Silicon Valley, the nation's least affordable housing market, hundreds of subsidized apartments built during the boom are sitting empty because developers can't find seniors and other low-income tenants to rent them.

The main reason: Rents in the region have plunged as the economy sagged, allowing some low-income renters to find deals nearly as good or better on the open market.

As the article goes on to explain, this subsidized housing, mostly intended for "seniors and renters at the higher end of the low-income scale," isn't even an option for poorer large families. Why subsidize housing only for those types? "Developers have been drawn to build senior housing because it is less controversial than other low-income housing and more likely to be approved by neighbors and the city council."

The whole article is worth reading. Thanks to Adrian Moore of the Reason Public Policy Institute for the link.

NEXT: Testing Our Patience

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  1. Take the next step, Brian. Come out against the large lot single family zoning that makes affordable housing programs necessary.

  2. There are no seniors in Silicon Valley / San Jose. They all moved here, to Reno, where they spend the days playing bumper cars on the streets, mobbing casino restaurants for the early bird specials, and calling the police when their neighbors’ lawns aren’t lush enough.

  3. Joe-

    I’m going to spare some other posters the trouble and explain in their words why those zoning laws are OK.

    “Sure, those zoning laws wouldn’t exist in an ideal world. But some of us just want to move our families to nice places. Since the government has already ruined the big cities and made all the people in them impossible to live around, I won’t complain if they make some neighborhoods unaffordable for the riff-raff. I mean, really, do you actually want some of those low-income families living in your neighborhood? Anyway, as soon as the government lifts the environmental protection laws that make it impossible for me to build my dream home on the former nest of a California condor (far away from all the undesirables that the government subsidizes in the big cities) I’ll support ending the zoning laws that inflate the cost of housing and keep the riff-raff away from me. Besides, the main reason for the housing shortage is not the zoning laws, it’s the waves of immigrants that the government won’t crack down on.”

  4. For the record, the above was satire of some of the more extreme right-wing viewpoints I occasionally encounter.

  5. “Come out against the large lot single family zoning that makes affordable housing programs necessary”

    So zoning restrictions interfere with the real estate market, nothing new there…

    What I fail to see is how this necessitates even more intervention.

    Obviously you and I have very different ideas about what is “necessary”.

  6. joe:

    No expert here. I gather from your comments that some areas are zoned for “large lot single family” homes. You are indicating that such zoning restricts the supply of land, which drives up the price beyond what many can afford, is that right?

    Lets agree to drop all zoning. People wouldn’t have houses with yards? I guess what I’m getting at is that zoning is a distortion of the market for land, but the extent to which this specific zoning effects the price of land has to do with the amount of zoned land in comparison to demand for single family plots. My feeling is that many people, myself included, have an effective 0 demand for multi family dwellings. Plotting in the absence of the zoned allotment might not look too much different for that reason. People like the ‘burbs.

    Out of curiosity, what is a ‘large lot’?

  7. Where are these large-lot zoning places? I haven’t seen a new development in 5 years that wasn’t gawdawful cookie-cutter rowhouses or McMansions on a quarter-acre lot.

  8. Jason, Sandy – Joe is living in some fantasy world where everyone really, really wants to live in a ratcage apartment with a homeless shelter next door so they can ride covienent trains and busses with the rest of the unwashed masses. If only the zoning laws would allow it!

  9. Joe-

    The market’s taking care of it. In the last several years many lots in the .25 acre range have had the existing houses bulldozed and replaced by housing that is much higher density. Couple of beautiful old victorians included in my neighborhood. The Idea that the single family home be zoned out of existence strikes me as problematiacl on many levels. How about if we mandate that being “low income” is unacceptable. If you don’t currently make enough you have to get a night job, or sell your kidneys or something. That way you can get your single family on a large lot.

    What? You don’t think I should be able to legislate you’re lifestyle?

    Mudflap

  10. quarter acres and up are usually considered “large lot.”

    Jason, snob zoning both restricts the number of homes that can be built, and necessetates the construction of more expensive homes. Double whammy.

    There are choices other than “large lot single family” and “apartment house.” For example, row houses, townhouses, small lot single family (you can get a two car driveway, 1800 square foot house and decent back yard on 4000 square feet), condos of various shapes and sizes…types of homes that have commanded high prices in well designed New Urbanist developments.

    “People like the burbs.” People like safe, attractive, orderly, prosperous, pleasant neighborhoods, in towns with good services and schools. There is nothing inherent in large lot single family zoning that makes them more likely to be this way than traditional neighborhoods. Newer surburbs tend to be safer, etc, than older urban neighborhoods for a variety of reasons. But if single family homes on large lots was the key to neighborhood quality, South Central LA would be one of the best neighborhoods in America, and Old Town Savannah one of the worst.

  11. “”Developers have been drawn to build senior housing because it is less controversial than other low-income housing and more likely to be approved by neighbors and the city council.””

    Senior housing is popular because there’s no meddling kids. So the city gets the taxes, without adding to the load on the schools. And the neighbors don’t have to put up with those bad, bad kids from the wrong side of the economic tracks.

  12. Wow, it’s been at least 3 weeks since we did this. I’m not sure how vacant subsidized dense housing indicates that the sum total of market distortion results in anything but too much dense housing.

    Some people want to live in a house with a yard, and will do what it takes to do so. You can tell either by asking them, or by the fact that many people spend the bulk of their income to do so.

  13. 1/4 acre is large lot? Jeebus, you’re nuts!

  14. Actually people have already shown their desire for bigger yards or single family homes in Silicon Valley by buying homes in Pleasanton, Gilroy, Tracy or even further out and then driving 2 hours each way to work.

    Its rather distressing as a libertarian to actually comment that the biggest problem in the valley is a lack of proper planning and higher level control over issues such as transportation and planning. The valley is filled with small to medium sized cities that all make decisions based on what is best for their local residents rather than what is best for the region. The result is terrible public transportation, long delays in adding new freeways or local mismanagement of major roads. My only consolation is the knowledge that if stronger central planning existed, they would still screw it up.

  15. “The result is terrible public transportation, long delays in adding new freeways…”

    Perhaps the state level central planning being adamantly opposed to new feeways has something to do with that. Gray Davis promised not ot allow a single new lane of freeway to be built on his watch at one point.

  16. I have a great deal of experience with subsidized housing. All through colledge the only apartments I could afford were adjacent to subsidized apartments/houses. Right now my wife and I are both in graduate school and can only afford rent in a place next to a subsidized block of housing. The police are there every night for a drunken domestic call. What kills me is that every SOB in the place has a nicer car than mine. I guess I’m helping foot the car payments. When my wife graduates later this year we are moving far far away from any kind of subsidized housing and the trash therein.

  17. Matt – you mean, of course, that you are going to be FORCED to “move far far away” by immoral zoning laws.

  18. I was a bit baffled by this phenom, too, and figured that it would be used to condemn the whole policy of low income housing. Since I’m no expert on California housing policy, I went to a friend who was. He had no time to go into detail, but FWIW, here is his response:

    “we use housing $ to build new low-rent housing, because new units look good for politicians and developers and consultants (and nonprofits) make money.

    Problem is that we build them right at the edge of affordability; we can’t afford to write down the rents any lower.

    So when a housing market collapses, we wind up with market rents at or below ‘affordable’ rents.

    I’ve argued for years that we ought to be buying and rehabbing units, and locking in low rents as rents tren[d] upward, rather than building them – we can buy 2 – 4 units for every unit we build.

    Make sense?”

    If one reads the article, you will see that there are different stratifications within the definition of “affordable.” There is moderately low income (say, your secretary), low income (think your office receptionist), and low-low income (think your gardener). The units referred to in the article apply mostly (if not only) to the mod category, not the low and low-low.

    If one were to measure the housing densities in SJ now, I suspect that they would see plenty of need at the two categories for which no to insufficient housing is available. Too bad they didn’t build more of those.

  19. I think joe’s argument is that zoning is essential to the housing market, so long as he gets to control the zoning.

    This generations’s zoning fad (high density, mixed use, New Urbanism) is the very definition of the neighborhood that the last generation’s central planners tore down as incompatible with their preferences. Next generation’s central planners will have their own fad, no doubt requiring that both suburbia and new urban neighborhoods be altered.

    The main thing, you see, is to keep central planners employed.

  20. Yep, I knew it, got a post complaining about the “unwashed masses.”

  21. Admitting my ignorance here:

    I know FYI, BTW, IM(H)O and OTOH, but what’s FWIW??

  22. FWIW = For What It’s Worth

  23. “For what its worth” is my assumption.

  24. In my experience, quiet one, people who move two hours away from their job in a major employment center are motivated by housing costs rather than yard sizes. Housing costs that are driven up by a zoning-created undersupply.

    M sez: “The market’s taking care of it. In the last several years many lots in the .25 acre range have had the existing houses bulldozed and replaced by housing that is much higher density.” Wonderful. This is how it should work. Except that in areas with single family, 10,000 square foot zoning, you’re not allowed to do what the market is clamoring for.

    That’s the point: snob zoning creates an affordable housing crisis. Then, because the snobs who live in the zoned area refuse to allow people to do what they want with their land if it involves letting the unwashed masses move in (PLC, JDM), the government goes with an inferior Plan B – the Rube Goldberg affordable housing policy defined in the article.

  25. In my experience, quiet one, people who move two hours away from their job in a major employment center are motivated by housing costs rather than yard sizes.

    Well, yeah, except that they are concerned with finding housing that they want and that they can afford. Looking only at the affordability side leads you to ignore the fact that there are probably housing options available to them closer to their jobs at prices they can afford, except that they do not want the kind of housing that they can afford closer to their jobs.

    For example, when I worked in Boston, there were any number of grody dive apartments in run-down neighborhoods (or worse) that were closer to downtown than the flat I actually rented an hour from my job. This nearby housing would keep me warm and dry, but it wasn’t housing that I was interested in even though it was cheaper and closer to my job.

  26. “Except that in areas with single family, 10,000 square foot zoning, you’re not allowed to do what the market is clamoring for.”

    And without Urban Growth boundaries etc., it is impossible to make the housing many people want expensive enough to force them to clamour for a condo. And without assanine transit policies (many continued in spite of voter referenda to repeal them,) it is impossible to make them less desirable through artificially increased traffic problems.

    “because the snobs who live in the zoned area refuse to allow people to do what they want with their land if it involves letting the unwashed masses move in (PLC, JDM)”

    I, for my part, have spent countless hours manning the fences to keep out the darkies.

  27. In addition to snob zoning, we have myriad other codes like persons-per-bedroom and parking-per-dwelling-unit that make it hard for the poor to find living arrangements which they can pay for.

    Those who migrate to New-Urbanist utopias are already wealthy enough to self-select into well-behaved clumps. The living arrangements are dense, but the cost is still high enough to keep out the poor.

    I imagine there’s some relation between receiving housing subsidies and being a bad neighbor. If a person is busting his ass at two jobs and selling a kidney of the weekends in order to pay market rent, he probably doesn’t have the energy to be much of a troublemaker.

  28. “And without Urban Growth boundaries etc., it is impossible to make the housing many people want expensive enough to force them to clamour for a condo.”

    No UGBs in Greater Boston, just lots of land zoned large-lot-single-family, and one of the country’s worst affordable housing crises.

    Should I interpret “artificially created traffic problems” as “refusal to spend tax dollars on the highway projects I want?” Gee, that is artificial.

    RC, good point about the quality of housing. I note, however, that you rented a flat in an apartment building, which leads me to believe it was not the style of housing that was the problem, but the quality of the neighborhood. Aparently, the multifamily neighborhood you settled in was nicer than, say, Dorchester, which has the lowest density of any neighborhood in Boston and among the highest % of single family homes.

    Anyway, you should look at some of those bad areas today. You would not believe what those places are getting for rents, and how far (some of) the formerly bad areas have come.

  29. “Should I interpret “artificially created traffic problems” as “refusal to spend tax dollars on the highway projects I want?” Gee, that is artificial.”

    You should interpret it as a stated goal of many New Urabanists. Purposfully creating congestion to force people to move to denser areas, and use transit. You folks actually publish this viewpoint on the web.

    “No UGBs in Greater Boston, just lots of land zoned large-lot-single-family, and one of the country’s worst affordable housing crises.”

    There are no housing market distortions other than the large lot zoning around Boston? It’s a wonder the Free State project didn’t choose Massachusettes.

    I imagine there are plenty of ways the market is skewed against further large lot development, but I don’t expect you to point them out, which is my point. I’m sure you know them better than I do. Why don’t you stop pretending that you are looking for a market which allows people to express their preferences, and just go back to arguing why we should be restricted from the preferences we have? You’ll feel better.

  30. There have been studies done of housing preferences. Most people, when asked to describe their ideal home, describe a large lot single family home in a subdivision. But when shown pictures of different neighborhoods, the most popular ones are traditional neighborhoods, with smaller lots, houses closer to (and facing on) narrow streets, even corner stores.

    Perhaps the ideal is to own a 2 acre spread in the middle of a neighborhood of 6000 square foot lots, so you can have the walkable character and the softball field in your back yard. Or perhaps people describe the type of neighborhood they consider most likely to be a “good neighborhood,” but when shown an urban neighborhood that is a good neighborhood (neat, well kept, no bullet holes or crackheads), their true preference emerges.

    Oh, and jobs are no longer concentrated in central cities. The average American now commutes from suburb to suburb. We don’t need to change zoning to allow offices and factories in the suburbs (they’re already there, out by the highway), we need to change zoning to allow corner stores, pubs, diners, and carriage house apartments (yay!) in those suburbs’ residential neighborhoods.

  31. Traffic congestion is not caused by New Urbanists, who make up a vanishingly small percentage of the commuter population. Traffic congestion is caused by too many people driving to work on the same road. What we argue is that the tax dollars you would like to see spent on rescuing commuter commandos from their decision to move 2 hours away from their jobs, could be better spent on other things. I’m not sure you realize this, but “the right not to touch my brakes on the way to work” isn’t actually enumerated in the Declaration of Independence.

  32. People want to live “distributed”. People want big houses placed on large green patches – in a sense, it is what we were born to. The reason we live in apartments clustered around downtowns or commute two hours from the burbs to downtown is that most of the jobs are in said downtown. Yeah, lift “large lot zoning” restrictions – lift all of them, and let developers build industrial and commercial out in the burbs. The problem isn’t that the housing isn’t concentrated enough, it is that the jobs are too concentrated. Let the urbans sprawl, and extend it with employment spawl. Maybe, just maybe, we can convince people to live close to work if we allow decent housing close to work, or more exactly work close to decent housing.

  33. rvman: People want to live distributed, I agree. I disagree with subsidizing that choice through taxpayer-funded highway and sewer construction.

    Some jobs are necessarily concentrated. There are not so many distributed factories. Even as much as I like the idea of telecommuting to avoid the traffic issues, people like to work around other people.

    If the zoning would allow me to build a 4-unit-efficiency “carriage house” on the back half of my 5000ft lot, I wouldn’t have to work at all.

  34. EMAIL: sespam@torba.com
    IP: 62.213.67.122
    URL:
    DATE: 01/21/2004 09:55:22
    Truth is not determined by majority vote

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