Housing construction has not kept up with new job creation over several decades. The resulting housing shortage and high cost of housing can be a drag on the Bay Area’s economic engine. The lack of inventory is caused by:
Geography: The Bay Area’s abundant waterways and hilly topography limit the amount of developable land closest to employment hubs in San Francisco and Silicon Valley.
Property tax policy: Since the passage of Proposition 13, property owners are incentivized not to sell, so they can keep their property taxes low. Some city governments prefer to develop commercial property rather than housing, because it costs more to provide new residents with schools, parks, fire departments and police support.
Local governments: Zoning laws can severely restrict the size and density of new development. City Building Departments are ill-equipped to review and approve new projects quickly. Cities within the region do not easily coordinate on regional planning issues
NIMBYs: Certain factions will oppose any change in their neighborhoods and in their cities. Developers are viewed as the bad guys. Since it is unlikely that any of the above will change any time soon, one should accept the lack of inventory as the new normal and plan accordingly.
John Solaegui,
Paragon Real Estate Group
(415) 999-0673
[email protected]
Check out the full article on SF Gate.
