Saturday, August 19, 2017

SB 35 Would Help Solve California's Housing Crisis, But it Won't be a Game-Changer

California is in a severe affordable housing cri-tastrophe-pocalypse-ageddon ("crisis") for reasons that are summed up well in an editorial in yesterday's San Francisco Chronicle ("California must summon the will to meet housing crisis").

One of the proposals in the state legislature this year to deal with that crisis is Senate Bill 35 by State Senator Scott Wiener, who represents the City of San Francisco and some of the surrounding area to the south.  San Francisco is ground zero for California's housing crisis with a median home price of $941,000 and a median rent of $1,659 (kept artificially low thanks to widespread rent control) according to the now woefully out-of-date 2015 American Community Survey, one year estimates (i.e. it's worse now).  The only people who can afford to live in San Francisco are people who bought in a long time ago, people who have lived in rent-controlled units for a long time with lots of roommates, people who have won lotteries to get into one of the handful of subsidized affordable homes and highly-paid professional workers, often symbolized by tech workers.  The rest of the state is lurching towards this housing dystopia more and more each day.  We're becoming an increasingly exclusive gated community with no literal gate.  Who needs a gate when high housing costs can keep out the poor and people of color just as well, right?

So, what would SB 35 do about it?  It would create a by-right approval process for certain housing developments.  By-right approval means that as long as a project meets certain objective standards, it will be approved.  No public hearings, and no need to prepare the typical environmental studies under the California Environmental Quality Act (CEQA).  It would also prohibit or cap minimum off-street parking requirements for streamlined developments.  For example, a streamlined development within half a mile of public transit would not be subject to local minimum off-street parking requirements.  This is helpful, since discretionary approvals, environmental studies, public hearings and parking requirements often delay, scale back, increase costs for or kill housing projects based on pretexts that essentially boil down to NIMBYism: housing is fine, perhaps, just not near me.

The problem with SB 35 is that in order to qualify for this streamlining, there is a long list of conditions that have to be met.  The development has to:
  • Be in an urbanized area or urban cluster.
  • Be multifamily housing.
  • Be on an infill site.
  • Be on a site zoned for residential or mixed-use (with at least 75% of square footage proposed being residential).
  • Meet minimum percentages and durations for any affordable (below market rate) units.
  • Be in an area where the local government is seeing housing production at less than it's state target (RHNA).
  • Comply with objective local zoning standards.
  • Not be located in special areas including the coastal zone, prime farmland, endangered species habitat, etc., etc.
  • Not be on a site where tenant-occupied housing has existed within the last ten years, or demolish a historic structure.
  • Pay prevailing wages (a special minimum wage for construction workers that is higher than the regular minimum wage), unless it is a "public work" or, in some situations, use a "skilled and trained workforce," which is a technical term with a specific legal definition.
  • Not involve a subdivision in most cases.
  • Not mess with certain lands used for mobile home parks, and similar uses.

I like this bill because it gives developers a choice.  If it's worthwhile to meet the many, many, many eligibility criteria, developers can get permits faster and build with less parking than would otherwise be the case, lowering costs and providing badly-needed housing supply.  On the other hand, some of the eligibility criteria are excessive and will discourage people from using streamlining.  Here are some problems:
  • The prevailing wage requirement will increase the cost of housing by increasing the cost of construction.  California already has one of the nation's highest minimum wages, currently $10.50 per hour for employers with at least 26 employees and rising to $15 per hour by 2022.  Why do we need a special minimum wage for construction workers, who in many cases probably make more than minimum anyway?  Because that's what unions like, and they helped kill Governor Brown's streamlining bill last year.  Some unions have used CEQA lawsuits as leverage to get concessions for their members on projects, so they don't want to support by-right approvals unless they can see a benefit for their members in terms of higher wages.  Unions will argue their workers should be able to afford to live in the projects they build, but what about the truly down-and-out, unskilled workers making minimum wage who will pay the price for higher construction costs?
  • Although most of the rest of the eligibility requirements make sense individually, collectively, they add up to make the law intimidating and hard to use.  They also give project opponents plenty of potential arguments.  If they want to challenge a streamlined project in court, they'll just have to show that at least one of the eligibility criteria was not met.
  • Projects have to comply with objective local zoning standards.  Local governments have multiple disincentives to approve housing and allow higher densities, especially: 1) political pressure from local NIMBYs & 2) residential development doesn't raise much money for cities due to Proposition 13's limits on property taxes.  Streamlining will make many local governments look hard for ways to zone for even less housing than they do now, since they would be losing local control.

On balance, I'd rather have SB 35 than not, but it's not going to solve the affordable housing problem by itself.  It's just a tool in a toolbox that will have to keep expanding if we're really serious about making sure people have a roof over their heads and living up to our highest ideals as a society.  We have to build a lot more housing, and sometimes that involves tough trade-offs.

No mires el fuego en el contendor de basura

En el curso de mis pensamientos en cuanto a la política nacional, una metáfora ha entrado mi mente para describirlo: un fuego de un contenedor de basura.  El Presidente Trump se ha revelado como el incompetente, cruel, montón de ideas malas y defectos de carácter que pareció en su campaña (que sorpresa).  Cunado hay un contendor de basura en llamas, es difícil no mirar.  Tienes pensamientos como "¿Debe alguien hacer algo?" o "Cuando la basura arde, por alguna manera huele peor." o "Esto probablemente no es saludable respirar." o "Quizás podemos tropezar en una guerra nuclear."

Mira, todavía debes seguir las noticias, escribir a sus miembros del Congreso, vota y dona a causas buenas.  Pero, si vamos a sobrevivir esto, también tendremos que, a veces, no mirar el fuego de cinco alarmas ardiendo en 1600 Avenida Pennsylvania.

Cuando desivias la mirada, recomiendo Fully Charged ("Completamente Cargado") una seria de YouTube, presentado por Robert Llewellyn.  Fully Charged se trata de los vehículos eléctricos y la energía renovable.  Revela en una manera muy divertido que de hecho hay buenas cosas pasando en el mundo.  Además el inglés británico es interesante (e.g. "petrol").

Recuerda, ningun fuego en un contenedor de basura arde para siempre . . .

Sunday, August 6, 2017

Look Away From the Dumpster Fire

In the course of my ruminations on national politics this year, a single metaphor has seeped into my mind to sum it all up: a dumpster fire.  President Trump has turned out to actually be the incompetent, mean-spirited pile of bad ideas and character flaws he revealed himself to be on the campaign trail (what a surprise).  When a dumpster is on fire, it's hard to look away.  You have all of these thoughts like "shouldn't somebody do something?" or "when trash burns, it somehow smells even worse," or "this is probably unhealthy to breathe in," or "maybe we could actually blunder into a nuclear war."

Look, you should still follow the news, write your members of Congress, vote and donate to causes you believe in.  But if we're going to make it though, we're also going to have to, at least occasionally, look away from the five-alarm dumpster fire that is raging at 1600 Pennsylvania Avenue.

When you do look away, I'd like to recommend Fully Charged, a YouTube series hosted by Robert Llewellyn.  Fully Charged is all about electric vehicles and renewable energy.  It reveals in quite entertaining fashion that there actually are good things happening in the world.  Plus British English is kind of fun (e.g. "petrol").

Anyway, just remember, no dumpster fire burns forever . . .

¡Ruta Pasaporte de Long Beach es gratis y usa autobuses eléctricos!

Un autobús eléctrico Pasaporte de Transporte Público de Long Beach en el Acuario de Long Beach.

¡La revolución de autobuses eléctricos continúa!  Transporte Públco de Long Beach ha lanzado una flota de autobuses eléctricos en su ruta Pasaporte.  El Pasaporte es una línea de autobús que hace un círculo alrededor del Centro de Long Beach.  Es una manera buena de ir entre el centro, el Queen Mary, y acuario y la aldea del mar.  Diferente de un pasaporte real, no hay que pagar, el viaje es gratis.  Además la frequencia de servicio es bastante bien.  Solo hay que esperar 10 minutos entre autobuses durante los períodos principales del día, aun en los fines de semana, según el horario.

Autobuses eléctricos de pilas son el próximo paso grande adelante en el desempeño ambiental en transporte público, que ya tiene un récord muy bueno por sacar coches de las calles y por su uso de energías alternativas como autobuses de gas natural y autobuses híbridos.  Los autobuses de pilas no necesitan alambres por encima (que unos piensan son feos) y como verás en ciertos autobueses en ciudades como San Francisco.  Parecen como autobuses normales, hacen menos ruido y no tienen contaminación desde el tubo de escape (espera, no hay un tubo).  Mientras nuestro sistema de electricidad cambia a fuentes más limpias como el viento y la energía solar (que son requisitos legales en California y necesario parar el calentamiento global), el desempeño ambiental de autobuses eléctricos solo mejorará.

Estas noticas son fantásticas.  Transporte Público de Long Beach debe ser encomendado por este programa muy innovador.  El periódico Press Telegram reportó receintemente que Long Beach quiere "una flota completamente limpia por 2020."  ¡Vámonos!

Saturday, July 15, 2017

Long Beach Transit's Free Passport Route Runs on Electric Buses!

An electric Passport bus at the Long Beach Aquarium.

The electric bus revolution continues!  Long Beach Transit has rolled out an electric bus fleet on its Passport route.  The Passport is a bus line which runs in a loop centered on Downtown Long Beach.  It's a good way to get from Downtown to the Queen Mary, the Aquarium and Shoreline Village.  Unlike a real passport, you don't have to pay to get on board: it's free to ride.  To top it all off, the frequency of service is pretty good.  It's only 10 minutes between buses during daytime peak periods, even on the weekends, according to the timetable.

Battery electric buses are the next quantum leap in eco-friendliness for public transit, which already has substantial green credentials for taking cars off the road and for its widespread use of alternative fuels and drivetrains like compressed natural gas (CNG) and hybrid buses.  Battery electric buses don't need overhead electric wires (that some find unsightly) as you will see on trolleybuses in cities like San Francisco.  They look just like normal buses, make less noise and give off zero pollution at the tailpipe (wait, there is no tailpipe).  As our electric grid shifts towards more renewables like wind and solar (which is a legal requirement in California and necessary to put a stop to global warming), the eco-cred of electric buses will only grow.

This is fantastic news.  Long Beach Transit should be commended for this trailblazing program.  The Press Telegram recently reported that Long Beach "wants to have an entirely clean fleet by 2020."  Let's do it!

Montando el unicornio: la búsqueda de un hogar propio en el Condado de Los Ángeles

Para demasiadas personas en el Conadado de Los Ángeles, poder comprar un hogar propio es tan probable que montar un unicornio.  Pero para ustedes que quieren intentar, considera estos hechos.

Segun el Informe de ventas de casas existentes en el sur de California para Mayo de 2017, el precio mediano de una casa separada en el Condado de Los Ángeles es $585,000, mientras el condominio mediano cuesta $492,000.  ¿Qué significa esto en un presupuesto personal?  Para contestar eso usaré la calculadora de hipotecas de Google.

Ejemplo de una casa separada
Digamos que intentas comprar la casa separada con el precio mediano.  Para ser sagaz, y evitar pagando el seguro de hipoteca, y para protegerse de tener una casa que vale menos que la deduda si el valor baja, debes ahorrar la entrega inicial tradicional de 20%, que en este caso es $117,000.  Buena suerte ahorrar eso en uno de los mercados de alojamiento rentado más costos del país.

Pero supongamos que lograste ahorrarlo.  Todavía tienes que tomar prestado $468,000.  Supongo que tendrás una hipoteca de 30 años con una tasa de interés fijado de 3.75%.  Puedo decir de experiencia personal que esa tasa es más o menos correcto.  Tu pago mensual básico es $2,167.  También tienes que pagar impuestos de la propiedad, que en el Condado de Los Ángeles serán casi 1% del precio del hogar cada año, que es $488 al mes.  También debemos contar $100 al mes para seguro de hogar y $200 al mes para arreglos.  Si no te gusta mi presunción sobre arreglos, espera el primer problema con tu tejado y entonces dígame por que no piensas que es una buena idea ahorrar para gastos necesarios que vendrán a veces.

Añade todo eso y estás en $2,955 al mes. El estándar del gobierno federal en cuanto a alojamiento asequible es pagar no más que 30% de su ingreso en alojamiento, pues . . .

Ingreso mensual * 0.3 = $2,955
Ingreso mensual = $9,850

Tienes que ganar $9,850 cada mes o $118,200 cada año para poder pagar la casa mediana.  ¿Y cuanto gana el hogar mediano en el Condado de LA?  $59,134, según la Encuesta de comunidades estadounidenses de 2015.  En otras palabrás, el hogar mediano tendría que duplicar su ingreso para poder comprar la casa mediana en el Condado de LA.  Pues, eso es deprimente.  ¿Qué pasa con el condominio?

Ejemplo del conodminio
Entrega inicial de 20%: $98,400
Cantidad pedido prestado: $393,600
Pago de hipoteca: $1,823 al mes (préstamo con tasa fijada de 30 años, 3.75% interés)
Impuestos de la propiedad: $410 al mes (1% del precio del condominio cada año)
Seguro: $100 al mes
Honorario de la asociación: $300 al mes
Arreglos de casa: $100 al mes (más bajo que arriba porque la asociación hace lo del exterior)
Costo mensual total: $2,733
Ingreso mensual necesario para ser asequible: $9,110
Ingreso anual necesario para ser asequible: $109,320

El conodminio es un poco más barato, pero todavía tienes que ganar mucho más que el promedio del Condado para evitar una situación mala en sentido financiero.

La moraleja del cuento es que si quieres montar el unicornio, tendrás que pagar, mucho.  Si queremos que más gente disfrute el ser dueño de hogar y los costos más o menos fijados que vienen con eso (y debemos) necesitamos construir mucho más alojamiento en el Condado de LA para enfrentar la escacez severa que tenemos.

Thursday, June 29, 2017

Riding the Unicorn: The Quest for Homeownership in Los Angeles County

For far too many people in Los Angeles County, being able to afford a home of your own is about as likely as taking a ride on a unicorn.  But for those of you interested in riding the unicorn, consider these facts.

According to CoreLogic's, Southern California Home Resale Activity Report for May 2017, the median price of a detached home in LA County is $585,000, while the median priced condo will set you back $492,000.  What does that actually mean in practical financial terms?  To answer that question I'll use Google's mortgage calculator.

Detached House Example
Let's say you're trying to buy the median-priced detached house.  To be prudent, and avoid paying mortgage insurance, and protect yourself from being underwater if your home value dips, you should save up the traditional 20% down payment, which in this case is a mere $117,000.  Good luck saving that in one of the most expensive rental housing markets in the country.

But okay, let's say you managed to save it up.  You still need to borrow $468,000.  We'll assume you're signing up for a 30-year fixed-rate mortgage at 3.75% interest.  I can say from personal experience that interest rate is about right.  Your base mortgage payment is $2,167 per month.  You also have to pay property taxes, which in LA County will run you about 1% of the purchase price per year, which works out to $488 per month.  We should also budget $100 per month for homeowner's insurance and $200 per month for repairs.  If you don't like my assumption about repairs, wait until your roof starts leaking and then tell me why you don't think that repairs are a perfectly predictable expense that you need to save up for.

Add up all of that up and you're at $2,955 per month in housing costs.  The federal government's affordability standard is spending no more than 30% of your income on housing costs, so . . .

Monthly Income * 0.3 = $2,955
Monthly Income = $9,850

You need to make $9,850 per month or $118,200 per year to afford the median priced detached house.  How much does the typical household in LA County make (median household income)?  $59,134, according to the 2015 American Community Survey.  If the average household in LA County roughly doubled its income, it could afford the median-priced detached house in LA County.  Well that's depressing.  What was the deal with that condo again?

Condo Example
20% down payment: $98,400
Mortgage Amount: $393,600
Mortgage Cost: $1,823 per month (30-year fixed-rate loan at 3.75% interest)
Property Taxes: $410 per month (1% of purchase price per year)
Insurance: $100 per month
HOA Dues: $300 per month
Home Repairs: $100 per month (lower than above because HOA handles exterior stuff)
Total Monthly Cost: $2,733
Monthly Income Needed for Affordability: $9,110
Annual Income Needed for Affordability: $109,320

The condo is a bit more affordable, but you still need to be well above the county median income to avoid overstretching yourself financially.

The moral of the story is if you want to ride the unicorn, be prepared to pay, a lot.  If we want more people to be able to ride the unicorn and enjoy stable housing costs (and we should) we need to build a lot more housing in LA County to address the severe shortage that we have.