On Growth BOUNDARIES, zoning, Entanglements, and Insanity

Blame it All on AirBnB

The oft misattributed working definition of insanity is doing something over and over again and expecting the same result.

More below the fold.

But when it comes to housing affordability this seems to be the case. Urban growth boundaries, services limits, zoning, and bureaucratically entangling the permit process all create the problems the activists in San Francisco detest. What is even more ironic is the fact that I have never interviewed one of these characters, and not found them completely in accord with the growth boundary. They fervently want that which causes that which the fervently detest. 

Insanity defined! 

Talk about missing the 900 lb. gorilla in the room

“San Francisco bay area has a huge amount of land, 4.5 million square acres in total, and all of the development is only on about 0.8 million square acres. But nearly all of the rest of the land is off limits for development. There is apparently between 300-500 thousand square acres which could be developed but which lunatics are attempting to make into land permanently unavailable for development. 
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The reason San Francisco’s property values are insanely high, is lack of land to build more housing, and this is purely a man made catastrophe. Releasing 400,000 acres of land for development would quickly return the San Francisco housing market to rational pricing, but it would also cause the interstellar individual house prices to fall, likely by half or more, and then remain low. And existing homeowners would be apoplectic with that outcome. 

Once a growth, or service boundary, or zoning scheme begins to artificially inflate prices, it becomes nearly impossible to reduce the underlying cause of the problem. The existing homeowners want high home prices more than they are interested in housing affordability for others. They make silly arguments about how land must remain off limits for development, promote infill development, and seek to spend all transportation dollars on transit, and not on roadways. This drives congestion through the roof, and causes large increases in costs to the individuals, pollution, and carbon. This is what is commonly defined as “sprawl,” it is the natural outcome of “Smart Growth” and “Urban Planning.'”

Less than 18% of the Bay areas land is developed, yet there is a religious fervor to keep the remaining 82% locked up. The result is housing prices skyrocket since demand for housing continues to grow, but additional supply is nonexistent. 

The other result is gentrification, and densification of the developable lands. However, because the city wants places like Chinatown to remain as is, zoning laws are created which all but prohibit changing the existing structures. 

But humans are, if nothing, creative, and with the advent of AirBnB, the land owners found that they could circumvent the zoning, and rent controls to some extent by renting to transient visitors. 

“These artificial prices will only remain as long as people find reason to live in the area, once that stops, and the people begin leaving, housing prices will decline. Commonly this is pooh poohed, but that is exactly how Detroit went from America’s fourth largest, and most prosperous city to the burned out hulk of a city it is today. It underwent this change between 1970, and the present, a mere 45 years.”