Re:Proposition C
by btilly on Friday October 19, 2018 @01:55PM
(#18258590)
There is a subtle but important difference between solving the problem of "outrageous housing" and "affordable housing".
The difference can be illustrated by looking at how a measure meant to solve the latter, creates the former.
Suppose that we mandate that all housing created needs to be reviewed and a certain fraction of that housing needs to be set aside for affordable housing. You will indeed increase the amount of housing available at the price point that you have deemed affordable.
However the same action is a disincentive to build new housing, and also artificially reduces the supply of housing being sold at what would otherwise be a fair market price. This measure restricts supply, and in accord with economics 101 will increase average prices.
The result? More affordable housing AND a higher average price of housing. The net cost of housing goes up. (Which ironically will tend to cause more people who were on the edge of being able to afford housing to become homeless, making it likely that they lose their jobs, and thereby creating more need for affordable housing. Aren't you glad that we're doing something about the affordable housing problem to help them?)
The difference can be illustrated by looking at how a measure meant to solve the latter, creates the former.
Suppose that we mandate that all housing created needs to be reviewed and a certain fraction of that housing needs to be set aside for affordable housing. You will indeed increase the amount of housing available at the price point that you have deemed affordable.
However the same action is a disincentive to build new housing, and also artificially reduces the supply of housing being sold at what would otherwise be a fair market price. This measure restricts supply, and in accord with economics 101 will increase average prices.
The result? More affordable housing AND a higher average price of housing. The net cost of housing goes up. (Which ironically will tend to cause more people who were on the edge of being able to afford housing to become homeless, making it likely that they lose their jobs, and thereby creating more need for affordable housing. Aren't you glad that we're doing something about the affordable housing problem to help them?)