July 17, 2019
There is still time to join us tomorrow for Connect Bay Area at the Grand Hyatt San Francisco. Get more information, and register to attend on this link.
The cost of living in California is high, and while that’s no secret, the solutions are as complex as they are hotly debated. Legislators, city officials, planning organizations and housing advocates have struggled to bring ideas that work for those seeking places to live, as well as builders who deliver needed supply.
Just last week, a San Francisco Board of Supervisors committee rejected a plan proposed by the city’s Mayor London Breed that would have made it faster and easier to build new housing for teachers in San Francisco. Lawmakers in San Francisco sought tighter terms on teacher resident requirements, as well as cheaper homes more exclusively aimed at educators.
Breed told SF Curbed in a statement, “I’m tired of people saying we’re in a housing crisis and then rejecting solutions that will actually make a difference. The status quo means less affordable housing will be built, more people will be priced out, and the crisis will only get worse.”
Another view, posed by Dr. Richard Green, a professor in the Sol Price School of Public Policy and the Marshall School of Business at USC, writing in response to a post by Joel Kotkin notes the cost of living on the metro “fringe” of more affordable areas actually may not be as affordable as assumed. He points out that the costs of a cheaper house farther away from a job add up.
He worked through an example of buying a house in the Inland Empire’s Banning, CA, where the median home price is $257,000. The cost of commuting to local job centers in Riverside or Palm Springs would be $35 per day, thus adding $560 per month relative to living next to a job. Another $128 per month per kid would go to childcare.
“We have now added $688 per month for a household with one young child in living costs by living at the fringe. At a 4% interest rate, this “payment” translates into a $144,000 mortgage–that $260k house is similar in cost to a $400K house near jobs,” writes Green.
He notes that he hasn’t “taken into account the opportunity cost of time, and I am only talking about private costs. Surely there are social costs to having people drive longer distances–particularly with respect to greenhouse gas emissions.”
For comments, questions or concerns, please contact Dennis Kaiser