Externalities, + or -, Ignored or Unknown

In residential development, there are stakeholder actors:

Existing residents, owners§ Many of their goals and interests are to limit the amount of additional residents and to increase the price of their own housing. Both of those goals have been achieved to some extent. The Bay Area has the highest housing prices in the nation. The internal domestic migration from the Bay Area to other states and regions has been greater than the natural growth rate (births – deaths), since 2000, based upon Census data. There has been population growth due to immigrants. That high housing cost has increased some workers’ pay (albeit less than housing) and thus the cost of goods and services, including government. Higher housing cost also increases the cost to move to another Bay location, due to higher property tax costs (Prop 13). Also if a homeowner wants a house of higher value, it has now become proportionally more expensive. 

Existing residents, renters§ They can have similar ideas of limiting growth, while not being aware that their rent is increased due to restrictions in supply. Also, through voting, they can be for policies that increase costs for property owners, not realizing that their rent pays for that. Almost conversely, some policies that they vote for can make ownership more attractive which lessens the pressure on rent prices, as has been evident in the last few years.

Future residents§ While not a player yet, they are affected. There are many fewer incoming citizens due to the high prices. Some current residents think, “They should live elsewhere.” Once here, many will want to limit growth too, applying the drawbridge principle.

Developers§ They are trying to make money by providing buildings that people want. In order to reduce costs, sometimes the structures have deficient construction and low amenities. The low vacancy rates have reduced competition. Many people are willing to live in anything due to low availability.

City and County governments§ A major reason that urban growth boundarys (urban growth boundaries) are used is to enable there to be enough revenue to pay for expanded government services. That has backfired. The limits on land expansion and the multitude of regulations have increased the government cost per capita. Prop 13, has created the fiscalization of land, where commercial tenants are sought after more than residential. Cities now compete against each other for non-residential tenants and try to avoid the RHNs (regional housing needs), many times offering tax discounts, which hurts the bottom line. Gentrification is also pricing many people out of the market; the lowest cost housing units are destroyed or upgraded.

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About Randall
A contrarian, not for conflict, but because many decisions are made, without considering the full impact & consequences.

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