Reply #15: Several factors [View All]

[JDPriestly]

and they all have to do with how great it is to live in California

1) When the stock market fell, rich people who had been gambling on stocks decided to "invest" what was left of their gambling stakes in real estate. As they contributed to the stock market bubble a in the late '90s, they contributed to the housing bubble in the early 2000s. There are a lot of rich people in California, especially in San Francisco and L.A. People from the heartland would not believe the concentration of wealth in the hands of some people out here. If you are planning a vacation to California, you should plan to pretend to be looking for a high priced house. You could entertain yourself for a week just looking at mansions and the entrance fees would be minimal.

2) Immigration, especially illegal immigration. California, especially southern California, is the entry port not just for all that stuff you buy at Walmart, but also for immigrants, poor and rich. They need housing, and there just isn't enough of it so they crowd into tiny apartments. The high cost of housing is just one effect of immigration. Immigration also breeds gangs, crime, and increased health care, education and other infrastructure needs. Who should pay for the costs of immigration? Right now Californians who came here legally pay most of the costs, and one of the costs is the high price of housing. By the way, immigration also provides a low-cost, near slave cast that works to raise the standard of living for those in the higher casts, and that makes life here for those who use the slave labor quite pleasant.

3) Bottlenecks in building new housing. Most of the flat land that lends itself easily to construction has been built on. Building on slopes in earthquake country is challenging and costly. That drives the cost of new houses up. Buildable land is scarce and therefore extremely expensive. It's not the houses that cost so much. It's the land.

4) Builders are greedy. They build lots of high cost luxury housing, and are unwilling or unable to build moderately priced affordable housing. Certain areas of LA are viewed as posh. Builders put their hearts and souls into putting up high-priced condos and houses in those areas, and ignore the low-priced market. Why should they build a house that will sell for $200,000 if they can build fifty condos at an average price of $600,000 each? There are proposals for requiring builders to build a percentage of affordable housing in order to get building permits. The problem is that builders don't want to build the low and high priced housing in the same area. The less posh areas are balking because they fear that builders will build the "affordable," ugly, unlivable, cheap "condos" next door to them. This is a legitimate fear. I live in a relatively poor area. About twenty years ago, some affordable housing was built near me. It is an eyesore and police cars have to patrol the area in which it is built and make arrests on a regular basis just to keep the peace. That is unacceptable. NIMBY is not just some cranky idea. There is a reason for it. The affordable housing should be built in the same areas as the swanky digs.

5) Culturally, Los Angeles and San Francisco are the Athens of the United States. When I first arrived in L.A., I thought that this is how Paris was in the Age d'Or, the Golden Age. The arts flourish. In addition to Hollywood, the Valley and Malibu with all their opportunities and fascinating craziness, a vibrant spiritual and intellectual life is available to rich and poor. Educational opportunities abound as do coffee houses, artistic performances, lectures. We live relatively near CalTech. Imagine being able to attend lectures at CalTech for free on a regular basis. Do you understand the allure? And all that in a climate in which you can spend an enormous amount of time outdoors because it rarely rains and never snows. It's about as close to heaven as you can get, that's why prices are so high.

6) California is beautiful. It appears to be a great place to live. We all love the great weather and the picturesque landscapes, the mountains and the ocean. The desert flowers in the spring are beautiful beyond belief as are the sunsets year round. We do not think about the future. We do not think that this is a desert with virtually no water. We all just think about how much we love it here and how much we love living here.

7) California is politically liberal. Gay or lesbian, mixed marriage, star struck, yogi, Scientologist, evangelical, conservative Jew, whatever makes you you, whatever makes you unique or different, you are pretty safe, relatively free to be yourself in California. That is the most precious, most wonderful thing about California. Check out the housing prices. This is just as true in conservative Orange County as in liberal San Francisco.

So, in a nutshell, that's why housing prices are so high here.