Real property is, in some meaningful ways, different from goods and chattels. It can be improved but not manufactured and of course cannot be relocated. It doesn't matter how much demand there is, some new real-estate entrepreneur isn't going to disrupt Palo Alto with $150,000 detached single family homes.

In so far as real-estate is a product, differentiation between quality and price points is primarily a function of location...as Peter Thiel might put it [but probably doesn't], each lot is a monopoly. There is cheaper housing in Detroit and solely based on the opportunities afforded by location and not necessarily the nature of improvements one might deem it of lesser quality than a similar structure in San Francisco.

Anyway, I've been involved in a bit of housing development over the years. The few developers I know who do affordable housing specialize in it [as the many upmarket developers do in the upmarket]. Developers who don't specialize in affordable housing typically don't do it. The market analysis and proper institutional investors are not orbiting the market rate housing and general commercial development herd...and most developers stick to their track record.

Yes, real property is different from goods and chattels in meaningful ways. But I don't think your initial arguments for a dearth of affordable property exploit on any of them.

In California newspeak, "affordable" housing means government-subsidized housing, while "luxury" housing means any housing built for profit (even if it's tiny studio apartments).

I assume you are excluding the government subsidy of the mortgage interest deduction for the "luxury" housing?

> In California newspeak, "affordable" housing means government-subsidized housing, while "luxury" housing means any housing built for profit (even if it's tiny studio apartments).

This is false. Direct subsidies are one of many means used in California to achieve targets for affordable housing, but affordable housing does not mean subsidized housing. That's particularly important in the context of this proposal, a key part of is proposing additional non-subsidy mechanisms to encourage affordable housing (by reducing the local-review barriers to new developments which include it, and reducing regulatory barriers to new units on existing lots.)

IME, that's how the word affordable is always used; do you know of any counterexamples? SPUR had to come up with a new term, "affordable by design", to distinguish housing that was built to minimize construction costs from housing that was government subsidized (http://www.spur.org/publications/spur-report/2007-11-20/affo...).

When bills like this talk about "affordable" housing in new developments, they don't just mean "the rent in this unit has to be kept below $X per month" (as in rent control). The "affordable" units are turned over to a government agency, such as the Mayor's Office of Housing in San Francisco (http://sfmohcd.org/), which administers them and decides who gets to live in them. For example, last year, the city of San Francisco decided that people who lived in the same neighborhood as a building would be first in line for that building's affordable units (http://www.sfexaminer.com/affordable-housing-lottery-being-t...). The building owners' approval was not required, because the program is run by the city.

> IME, that's how the word affordable is always used; do you know of any counterexamples?

Well, the most relevant counterexample here would be the California Health and Safety Code Sec. 50052.5 [0], which provides the cost-based definitions of "affordable housing" which apply to various income tiers (which are also those relevant to the present proposal from Gov. Brown.)

(These definitions are often prerequisites to certain subsidies, but it is meeting the definition, not the subsidy, that makes it "affordable housing".)

> The "affordable" units are turned over to a government agency

Proposals (including the present one from Gov. Brown [1]) conditioned on a certain share of affordable housing usually require that the developer make a commitment that they will meet the applicable cost-based definition of "affordable" for a period of time, and that that commitment will be enforceable by a public agency (the present proposal requires that this be done by the developer recording a land-use restriction enforceable by the public agency.)

This does not require that the property be turned over to (or even managed by) a public agency, though certainly there are affordable housing developments that have occurred where there was either direct ownership or management of the units by a public agency, nor does it require that the housing be subsidized in any way (though at the "lower income" tier, the population for whom they are targeted to be "affordable" to is also the population eligible for Section 8 housing subsidies, I believe.)

[0] http://www.leginfo.ca.gov/cgi-bin/displaycode?section=hsc&gr...

[1] http://www.dof.ca.gov/budgeting/trailer_bill_language/local_...

You point to two cases where the legal definition of "affordable" doesn't refer to subsidies, but don't the large majority of those units, in point of fact, enjoy subsidies? Your precision is helpful, but apsec112 could still be basically right. ("California newspeak" clearing referring to the way words are typically used, not legal definitions.)

FWIW, I have never understood "affordable" housing to have that connotation.

In my experience, as appears to be the case here, local governments often "encourage" developers to offer below-market-rate housing as part of the residential zoning rules. Here's an example: http://gothamist.com/2015/12/18/de_blasio_zoning_affordable....