Orange County Affordable Housing Conference

17 thoughts on “Orange County Affordable Housing Conference”

  1. After 35+ years of working full time I mastered the art of ‘buy high, sell low’ during every downturn. I’m now facing retirement on about $1K a month SS with very little in savings. I’ve decided to either kit out a van or RV and travel which has it’s attractions; I’ll be able to park in front of all the millionaire’s houses overnight, enjoy the ocean view and then move on to a federal park or two, hopefully avoiding the wrath of taser-happy local constabulary, or my other option seems to be moving to Mexico or some other up and coming country where $1K a month is a good wage and the cost of living isn’t insane. At least there’s several million babyboomers who have already done so and are telling me in no uncertain terms that they would never, EVER, return to the US now that they’ve seen the alternatives. Any country that would elect a Donald Trump, let disabled veterans sleep on the streets and not provide the basics – housing, food, clean water and medical care to all its citizens, is doomed. But hey, keep funding that Pentagon – wouldn’t want those terrorists we’re producing after our random bombing runs to ‘threaten our security…’

    I’m sure all this talk and all these seminars will get something accomplished, sooner or later. Probably much later. Many of us can’t wait.

  2. House wealth is relative to a market. Unless you inherit the whole house, your fraction (even if hundreds of thousands) amounts only to a down payment in the neighborhood where you grew up…and it comes when you are well past your mortgage-paying years. Even if you are upper middle class white.

    Yes, it will pay for a home in Vegas or Boise or Tucson or Albuquerque but none of those places are Coastal California.

    1. Bay Area home prices have rocketed so much that there are a number of communities on CA’s coast where you could sell your local house and buy something quite nice while still pocketing some cash after taxes. And I’m looking at this from the perspective of an older person who if they moved isn’t concerned about employment prospects and would prefer a smaller place.

      Personally, we’ve looked at Pacific Grove and realized they we could sell here and buy something there that we’d be perfectly happy with. Ditto for San Luis Obisbo. Also true of Sonoma County where I already own property.

      Lots of people, by the way, are quite happy to pack up and leave California. I’ve friends who’ve shifted to the Puget Sound area and are loving it, but being retired they escape the gloomier months. It is pretty when the sun shines. I know others who’ve moved to Idaho and Montana and are quite happy with their decisions. I’m not real keen, though, on real winters.

      1. No surprise this recent Sacramento Bee poll shows about half of Bay Area residents want to leave that area, and about half of those exit California. Sacramento has seen recurring Bay Area influxes when prices get especially crazy, driving up housing here.

        Both the Bay Area and Southern California remind of that phrase: nice place to visit, but I wouldn’t want to live there.

  3. Great talk! Would love if you could somehow upload a version with the appropriate photo/slide superimposed in the corner of the screen (news anchor style).

    1. Yes, I agree. I didn’t film or edit this and I don’t have control over the material. The university’s Facebook link seems designed to resist tinkering. But all the photos were pulled from my usual blog stock so if you’re a regular reader you know the drill.

  4. I just want to say, I never ever considered that you wear a suit and tie. You rocked it (great presentation, sir) but it was jarring to see. LoL!

  5. Who knows whether old malls or unused office buildings will ever be converted to housing? As you say, there’s a lot of political opposition. The “affordable housing” mandates as have been emphasized in California and other states are really a fraud. They are not profitable to build but still require financing, so they are either squeezed into other market rate developments or built by some non profit housing developers who somehow cobble together the grants and loans to occasionally build a project, opened to great political fanfare. The grants really aren’t there to build the quotas that many communities are assigned, as is often noted in the housing elements (chapters) to many communities’ general plans. Those that are squeezed into market rate projects tend to lower the overall value of those development meaning that marginal projects are less likely to be built.

    Here we have the Plan Bay Area, a coordinated housing plan among all region’s cities and counties, that says that over half of all new housing built should be deed restrictive affordable units built in the major cities. It just ain’t gonna’ happen ’cause it often doesn’t pencil out. And just to make sure it doesn’t happen, the site lists that communities are supposed to identify where such housing could be built can be carefully selected to only include sites on which no one is apt to try to build any such housing.

    However, the lack of building has enriched those of us already fortunate to own a house. It also means our heirs will one day inherit well. We are, however, telling younger people that we expect them to live in high density housing for the rest of their lives, and the poorer of them will never garner the equity because the deed restrictions to affordable housing prohibit that. Who are the poorer younger people? In California they’re over half minority.

    Frankly, we’ve engaged on process whereby older homeowners get rich, and these are disproportionately white. Their disproportionately white kids will one day inherit a housing fortune, even if they are strapped for a while trying to buy their own place. Many of their minority contemporaries are precluded from ever participating in this. That’s going to cause some issues as it is finally figured out.

    1. Here’s something to chew on. What happens to all that equity ten minutes after an earthquake? Poof. The owners of earthquake damaged property will never again live in those buildings just as the owners of fire damaged homes in Santa Rosa will mostly never rebuild. Fire insurance is grossly inadequate, but most people have zero earthquake insurance. They’ll try and drag things out for a few years and ultimately sell off the dregs of their property to a developer and end up moving out of state with the remains of a liability, not an asset. Rebuilding will be hampered by the same rules and regulations that previously protected them…

      1. “Rebuilding will be hampered by the same rules and regulations that previously protected them…”

        Either that or, like you said in your talk after the Santa Rose fire, those regulations will be changed in the blink of an eye when they start hurting the rich white homeowners. 🙂

        1. Not enough people were effected by the fire for permanent rules to change. The temporary emergency changes will expire in two years. In fact, new rules and constraints will be introduced in the wake of the fire to make it even harder and more expensive to build in the future.

          Most of the homeowners in California are “house rich” not real rich. They bought their homes long enough ago (and were protected by property tax increases by Prop 13) that they had equity. But the homes and families aren’t much different from what you’d find in Minnesota or Georgia. When the home burns down they’re just marginally middle class people with a giant pile of liabilities and not enough resources to deal with the situation. And many people have consistently taken out home equity loans to tap that value which is no longer there.

          Most of these “rich” people will never rebuild. Instead they’ll sell what remains of their property to companies that can pull together the required capital and expertise to navigate the endless regulatory environment and source scarce workers.

          1. Ummm. Home equity is real wealth. It’s not necessarily a liquid form of wealth, though it can generally be borrowed against. Plenty of people in the pricier parts of California are selling out and even after taxes are able to buy a nicer place in a cheaper area. Also, people are dying and as their heirs sell the place, they also receive the proceeds. By any rational definition that’s wealth. I know people who with their siblings have divvied up hundreds of thousands once their parents’ old house was sold.

            Even after the fires equity is often still there. If you have the correct insurance you have the funds to rebuild, though in these circumstances it may take a while to find a contractor. Ironically, people with the most debt and the least equity may have been the most likely to have the best insurance as their lenders would require it. What was learnt is that many people didn’t have adequate insurance to pay the cost of replacing what they had, which is not the same as having no insurance. If you don’t want to rebuild because your insurance is inadequate or because you simply don’t have the heart for it, likely you still received a substantial payout, but yes, you’re behind where you were before the fire but not necessarily wiped out, though it is probable that uninsured renters were wiped out.

            None of this takes away from my original point which that the affordable mandates are shoveling Hispanics into these developments where they’ll never garner any equity while the housing constraints are enriching existing homeowners.

            1. We aren’t disagreeing. We’re just focusing on different aspects of the same situation.

              I know several Latino families that were priced out of the housing market until the 2008 financial crisis when home values dropped by half. They were then able to buy in at reasonable prices. It’s the people who bought in during the bubble that were hammered.

              If rental accommodations are designed to bleed tenants of the maximum cash flow then yes, apartment life is an economic trap. But it doesn’t have to be that way. The apartments aren’t the problem. The larger system is just flawed. I say this as a past renter and present landlord. My old landlord helped me to purchase the building I now live in and own – at a below market price. He still made money. He was a mensch. I do what I can to pass on the same spirit with my tenants.

              I’m confident that a significant proportion of the value of homes today is tied to shenanigans in the financial markets that don’t reflect underlying economic reality. Sooner or later reality will reassert itself in a market correction. We’ll discover a great deal of virtual wealth will evaporate. Add in a few inevitable natural and geopolitical events and a lot of folks who are “rich” turn out not to be… That’s not me being a Doomer. That’s a rational and prudent set of assumptions.

              1. I’ve found myself saying this like “2008 was the year of recent peak housing justice and we need it back” not sure if I should be saying such things.

            2. In much of California 90% of the home value is in the land, not the house, anyhow, so people buy the house for the land and replace the house with what they want.

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