CA suffers country’s most expensive real estate

CA suffers country’s most expensive real estate

Los Angeles smog, wikimediaWho can afford to live here? The Los Angeles Times reported:

Los Angeles County is the second-least affordable housing market in the country for a middle-class family….

That’s according to a new report out Tuesday from real estate website Trulia, which found that a household earning the median income of $54,000 can afford just 22% of homes in L.A. County on 31% of their income or less. Only in San Francisco, at 15%, can fewer middle-class families afford to buy. Six of the seven least-affordable markets in the nation are in California, including San Diego (25%), Orange County (26%) and Ventura County (33%).

Why is this? A couple of reasons.

First, the California Coastal Commission wields dictatorial powers over coastal building, severely restricting new housing. This ripples inland at least 30 miles. This year, the Legislature and Gov. Jerry Brown gave the CCC the power to assess fines itself, something that in free societies is carried out by court actions (except for such relatively minor matters as traffic violations).

Second, local restrictions are repressive. According to a CATO Institute study:

In the 1960s, California was growing much faster than it is today, yet housing was no more expensive than in most other parts of the country. California was growing so fast that cities often competed with one another over which would get to annex (and collect taxes on) land suitable for development.

To minimize such competition, in 1963 the California Legislature created a local area formation commission (LAFCO) for each county. These commissions could approve or veto the formation of new cities or special service districts and annexations to those cities or districts. Most commissions were dominated by representatives of the city councils in each county.

The cities soon realized they could use LAFCOs to keep most taxpayers within their boundaries. No longer could a developer build houses on vacant land outside of a city’s limits and incorporate a new city or service district to provide the water, sewer and other infrastructure needs for those homes.

After eliminating the competition from such developments, cities could impose costly and time-consuming planning restrictions that further drove up housing costs. What was portrayed in public as a war on sprawl was, in reality, a war on taxpayers seeking to escape the high tax rates imposed by cities.

Third, California’s high-tax and anti-business environment keeps down wage increases that would allow regular folks to afford the high-cost housing.

None of this is likely to change.

It’s simple Econ. 101: Restrict supply and the supply rises.

If you’re in the middle class — and didn’t buy your house in California before about 2002 — the only way to find affordable housing is to leave.


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  1. desmond
    desmond 23 November, 2014, 15:31

    This shows the need for a wealth tax in California. Homeowners will have to sell their homes to pay, prices the idea of 5% tax on assessed value on all houses sold before 2002. This will be a yearly tax so more houses will come on the market each year. In conjunction the state will have a equality in housing fairness program to purchase homes for the needy, New citizens, those getting free tuition, etc. All zoning restrictions will not apply to these homes. A 4 bedroom house in a gated community can become a 3 to 4 family residence. This is a collectivist model, but aids the free market to bring on a better, fairer distribution of housing.

    Reply this comment
    • Donkey
      Donkey 23 November, 2014, 18:00

      The property tax is used to keep the lower income folks from moving to close to the elite Obmaites. The higher cost of housing the less the RAGWUS feeders need for worry about the poor living next door and knocking up their hippy acting daughters. 🙂

      Reply this comment
  2. Queeg
    Queeg 23 November, 2014, 15:43

    Yep. Just like minimum wage. Have a minimum housing allotment based upon service to the State or something Desi quirks up that theoretically may work.

    Desi has some working pieces on subjects….keep the Lad around Teddy till he congeals.

    Reply this comment
  3. Anonymous!!
    Anonymous!! 23 November, 2014, 16:59

    Obviously, the building restrictions don’t apply to Irvine….

    Reply this comment
    • John Seiler
      John Seiler Author 24 November, 2014, 12:49

      Obviously, they do. Irvine’s construction is part of the Irvine Co.’s long-term planning, which is under LAFCO and the Coastal Commission. And the restrictions the state imposes on other areas in Orange County obviously affect neighboring Irvine.

      Reply this comment
  4. Donkey
    Donkey 23 November, 2014, 17:59

    The property tax is used to keep the lower income folks from moving to close to the elite Obmaites. The higher cost of housing the less the RAGWUS feeders need for worry about the poor living next door and knocking up their hippy acting daughters. 🙂

    Reply this comment
    • NTHEOC
      NTHEOC 25 November, 2014, 20:06

      Donkey says,
      The property tax is used to keep the lower income folks from moving to close to the elite Obmaites..
      Well I know what yours is used for! That HB PENSION TAX! Hah……..

      Reply this comment
  5. Ulusses Uhaul
    Ulusses Uhaul 23 November, 2014, 19:09

    Portland has some Commissar plan to encourage back filling real estate uses toward the urban core.

    Outer concentric rings cannot be developed to encourage back fill. Guess who owns the outer rings of real estate parcels?

    Pretty please guess!!!!!

    Reply this comment
  6. Skippingdog
    Skippingdog 25 November, 2014, 16:12

    If you want to know why it costs so much to live in California, just look at someplace like Buffalo.

    Reply this comment
    NTHEOC 25 November, 2014, 20:13

    That’s why we have the most millionaires!! You gotta pay to live in the GOLDEN STATE! California is the best at everything and EVERYONE wants to live here and if they say otherwise, well they are just plain liars! How about an 85 degree thanksgiving beach day, sold out sports venues, packed out amusement parks, and the best of everything. Public safety employees who are the best in the world and with the touch of 3 little numbers can be at your door in 5 minutes to solve all your problems! California is booming and the economy is great. Sure we have a small pocket of DOOMER NATION resistance but they will eventually end p in Montana with the rest!!!!!!

    Reply this comment
    • Donkey
      Donkey 26 November, 2014, 13:23

      Ntheoc, I am a businessman, and business is not booming in California. But you live in your RAGWUS fantasy and have a great Thanksgiving, knowing the Donk advised you feeders that your greed will bring a retribution. 🙂

      Reply this comment
  8. SeeSaw
    SeeSaw 26 November, 2014, 07:49

    There is affordable housing in CA if you don’t mind living inland. In hindsight, we would all be living at the beach, like Donkey. So Donkey why don’t you just appreciate your good fortune and become a little kinder to us inlanders. As far as property taxes are concerned: One-percent of the assessed value of the property, plus an allowed 2% per year is nothing to sneer at–property taxes are three times higher for property similar to mine in WA state, because it doesn’t have Prop. 13; in AZ, the assessor sends a new evaluation every year–at least if the value goes down, the taxes go down. Anyone who has a roof, bed, and food on the table needs to get down on their knees, and say, “Here I am, but for the Grace of God”, or whoever you pray to, and be thankful for your good fortune–there are plenty of humans, yes I said humans, out there that don’t have that!!!!

    Reply this comment
    • NTHEOC
      NTHEOC 26 November, 2014, 08:40

      Hey SeeSaw, we looked at new houses recently in Rancho Cucamonga. They were all starting around 675k up to Near a million!!! And some of these homes hug the 210fwy in a wind tunnel. The Agents told us that they were selling out very quickly. I guess that’s the new affordable price for a house out in the IE. Good thing I bought my home when the prices were a little more affordable in OC. I have a ton of equity so I was thinking of selling and getting a new home out in IE but the prices just aren’t worth it right now. I’m sure the greed of the private sector banks, real estate crooks, and mortgage crooks will crash the economy again and then I’ll buy.

      Reply this comment

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