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Growth, Housing Policy, Taxes and New Technology

Housing Policy, Taxes and New Technology

Marin and the State of California face a severe housing dilemma.Several of your recent articles have focused on the problem (e.g., Louis Hansen, “Office projects eclipse housing growth,” Oct 22, 2018). All efforts to entice builders to produce affordable housing have fallen far short of need. Yet policy has fostered growth without affordability.

The trend toward larger housing units and the commodification of housing (turning dwellings into piggy banks for some and speculative assets for others) began in the 1970s and accelerated after 1980. While Proposition 13 in California (and similar property tax initiatives in other states) was proposed to make housing more profitable and affordable, it accomplished only the former.

Laws limiting or banning rent control also were promoted and predicted to result in more housing and more affordable housing. In this case, more housing was built, but mostly not affordable. The near complete removal of laws and guidelines for loans after 2000 (no document loans for subprime) led to financing larger homes bought by a population that could not afford homes at even a fraction of the cost. The credit crisis eventually led to evictions, property seizures and in some cases the looting of abandon homes and their bulldozing. All around a failure of policy for 4 decades.

San Francisco, like many metropolitan areas, also saw their ethnic neighborhoods besieged by new waves of gentrification during this period and this has accelerated since.

As the housing crisis expanded after 2010 few planners could come up with new ideas for affordable housing. Tax credits, Section 8, alternative financing all were tapped out. But a European planning initiative from the 1990s, densification, did find new life in American planners’ needs.

The idea of expanding tall housing units into the suburban periphery of central cities became the ‘new’ to create affordability. This idea had been shown to be unworkable in Europe for two reasons,

1. Suburban areas seldom had the infrastructure for such large scale development, and

2. Where built the cost of land and financing and prospect of profit resulted in unaffordable units.A third factor edged up as America began to create such developments.

This was the new pattern of consumerism which had developed out of the internet and social media. Where the mall had destroyed the small town store and inner city shopping district, the internet commerce wave killed off the mall and the brick and mortar store that had sustained towns and the suburban developments of the 30s to the 60s.

Without the sales tax from commercial districts, towns and suburbs were faced with declining revenues and Proposition 13 and related tax limitation initiatives acted as a noose preventing property taxes and fees from filling in the gaps. Also an aging population created a cohort of citizens who were tax averse, especially regarding school taxes.

What is also affecting towns and cities is the cost of protecting homes built in the wildlands. This trend has also been promoted by planners who have argued that these homes could be protected by standard firefighting techniques. The rise in the numbers and extent of wildland fires has, however, overwhelmed these techniques and outstripped available resources, notably in California where the North Bay fires drove right into towns like Santa Rosa burning along the streets of developments as in Coffy Park.

All this has placed towns in a most difficult position, if they grow, new units only eat away at already limited resources in their taxed budgets. Yet governments, especially here in California, demand all towns and cities to grow.

What is clear is few affordable units are being built anywhere, but if we are to see such dwellings added to our housing stock it is in the urban cores where they can most affordably be situated. This is because of the urban infrastructure.Large dense housing units are more efficient than small spaced units. Electrification and plumbing can be provided at a fraction of the cost in high rises than in small units, though at a diminishing return as over 20 stories the benefit disappears ( Yet even when we are considering “large” units of 10 to 30 compared to 100 to 200 the way an inner city core promotes efficiencies is still great (

But we have to ask why American cities have a glut of high rise developments and still little affordable housing? That is because builders and financiers are pursuing luxury buyers and planners and politicians are supporting them (

Most units built are not primary residences but are speculative investments (back to the commodification of housing). What we need is a housing policy that prevents the construction of commodified units and promotes affordability.


housing, affordability, growth, city budgets, tax