Two areas I would be interested to see more research on
1. Significant Transportation funding going directly to cities and regional governments for transit infrastructure with minimum zoning thresholds on funded corridors
2. Reform of FHA mortgage restrictions to make it more amenable to multifamily buildings
Two areas I would be interested to see more research on
1. Significant Transportation funding going directly to cities and regional governments for transit infrastructure with minimum zoning thresholds on funded corridors
2. Reform of FHA mortgage restrictions to make it more amenable to multifamily buildings
You see a lot of policy responses in this thread and in general to reduce red tape and provide incentives for completing work. This is all well and good, but I think people underestimate how slow these projects move. For ground truth, everyone just relies on the ACS survey updated once a year, and by the time the trends trickle down to construction companies and builders, theyre playing catch up to where people have already moved, starting years behind.
I think it's a perfect use case for an open-source federal data platform on people movement throughout the US. Interstate travel is a constitutional right, so we should help track it and make the data available specifically to both states and industry parties. Getting the main actors on the same page is such an important part of getting approvals and avoiding pitfalls when starting a new construction project. It also would be especially helpful as the construction industry has pretty low uptake of modern tech esp when it comes to analytics. Shameless plug for longer response to the FAS challenge in recent post on my page
Reform the IRS's treatment of presold condominium units by expanding the definition of "Home Construction Contract" in IRC §460 to include any and all real property intended for residential use. This would limit developer income tax liability for under construction and undelivered condos and make condo development more competitive with apartment development. Congress could also considered creating a property tax revenue replacement program to incentivize states/municipalities to create property tax exemptions for unoccupied new construction residential real estate inventory.
Require sufficient soundproofing in multi-family buildings. Now, people try hard to avoid them due to unlivable neighbor noise and the nasty disputes that it leads to.
This most recent call for “best ideas on increasing housing supply” ties together nicely with the various YIMBY victory laps regarding their California legislative “victories” and Reihan Salam’s critique of YIMBY righteousness.
California YIMBYs celebrated the passage of SB 9 (lot splits/duplexes) and SB 6 (residential development in commercial zones), yet neither will result in a significant increase in housing supply, at least in Los Angeles.
SB 9 imposes an owner occupancy requirement as a condition of approving a lot split, and excludes from its provisions properties where a tenant has resided the past three years. Developers, investors, and speculators are far more likely than individual resident homeowners to split lots and build a pair of duplexes. Similarly, properties already held for investment purposes (i.e., rentals) are far more likely to be exploited for lot splitting and adding units. So SB 9 removes from the pool the individuals/entities most likely to take advantage of its provisions and further removes from the pool the properties for which SB 9 would most likely be utilized.
Meanwhile, SB 6 (and its companion AB 2011) either directly or indirectly impose union labor requirement on all projects that seek to utilize its provisions, thus ensuring very little construction will result from these reforms. Contrast SB 6 with Los Angeles’s transit oriented development reforms, which do not impose a union labor requirement and which have resulted in mini multi-family construction boom.
So we have YIMBYs taking victory laps over the performative but ineffective SB 8/SB 9 and the well-intended but ineffectual SB 6/AB 2011. And then calling for complicated federal level solutions to increase housing supply.
Meanwhile, YIMBYs ignore the largest single impediment to the construction of abundant housing in the City of Los Angeles: the combination of (1) rent control and (2) just cause eviction regulations – NIMBYism for incumbent tenants.
With that as background, here is my “best idea” for increasing housing supply in Los Angeles:
• Eliminate rent control and just cause eviction regulations.
• Permit unconditional “by rights” construction of multi-family housing in all R4 zones – the only requirement to obtain entitlements is that the structure be allowed under R4 zoning. Among other things, this means no union labor requirements and no affordable unit requirements.
• Affirmatively rezone selected commercial corridors to include R4 zoning (essentially make permanent and explicit LA's recent reforms in that regard, but eliminate ground floor commercial use requirements).
• As a bonus to yield even more housing, upzone all R3 zones to R4.
YIMBYs worked hard to pass SB 9 and AB 2011, making undesirable compromises (the owner requirement in SB 9's lot split and the prevailing wage labor requirement in AB 2011) in order to get the legislation passed. You say those provisions make the legislation worse, which they certainly do, but then you propose an upzoning that would be even more unpalatable to the people who forced the compromises in SB 9 and AB 2011. Every single YIMBY would want the LA upzoning you suggest! What is your plan to get it enacted? Who is the constituency for your plan? You propose linking the upzoning with a removal of rent control, so you've just jettisoned many YIMBYs. Who are you bringing into your coalition with the rent control removal? Not NIMBYs; they hate your upzoning plan.
I'm optimistic that we'll get an SB 9 cleanup bill in a year or two that gets rid of the ownership requirement for lot splits. That's the way it works; we squeeze the door open, and then in a later year we push through it.
Preliminarily, the key to the effectiveness of my proposal is not the upzoning, it’s (1) the elimination of rent control and just cause-eviction plus (2) by-rights entitlements in R4 zones. Los Angeles doesn’t need upzoning to build more apartments; rather it needs to allow the building of apartments in areas already zoned for apartments.
A sidebar – yes, the rezoning of commercial to R4 can work without eliminating rent control/just cause eviction but it’s already happening in Los Angeles b/c of Los Angeles’s TOD reforms, so the rezoning will only help on the margins. Regardless, I’m not sure NIMBYs would vociferously oppose this particular zoning reform.
In any event, at least in Los Angeles, the low-hanging fruit for increasing the housing supply is to build higher density apartments in neighborhoods (1) already zoned for high density apartments (i.e., R4 zones) and (2) where apartments already exist. Right now, that is economically difficult to nearly impossible because of the combination of rent control and just cause eviction. That is what I propose to change. As to constituency, how about some outreach to business, currently invisible in YIMBY circles?
ADUs are not going to solve the housing crisis. We need to build apartments. From an urban planning perspective, it makes far more sense to build apartments where they already exist (the infrastructure, transit and traffic patterns, and supporting commerce are already there) rather than in greenfield SFR neighborhoods. And while politically it may be difficult to implement my proposal, it will be far easier than upzoning R1 to R4.
This is a very unformed idea, but if we start from the premise that a major source of NIMBY sentiment is incumbent homeowners wanting to protect their primary source of wealth, the federal government should adjust the tax code to discourage building wealth this way and encourage more pro-social alternatives (such as index funds). This would most likely piss off almost everyone, but some big structural changes are needed to gain momentum in a better direction.
Take advantage of negative polarization to do some good. Create a scheme called the “President Trump American Community Award” that gives high marks for cities with restrictive zoning. Then put up billboards in the “winning” cities congratulating them for making life tough for immigrants.
There are lots of things that would work, but the list of options that don’t slay sacred cows is much shorter.
In short, the problem isn’t the ability to develop innovative ideas in this space, the problem is overcoming all the political obstacles that favor the status quo.
Good question! I'm so enamored of getting rid of the mortgage deduction that I reflexively citied this idea even though, as you hint, there's no obvious way it would increase the supply of housing. My bad. But let's try.
Clearly, getting rid of the interest rate deduction would lower housing prices in ownership areas, because the owners would no longer be able to lower their effective cost by deducting their mortgage.
Also, getting rid of the interest deduction would make make renting more appealing versus buying that it is now, because the owner wouldn't be able to deduct part of their cost. And then once we've got a mass of middle-class renters, when those renters become empty nesters or retirees, or when their life changes in some way, they'll be more interested in continuing to rent rather than buying, because they have less financial attachment to their homes.
These middle-class renters would have political power. So when they got to the life stage where they preferred a more dense alternative to a single family home, there would be political pressure to allow those more dense alternatives, in the same areas where they live now. This, combined with the political power of existing renters, would mean a bigger constituency for loosening local regulations that now don't allow housing to be built, particularly in single family areas. And at the same time, single family homes would become cheaper for developers to buy and turn into multifamily homes.
So then when an existing homeowner in a single family home sold their house, it would be more likely to be snapped up by a developer and turned into, say, a fourplex.
Why is it good to encourage more renting? Current tax law allows owners of rental property to deduct interest expense. Why shouldn't owner-occupants enjoy the same benefit?
As to why it is good to encourage more renting, I didn't say it was good. I said that if the mortgage interest deduction were eliminated, it would encourage more renting. That's a positive statement, not a normative statement.
It's not the same. Landlords are running a business, with business deductions *and business revenue*. Landlords can deduct their interest expense, but the rental income counts as income.
If owners wanted to pretend they were renting to themselves, they could deduct their mortgage, but then they would also have to count the imputed rent to themselves as income.
Seems to me that there are three main issues: (i) construction financing, (ii) defect litigation and (iii) purchaser financing.
A result, at least in my neighborhood which has been upzoned, is that when SFH owners decide to make an investment in their land, it's usually by splitting the parcel into two SFHs rather than use the new zoning to create ~6 condo units. (I have no data behind this.) Individual owners often aren't prepared to deal with the financing and litigation issues mentioned in that article, nor are they able to handle delayed purchasing of units. They want to invest, construct and get out.
Posted this as a stand alone comment, but there is also the tax treatment of of developer owned condo units:
Reform the IRS's treatment of presold condominium units by expanding the definition of "Home Construction Contract" in IRC §460 to include any and all real property intended for residential use. This would limit developer income tax liability for under construction and undelivered condos and make condo development more competitive with apartment development. Congress could also considered creating a property tax revenue replacement program to incentivize states/municipalities to create property tax exemptions for unoccupied new construction residential real estate inventory.
>when SFH owners decide to make an investment in their land, it's usually by splitting the parcel into two SFHs rather than use the new zoning to create ~6 condo units
I have repeatedly attempted to explain to YIMBYs why this is/why upzoning SFH neighborhoods in general is not going to do very much. Background, I have actually worked in the commercial real estate industry. It generally doesn't make financial sense for developers to try to stuff a multi-unit building on what was previously an SFH lot. Yes, they could maybe eek out a small profit, but developers are busy and there are so many projects, so they'd generally rather focus their time on something more profitable. If you want to retort 'but in some neighborhoods I've seen 4+ unit buildings on lots that are SFH-size in my neighborhood'- yes, they were probably built 80+ years ago.
I've linked a Bay Area newspaper article here a couple of times where the reporter tried to answer your question, by interviewing actual Bay Area developers. (Have you ever noticed how few people work in the actual industry are part of the YIMBY movement? No lack of economists and software engineers who do lots of theorizing though!) I'm too lazy to find it now, but basically all of the developers and architects interviewed said 'there's too little/no profit to building a weird narrow 4 unit on an previous SFH lot. I have more profitable projects to work on'
This is the point. Most land that is viable for adding housing units is owned by SFH owners, not developers/architects. If you're serious about increasing housing supply, I'd think you'd want to make the path easier for SFH owners who are interested.
This is so true, at least in California. Real estate developers are, for all intents and purposes, invisible in the YIMBY coalition. It appears that the movement doesn't welcome (or at least doesn't seek out) the views of those that would actually build the housing the YIMBYs claim to desire. SB6/AB 2011 are a consequence of this - well intended but destined to be minimally effective.
You may be underestimating the difficulty of getting anything passed in California. Legislators frequently have to make undesirable compromises. What in particular do you think are the fatal problems with AB 2011?
AB 2011 is less of an issue with respect to market rate housing because of its express focus on affordable housing. Nonetheless, a couple points:
For the 100% affordable projects enabled by AB 2011, all the economic constraints inherent in affordable housing development remain. Adding prevailing wage requirements only increases the economic burden. While AB 2011 may increase the viability of these projects at the margin, I doubt it will result in a construction boom.
For the mixed income projects enabled by AB 2011, the affordable housing element increases the cost of development. Adding prevailing wage requirements on top of that (plus requiring health benefits for projects of 50 units or more) increases the economic burden further. Because of these cost burdens, AB 2011’s mixed income housing provisions will result in an immaterial amount of market rate housing construction, contrary to the victory laps taken by YIMBY activists.
It remains to be seen how much AB 2011 will juice housing, but do not overlook the cash value of ministerial approval. Time is money, and money saved by not having endlessly pay architects for yet another redesign and endlessly pay men in well-tailored suits to defend your project in endless meetings is also money. Not having to pay for CEQA analysis, and not having to face endless bad faith CEQA lawsuits, is an enormous savings. Yes, the developer has to pay their workers more, but they save a huge amount with the speed and certainty provided by AB 2011. And a lot of these projects don't have to provide parking, though I suspect that in the expensive areas where AB 2011 makes sense, some parking will be built anyway.
This is where YIMBYs can benefit from input from market rate housing developers and, dare to dream, welcoming them as coalition partners. I am well aware and in no way am overlooking the benefits of by-rights development. Nonetheless, my prediction is that very little market rate housing will be built using AB 2011. The combination of requiring an affordable housing element plus prevailing wage requirements (and health benefits for large projects) will make projects cost-prohibitive except in very high rent areas. In Los Angeles specifically, I expect almost no AB 2011 construction because it will be cheaper and easier to rely on LA's TOD regime.
- Federal loan program specifically for SFH > condo conversions.
- Change FHA rules to eliminate requirements for owner occupancy, max percent FHA financing per building, ownership concentration limits, and no-litigation condition.
- Federal loan program specifically for condo purchasers w/r/t new construction.
- Some kind of federally financed defect mitigation "insurance" pool for new condo construction that benefits GCs that meet certain criteria. Could have a pay-in structure which increases each time the GC needs to access the pool, incentivizing GCs to do good work.
Doesn't seem like any of these categories relate to expanding the pool of trade workers which is a big problem in some (many) markets.
Building code reform could be a blue ribbon commission opportunity? Most other countries' building codes are legislated or run out of quasi-public agencies, where as the ICC is a private industry trade group, and the "international" in the building code applies to the US, and a couple latin american and persian gulf countries. Canada doesn't have it's own baseball league, but even they have their own building code.
The affluent suburbs engage in hypocrisy where they restrict new housing through elaborate bureaucracy and then have DEI teams bragging about inclusion. They’re all full of shit!
Should schools offering a Master's in public policy (and summer school classes) be urging their students to come up with a proposal?
Two areas I would be interested to see more research on
1. Significant Transportation funding going directly to cities and regional governments for transit infrastructure with minimum zoning thresholds on funded corridors
2. Reform of FHA mortgage restrictions to make it more amenable to multifamily buildings
Two areas I would be interested to see more research on
1. Significant Transportation funding going directly to cities and regional governments for transit infrastructure with minimum zoning thresholds on funded corridors
2. Reform of FHA mortgage restrictions to make it more amenable to multifamily buildings
You see a lot of policy responses in this thread and in general to reduce red tape and provide incentives for completing work. This is all well and good, but I think people underestimate how slow these projects move. For ground truth, everyone just relies on the ACS survey updated once a year, and by the time the trends trickle down to construction companies and builders, theyre playing catch up to where people have already moved, starting years behind.
I think it's a perfect use case for an open-source federal data platform on people movement throughout the US. Interstate travel is a constitutional right, so we should help track it and make the data available specifically to both states and industry parties. Getting the main actors on the same page is such an important part of getting approvals and avoiding pitfalls when starting a new construction project. It also would be especially helpful as the construction industry has pretty low uptake of modern tech esp when it comes to analytics. Shameless plug for longer response to the FAS challenge in recent post on my page
Bully the supreme court into ruling that the federal government can abrogate state housing laws, since housing is a (somewhat) national market.
Commerce clause go BRRR
Reform the IRS's treatment of presold condominium units by expanding the definition of "Home Construction Contract" in IRC §460 to include any and all real property intended for residential use. This would limit developer income tax liability for under construction and undelivered condos and make condo development more competitive with apartment development. Congress could also considered creating a property tax revenue replacement program to incentivize states/municipalities to create property tax exemptions for unoccupied new construction residential real estate inventory.
Require sufficient soundproofing in multi-family buildings. Now, people try hard to avoid them due to unlivable neighbor noise and the nasty disputes that it leads to.
This most recent call for “best ideas on increasing housing supply” ties together nicely with the various YIMBY victory laps regarding their California legislative “victories” and Reihan Salam’s critique of YIMBY righteousness.
California YIMBYs celebrated the passage of SB 9 (lot splits/duplexes) and SB 6 (residential development in commercial zones), yet neither will result in a significant increase in housing supply, at least in Los Angeles.
SB 9 imposes an owner occupancy requirement as a condition of approving a lot split, and excludes from its provisions properties where a tenant has resided the past three years. Developers, investors, and speculators are far more likely than individual resident homeowners to split lots and build a pair of duplexes. Similarly, properties already held for investment purposes (i.e., rentals) are far more likely to be exploited for lot splitting and adding units. So SB 9 removes from the pool the individuals/entities most likely to take advantage of its provisions and further removes from the pool the properties for which SB 9 would most likely be utilized.
Meanwhile, SB 6 (and its companion AB 2011) either directly or indirectly impose union labor requirement on all projects that seek to utilize its provisions, thus ensuring very little construction will result from these reforms. Contrast SB 6 with Los Angeles’s transit oriented development reforms, which do not impose a union labor requirement and which have resulted in mini multi-family construction boom.
So we have YIMBYs taking victory laps over the performative but ineffective SB 8/SB 9 and the well-intended but ineffectual SB 6/AB 2011. And then calling for complicated federal level solutions to increase housing supply.
Meanwhile, YIMBYs ignore the largest single impediment to the construction of abundant housing in the City of Los Angeles: the combination of (1) rent control and (2) just cause eviction regulations – NIMBYism for incumbent tenants.
With that as background, here is my “best idea” for increasing housing supply in Los Angeles:
• Eliminate rent control and just cause eviction regulations.
• Permit unconditional “by rights” construction of multi-family housing in all R4 zones – the only requirement to obtain entitlements is that the structure be allowed under R4 zoning. Among other things, this means no union labor requirements and no affordable unit requirements.
• Affirmatively rezone selected commercial corridors to include R4 zoning (essentially make permanent and explicit LA's recent reforms in that regard, but eliminate ground floor commercial use requirements).
• As a bonus to yield even more housing, upzone all R3 zones to R4.
That’s it. Simple and effective.
YIMBYs worked hard to pass SB 9 and AB 2011, making undesirable compromises (the owner requirement in SB 9's lot split and the prevailing wage labor requirement in AB 2011) in order to get the legislation passed. You say those provisions make the legislation worse, which they certainly do, but then you propose an upzoning that would be even more unpalatable to the people who forced the compromises in SB 9 and AB 2011. Every single YIMBY would want the LA upzoning you suggest! What is your plan to get it enacted? Who is the constituency for your plan? You propose linking the upzoning with a removal of rent control, so you've just jettisoned many YIMBYs. Who are you bringing into your coalition with the rent control removal? Not NIMBYs; they hate your upzoning plan.
I'm optimistic that we'll get an SB 9 cleanup bill in a year or two that gets rid of the ownership requirement for lot splits. That's the way it works; we squeeze the door open, and then in a later year we push through it.
Preliminarily, the key to the effectiveness of my proposal is not the upzoning, it’s (1) the elimination of rent control and just cause-eviction plus (2) by-rights entitlements in R4 zones. Los Angeles doesn’t need upzoning to build more apartments; rather it needs to allow the building of apartments in areas already zoned for apartments.
A sidebar – yes, the rezoning of commercial to R4 can work without eliminating rent control/just cause eviction but it’s already happening in Los Angeles b/c of Los Angeles’s TOD reforms, so the rezoning will only help on the margins. Regardless, I’m not sure NIMBYs would vociferously oppose this particular zoning reform.
In any event, at least in Los Angeles, the low-hanging fruit for increasing the housing supply is to build higher density apartments in neighborhoods (1) already zoned for high density apartments (i.e., R4 zones) and (2) where apartments already exist. Right now, that is economically difficult to nearly impossible because of the combination of rent control and just cause eviction. That is what I propose to change. As to constituency, how about some outreach to business, currently invisible in YIMBY circles?
ADUs are not going to solve the housing crisis. We need to build apartments. From an urban planning perspective, it makes far more sense to build apartments where they already exist (the infrastructure, transit and traffic patterns, and supporting commerce are already there) rather than in greenfield SFR neighborhoods. And while politically it may be difficult to implement my proposal, it will be far easier than upzoning R1 to R4.
This is a very unformed idea, but if we start from the premise that a major source of NIMBY sentiment is incumbent homeowners wanting to protect their primary source of wealth, the federal government should adjust the tax code to discourage building wealth this way and encourage more pro-social alternatives (such as index funds). This would most likely piss off almost everyone, but some big structural changes are needed to gain momentum in a better direction.
Take advantage of negative polarization to do some good. Create a scheme called the “President Trump American Community Award” that gives high marks for cities with restrictive zoning. Then put up billboards in the “winning” cities congratulating them for making life tough for immigrants.
There are lots of things that would work, but the list of options that don’t slay sacred cows is much shorter.
In short, the problem isn’t the ability to develop innovative ideas in this space, the problem is overcoming all the political obstacles that favor the status quo.
Get rid of the mortgage interest deduction.
How would eliminating the mortgage interest deduction help increase the supply of housing?
Good question! I'm so enamored of getting rid of the mortgage deduction that I reflexively citied this idea even though, as you hint, there's no obvious way it would increase the supply of housing. My bad. But let's try.
Clearly, getting rid of the interest rate deduction would lower housing prices in ownership areas, because the owners would no longer be able to lower their effective cost by deducting their mortgage.
Also, getting rid of the interest deduction would make make renting more appealing versus buying that it is now, because the owner wouldn't be able to deduct part of their cost. And then once we've got a mass of middle-class renters, when those renters become empty nesters or retirees, or when their life changes in some way, they'll be more interested in continuing to rent rather than buying, because they have less financial attachment to their homes.
These middle-class renters would have political power. So when they got to the life stage where they preferred a more dense alternative to a single family home, there would be political pressure to allow those more dense alternatives, in the same areas where they live now. This, combined with the political power of existing renters, would mean a bigger constituency for loosening local regulations that now don't allow housing to be built, particularly in single family areas. And at the same time, single family homes would become cheaper for developers to buy and turn into multifamily homes.
So then when an existing homeowner in a single family home sold their house, it would be more likely to be snapped up by a developer and turned into, say, a fourplex.
Why is it good to encourage more renting? Current tax law allows owners of rental property to deduct interest expense. Why shouldn't owner-occupants enjoy the same benefit?
As to why it is good to encourage more renting, I didn't say it was good. I said that if the mortgage interest deduction were eliminated, it would encourage more renting. That's a positive statement, not a normative statement.
It's not the same. Landlords are running a business, with business deductions *and business revenue*. Landlords can deduct their interest expense, but the rental income counts as income.
If owners wanted to pretend they were renting to themselves, they could deduct their mortgage, but then they would also have to count the imputed rent to themselves as income.
Trump already capped it!
Should be capped at zero.
Any ideas to solve the problems mentioned here? https://www.urban.org/urban-wire/housing-market-needs-more-condos-why-are-so-few-being-built
Seems to me that there are three main issues: (i) construction financing, (ii) defect litigation and (iii) purchaser financing.
A result, at least in my neighborhood which has been upzoned, is that when SFH owners decide to make an investment in their land, it's usually by splitting the parcel into two SFHs rather than use the new zoning to create ~6 condo units. (I have no data behind this.) Individual owners often aren't prepared to deal with the financing and litigation issues mentioned in that article, nor are they able to handle delayed purchasing of units. They want to invest, construct and get out.
Posted this as a stand alone comment, but there is also the tax treatment of of developer owned condo units:
Reform the IRS's treatment of presold condominium units by expanding the definition of "Home Construction Contract" in IRC §460 to include any and all real property intended for residential use. This would limit developer income tax liability for under construction and undelivered condos and make condo development more competitive with apartment development. Congress could also considered creating a property tax revenue replacement program to incentivize states/municipalities to create property tax exemptions for unoccupied new construction residential real estate inventory.
>when SFH owners decide to make an investment in their land, it's usually by splitting the parcel into two SFHs rather than use the new zoning to create ~6 condo units
I have repeatedly attempted to explain to YIMBYs why this is/why upzoning SFH neighborhoods in general is not going to do very much. Background, I have actually worked in the commercial real estate industry. It generally doesn't make financial sense for developers to try to stuff a multi-unit building on what was previously an SFH lot. Yes, they could maybe eek out a small profit, but developers are busy and there are so many projects, so they'd generally rather focus their time on something more profitable. If you want to retort 'but in some neighborhoods I've seen 4+ unit buildings on lots that are SFH-size in my neighborhood'- yes, they were probably built 80+ years ago.
I've linked a Bay Area newspaper article here a couple of times where the reporter tried to answer your question, by interviewing actual Bay Area developers. (Have you ever noticed how few people work in the actual industry are part of the YIMBY movement? No lack of economists and software engineers who do lots of theorizing though!) I'm too lazy to find it now, but basically all of the developers and architects interviewed said 'there's too little/no profit to building a weird narrow 4 unit on an previous SFH lot. I have more profitable projects to work on'
This is the point. Most land that is viable for adding housing units is owned by SFH owners, not developers/architects. If you're serious about increasing housing supply, I'd think you'd want to make the path easier for SFH owners who are interested.
This is so true, at least in California. Real estate developers are, for all intents and purposes, invisible in the YIMBY coalition. It appears that the movement doesn't welcome (or at least doesn't seek out) the views of those that would actually build the housing the YIMBYs claim to desire. SB6/AB 2011 are a consequence of this - well intended but destined to be minimally effective.
You may be underestimating the difficulty of getting anything passed in California. Legislators frequently have to make undesirable compromises. What in particular do you think are the fatal problems with AB 2011?
AB 2011 is less of an issue with respect to market rate housing because of its express focus on affordable housing. Nonetheless, a couple points:
For the 100% affordable projects enabled by AB 2011, all the economic constraints inherent in affordable housing development remain. Adding prevailing wage requirements only increases the economic burden. While AB 2011 may increase the viability of these projects at the margin, I doubt it will result in a construction boom.
For the mixed income projects enabled by AB 2011, the affordable housing element increases the cost of development. Adding prevailing wage requirements on top of that (plus requiring health benefits for projects of 50 units or more) increases the economic burden further. Because of these cost burdens, AB 2011’s mixed income housing provisions will result in an immaterial amount of market rate housing construction, contrary to the victory laps taken by YIMBY activists.
I do not think of AB 2011 as being focused on affordable housing. In my mind, the big gains (so far as they occur) will be in market-rate housing.
It remains to be seen how much AB 2011 will juice housing, but do not overlook the cash value of ministerial approval. Time is money, and money saved by not having endlessly pay architects for yet another redesign and endlessly pay men in well-tailored suits to defend your project in endless meetings is also money. Not having to pay for CEQA analysis, and not having to face endless bad faith CEQA lawsuits, is an enormous savings. Yes, the developer has to pay their workers more, but they save a huge amount with the speed and certainty provided by AB 2011. And a lot of these projects don't have to provide parking, though I suspect that in the expensive areas where AB 2011 makes sense, some parking will be built anyway.
This is where YIMBYs can benefit from input from market rate housing developers and, dare to dream, welcoming them as coalition partners. I am well aware and in no way am overlooking the benefits of by-rights development. Nonetheless, my prediction is that very little market rate housing will be built using AB 2011. The combination of requiring an affordable housing element plus prevailing wage requirements (and health benefits for large projects) will make projects cost-prohibitive except in very high rent areas. In Los Angeles specifically, I expect almost no AB 2011 construction because it will be cheaper and easier to rely on LA's TOD regime.
Nobody's biting, so I'll take a stab at it:
- Federal loan program specifically for SFH > condo conversions.
- Change FHA rules to eliminate requirements for owner occupancy, max percent FHA financing per building, ownership concentration limits, and no-litigation condition.
- Federal loan program specifically for condo purchasers w/r/t new construction.
- Some kind of federally financed defect mitigation "insurance" pool for new condo construction that benefits GCs that meet certain criteria. Could have a pay-in structure which increases each time the GC needs to access the pool, incentivizing GCs to do good work.
Doesn't seem like any of these categories relate to expanding the pool of trade workers which is a big problem in some (many) markets.
Building code reform could be a blue ribbon commission opportunity? Most other countries' building codes are legislated or run out of quasi-public agencies, where as the ICC is a private industry trade group, and the "international" in the building code applies to the US, and a couple latin american and persian gulf countries. Canada doesn't have it's own baseball league, but even they have their own building code.
The affluent suburbs engage in hypocrisy where they restrict new housing through elaborate bureaucracy and then have DEI teams bragging about inclusion. They’re all full of shit!
What a wonderful idea—thank you!