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California's efforts for more "affordable" housing face a new hurdle: the large number of Californians who can easily afford their homes.
Two high-profile state-wide proposals were trying to change the real estate landscape to reduce costs. Proposal 10 would have significantly expanded the rent control options for cities; Proposal 5 would have extended property tax protections for older homeowners.
Both proposals failed by notable margins during the November 6 election.
The results suggest that the demand for more "affordable" housing has come up against what I will call the "CIMBA" group – it's the Californian "Cash in my bank account".
We have long watched development groups wrestle with the "NIMBY" audience – the crowd outside my backyard – who fear that affordable housing will be too close to their properties.
Admittedly, these two proposals could be mistaken attempts to address California's many housing problems. Rent control has been changed by opponents as a draconian solution. Tax relief for seniors' belongings appeared to be an unhelpful aid to an already rich demographic niche: older, long-term homeowners.
Nevertheless, despite all the talk of the state-wide "housing crisis", it is surprising to see this proposal garner so little support.
Conversely, voters approved two housing measures that allowed bail-out measures that would provide funding for up to 60,000 housing units for homeless, low-income households, veterans, farm workers and homeowners. mentally ill people. You think that such a development could attract opposition NIMBY.
Do not forget that proposals 1 and 2 do not change the game of the market. These were charitable intent measures, not to mention a possible relief for unsightly homeless people who could erode the values of the properties. Moreover, the expenses were easy because collective financial expenditures were only a fragment of the overall expenditures of state governments.
In my eyes, the Prop. 5 and 10 had to face difficult struggles as they were perceived as a potential threat to our real estate standards. Do not forget that to win most elections, a candidate or cause only needs a vote of more than 50%. And while many Californians feel the high costs of housing, this group was not big enough to win a major change at the polls.
Here is one of the reasons why: For a little more than half of Californians, housing is not so expensive. Leave my faithful spreadsheet, loaded with data from the 2017 Census Bureau, to show you how many Californians CAN NOT be highly motivated to ease the burden of housing costs. At least not at the polls.
Yes, it's expensive to live here. The census figures showed that a typical mortgaged California homeowner had spent $ 2,269 a month in housing, the fourth largest in the country. Meanwhile, renters usually pay $ 1,447 a month – the No. 3 in the United States.
You may think that this high amount spent on housing would facilitate any cost reduction initiative.
These same high costs are driving down homeownership rates, with only 54.8% of Californians living in a home that they owned last year. This is the third lowest rate in the country.
But if we're talking about winning elections, let's look at the data in political terms: California's low level of ownership still equates to a winning majority.
Despite many costly speeches, 61% of homeowners across the state pay less than 30% of their income in housing costs. Although this is the second place nationally, it remains a majority.
Let's take a look at California tenants, who are not as financially wealthy: only 44% spent less than 30% of their pay checks on homeowners in 2017, which is the fourth smallest share of the country's relatively closed tenants .
Thus, while the remaining 56% of households are "burdened by rent" – and could constitute a political force … it should be noted that tenant households represent only 45% of the total population of the State. In other words, the political influence of the tenants is limited.
Let us be clear: I am not saying that people who can afford to buy housing in California can not see the greatest good that comes from a healthier housing policy across the country. And these people could vote accordingly. Nor should we assume that all households burdened by housing will accept any old bailout plan.
Keep in mind that there are many well-heeled Californian "CIMBAs" who easily manage large house payments or rent checks. According to census data, for example, the median household income at the state level in 2017 was $ 71,800. Only eight states had people with higher incomes.
And real estate has been beneficial for many people because the rapid appreciation of the house after the Great Recession has created new wealth.
A new study of Attom real estate tracker revealed that 43% of Californians with mortgages owned a home valued in the second quarter at two or more times the loan on the property. It was the highest among the states; there were only 23% of these so-called "action-rich" owners in the rest of the country.
Pocketbook policy is often about the impact of politics on a person's wallet. And the "CIMBA" may feel that they have a lot to lose.
The defeat of proposals 10 and 5 therefore suggests that the CIMBA do not wish to significantly change the status quo of real estate at the polls.
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