Saturday, October 27, 2018

November 6, 2018 Election: California Housing Props

Okay, there is a General Election coming up on Tuesday November 6, 2018.  This is a democracy alert, California!  We'll be voting for a Senator, members of Congress, a Governor and other statewide elected officers, members of the California Legislature, so many judges, initiatives and more.  If you haven't already, register to vote.  Go ahead, I'll wait . . .

I'm not here to cover this election comprehensively.  I'm trying to write a blog post, not a book.  Suffice it to say, I'm on the left and I voted (yes, already, by mail) for lots and lots of Democrats.  I'm here to write about specific ballot initiatives that have to do with housing, which in the Golden State, consumes far too many of the gold nuggets we pan so hard for every day.  Comprehensive information on the initiatives can be found in the California Secretary of State's Official Voter Information Guide.  Let's get into it:

Proposition 1 - Authorizes bonds to fund housing assistance programs.
Prop 1 would authorize $4 billion in general obligation bonds to pay for housing assistance, including $1.8 billion for multifamily housing affordable to people with low incomes, $450 million for transit oriented affordable housing and supporting infrastructure, $450 million for homeownership assistance for low-income Californians, $300 million for farmworker housing and $1 billion in subsidized home loans for veterans.

I voted yes on Prop 1.  California's housing affordability crisis is the biggest economic problem facing the state and this will help some people cope with that.  At the same time, it's not going to be a panacea.  The legislative analyst projects the bond would serve about 55,500 households in total, a drop in the bucket.  We're still going to have a housing crisis, just one that is a bit less severe than it otherwise would have been.  We still need to build a lot more housing at all income levels to get prices under control.  I especially like that a good chunk of Prop 1 is specifically targeted at transit oriented development, which allows low-income Californians to save money on housing and transportation.

Proposition 2 - Authorizes bonds to fund existing housing program for individuals with mental illness.
At issue here is whether a stream of mental health care funding previously approved by voters can be used to build affordable housing for people with mental illness.  The Legislature has already voted to do this, but that action has to be approved in court.  Prop 2 would basically express that the voters intended this kind of use of the funding in the first place.

I voted yes on Prop 2.  While I think there is an argument to be made that mental health funding should be reserved for things like counseling and other medical care, I also think that for the most severely mentally ill people, all the counseling in the world can only go so far if you're homeless.  Housing is just fundamental to a person's ability to be okay in any sense.  We're in a crisis.  I think that means we have to err on the side of plowing more money into subsidizing housing for those who need the most help.

Proposition 5 - Changes Requirements for Certain Property Owners to Transfer their Property Tax Base to a Replacement Property.
Prop 5 has to do with residential property taxation.  Thanks to 1978's Prop 13, when you buy real estate in California, you get taxed at 1% of the market value at the time of purchase and increases in the property's assessed value are capped at no more than 2% per year.  In reality, most properties appreciate at more than 2% per year, so over time a large gap typically develops between the home's assessed value and its market value.  This means that if you have owned your property for a long time, you are probably paying much less in property tax than someone who just bought a similar property next door.  Under current law, if you are over 55, you can transfer your property's assessed value to a new property under certain conditions: you have to be moving within the same county to a property that has a market value equal to or below the property you sold and you can only do that once in your life.  Prop 5 would make it so that if you are over 55 you could transfer your current property's assessed value without being required to move within the same county, without a limit on the number of moves, and even to a more expensive property (in which case your assessed value would rise, but not to market rate).  In short, Prop 5 would make it easier to carry your low property taxes to a completely new property if you meet the age and other criteria.

I am strongly against Prop 5 and gave it a firm "no" vote.  Prop 13 has had some unfortunate side effects.  It reduced tax revenues for public services such as education and weakened the finances of local governments, which are now heavily reliant on sales taxes to patch their budgets together.  This means that local governments often don't recoup the cost of providing services to housing developments and are much more eager to approve commercial projects that might generate precious sales tax revenue.  Although higher-density housing developments do a better job of covering their costs, these projects are often very controversial and still typically don't perform as well as commercial projects from a local government budgeting perspective.  All of this means cities don't have a strong incentive to approve housing, which feeds into the housing shortage, which makes housing more expensive.  Prop 5 is trying to exempt older homeowners from feeling that crisis by making it easier for them to move without having to pay market-rate property taxes like other homeowners.  The reality is, while some elderly homeowners have financial challenges, on average, these are the wealthiest people in the state.  Cutting their property taxes would harm public services, would worsen the local government disincentive to approve housing and is just not fair.  The real solution is to keep housing prices from rising so much by building enough housing to meet demand, so that people can move without being hammered by property taxes.

Proposition 10 - Expands Local Governments' Authority to Enact Rent Control on Residential Property.
Prop 10 would repeal Costa Hawkins, the state law that sets limits on local rent control ordinances.  I wrote a whole post on Costa Hawkins back in December 2017 ("A California Rent Control Compromise"), which I urge you to read.  It explains what Costa Hawkins does and why I'm skeptical of rent control.  Here's some food for thought: if rent control were some kind of housing panacea, San Francisco and Los Angeles should be affordable places to live, since most of their apartments are subject to it, yet they are some of the most expensive housing markets in the country.

I voted no on Prop 10.  While Costa Hawkins isn't my ideal, it does represent a compromise between unlimited local rent control and totally prohibiting rent control.  Prop 10 could not be amended by the Legislature to reach a better compromise: that would take another initiative, thanks to wording in Prop 10.  Prop 10 would open the door to basically any kind of local rent control, even on new buildings, which I think is problematic because it reduces the incentive to build housing.  On the other hand, if you give buildings some time to pay off their loans and give a return to their investors, perhaps you can apply rent control to them (like 30 years after construction) without hurting the incentive to build quite so much.  Again, high housing prices are caused by the housing shortage.

In Conclusion
When it comes to the housing initiatives on this ballot, it's a mixed bag.  I support publicly funding housing affordable to those with low incomes, and we have a chance to do that with Props 1 and 2.  On the other hand, even $6 billion is a drop in the bucket.  That's funding for tens of thousands of affordable homes, but not the millions of homes we need to really get prices in check.  The only funding source that can build that many homes is private capital (unless we go full socialist or something), so we have to think about things like regulatory reform to make it easier to build homes.  That means stomping all over some of the third rails of California politics: local zoning regulations, NIMBYism, CEQA, Prop 13, etc.  The tragedy of this ballot is the initiatives that might really matter for housing affordability aren't even on the ballot.  The elected positions like Governor and state legislative seats will probably end up being more significant.  We're still not taking the housing shortage seriously, and that has to change.  We have to be willing to say "yes in my back yard" to new housing and not be in denial about basic principles of economics.

Research, think and vote on November 6th!

Monday, October 8, 2018

Lee este libro en el cambio climático, entonces haz algo

Fuente del imagen: Sitio de internet de Oxford University Press
Guau, acabo de leer Cambio climático: lo que todos necesitan saber, segunda edición por Joseph Romm, ¡y fue excelente!  ¡Tiempo para un informe de libro!

Primero, el autor tiene un doctorado en física de MIT, que es básicamente el equivalente en física de ser LeBron James.  Este tipo sabe de que habla.  El libro empieza con ciencias de clima y después mueva a tecnología y política.  Es escrito en una manera muy fácil entender, para una audiencia general, pero es también basado en investigación, con una cornucopia de notas de fin que puedes seguir si quieres sumergirse en las materiales de fuente.  El libro entero es presentado en un formato de preguntas y respuestas.

¿Causan los seres humanos el calentamiento global por quemar los combustibles fósiles?  Sí.  Eso dicen 97% de los científicos áctivamente publicando en este campo.  Lo sabemos con el mismo grado de certidumbre que sabemos que fumar causa el cáncer.

¿Causa el cambio climático unos problemas serios?  Sí.  Pues, a menos que piensas que Miami siendo en el océano no es un problema.  Pero la subida en el nivel del océano es solo parte del cuento.  El cambio climático está:

  • Aumentando la cantidad de ácido en el océano, matando la vida del mar.
  • Haciendo los huracanes más intensas.  Esto incluye empeorando el oleaje de tormentas de aun huracanes modestos, aumentando el riesgo de inundaciones dañosas.
  • Secando áreas secas, que junto con la subida en el mar y la invasión de agua salada en tierra de granjas causará problemas agrícolas en que tendremos que alimentar a 10 mil milliones de personas este siglo con menos tierra agrícola y menos mariscos.
  • Poniendo más vapor de agua en el aire, haciendo áreas mojadas más mojadas y causando dañosas tormentas e inundaciones.
  • Haciendo unos lugares tan calientes o inseguros de comida o agua que con el tiempo no podrán sostener la vida humana, causando flujos masivos de refugiados, guerras o ambos.
  • Empeorando la calidad de aire, ya que climas más calientes producen más contaminación clásica de aire como ozono cerca de la tierra.
  • Etcétera

¿Son todos los países tan polarizados que E.U. cuando se trata del cambio climático?  No.  En la mayoría de otros países, aun los partidos conservadores aceptan los hechos básicos de las ciencias de clima.  En E.U., los Republicanos que no están negando el problema existen (por ejemplo, Arnold Schwarzenegger) pero son una especie en peligro.

¿Han los intereses de combustibles fósiles gastado dinero difundiendo mentiras en el cambio climático?  Pues sí.  ¿Has escuchado de los Hermanos Koch?  Además, grandes empresas con acciones publicamente vendidas han pagado por mentiras, aunque sus informes internas muestran que han entendido este problema por décadas.

Soy muy deprimido por todo esto.  ¿Hay muestras de esperanza?  Demonios sí.  Paneles solares son 99% más baratos que eran en los años 1970s y tenemos pilas y represas en que podemos almacenar la energía que generan usar más tarde.  Hay una tecnología llamado energía solar térmico concentrado que usa muchos espejos reflejar la luz en un torre grande (por ejemplo el Sistema Ivanpah de California).  El torre es lleno de sal que calienta y el calor da poder a un generador eléctrico, aun durante la noche.  Poder del viento crece rápidamente mientras que su precio baja.  Vehículos híbridos existen y pueden ahorrarte dinero.  Vehículos híbridos enchufables y vehículos eléctricos existen, son más baratos y mejores que jamás han sido y están mejorando y llegando a ser más baratos cada año.  Bicicletas y patinetas eléctricas crean cambios en ciudades alrededor del mundo.  China construye energía renovable rápidamente.  California tiene un sistema de tapa y intercambio y requiere que cada vez más de nuestra electricidad venga de fuentes renovables (recientemente fortalecido mucho por SB 100).  Dietas con cantidades más bajas y saludables de carne y productos lácteos (especialmente menos carne de vaca) cortan emisiones de gases del efecto invernadero mucho.

Y claro, hay la planificación urbana.  Sé que lo digo todo el tiempo, pero aquí es otra vez: a través del urbanismo (construyendo densamente, mezclando usos de tierra, diseñando calles para múltiples maneras de viaje) podemos bajar tanto las emisiones de combustibles fósiles.  El urbanismo significa que no tienes que manejar tanto o no tienes que manejar ni un poquito.  El alojamiento multifamiliar es mejor aislado y por tanto usa menos energía.  También ahorra tierra y agua, significando que hay más hábitat natural lleno de plantas convirtiendo CO2 al O2.  Tenemos tantas herramientas.  Hay tanto más decir.  Lee el libro y nunca dejes de luchar.  La lucha todavía te necesita.