NIMBY build for the homeless solve for the equilibrium

At an average cost of $531,373 per unit – with many apartments costing more than $600,000 each –  building costs of many of the homeless units will exceed the median sale price of a market-rate condominium. In the city of Los Angeles, the median price for a condo is $546,000, and a single-family home in Los Angeles County has a median price of $627,690, the study states.

Here is further information, via Rob Moore.

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I don't understand. They give apartments for free?
They why won't more people come to be homeless in LA?

Because you aren't allowed to mention that. If nobody talks about how Angelenos taxing themselves heavily to pay for services for the homeless is just attracting more homeless to L.A., the rest of the world will never think of the idea of moving to L.A.

In this podcast Jenny Schuetz claims the homeless in coastal California are locals.

99% of the homeless are in this situation because of addiction or mental illness. The idea that they are their because housing is too expensive or unavailable is ludicrous.

Side note: If you want to make more housing available and cheaper in California then begin an active effort to find and deport illegal aliens.

Won't be anyone to build the housing then. Prices will not fall.

Not exactly. The vaunted Prop HHH ballot measure was promoted mostly by the trades unions, and it specified that all the new housing was to be constructed by union workers and at prevailing wages. These aren't the hard-working immigrants. California voters are not particularly discerning about motivations when presented with noble-sounding initiatives.

This requirement is by no means the only reason why construction is so expensive in LA or, indeed, anywhere within 25 miles of the ocean in CA, but it's not nothing, either.

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I was about to say "land prices", but no.....there's more than enough publicly owned land in LA to build affordable housing https://la.curbed.com/2019/7/3/20681291/map-public-property-los-angeles

Do you notice that the map shows the bed of the LA River as available? I think they are stretching the meaning.

Indeed, not all public land (rivers and mountains) is good for housing. But, there are other flatter areas East and West of the river.

Maybe there is land genuinely underutilized and buildable, but I find this 10,000 foot view not very useful.

The fact that they did include river floodplain means that they were not very serious. The LA River is usually a trickle but occasionally inundated. The land-use has to be ready for the flood.

Read a bit more...

"The map could provide useful data for some LA city council members who have blamed high privately owned land prices on their inability to build supportive housing and shelter projects. In May 2018, over two dozen city-owned parcels were identified where council members could build emergency homeless shelters. One year later, only three of those shelters had been opened."

What does that even mean? "Identified," idle, and uncontested?

For instance, no one "identified" a bus yard full of buses?

As I say, there may be some, but it's really easy to write a hit piece glossing over details.

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By the way, the big blob in the top center of that map is:

https://en.m.wikipedia.org/wiki/Elysian_Park,_Los_Angeles

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"Prices rose dramatically because of higher-than-expected costs for items other than actual construction, such as consultants and financing."

Those will increase with density though. They also increase when you need to do demolition vs .. say it together .. greenfield construction.

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Businesses and people/workers/customers are attracted to LA because of public colleges, universities, parks, sports, entertainment which also require large parking areas, but much less costly streets, water, sewer, k-12 schools.

So, given the large inflow of people from lower tax States, lower population States, attracted by the economy created by the people attracted by the public services from other States offering less public services, the solution is to turn the public land for universities, parks, etc, into private land?

I grew up as a boomer in Indiana, with before 1970 taxes being hiked to deal with growth, then tax hikes blocked, and the small cities i grew up in shrinking steadily from 1970 until 2000. I left Indiana mid-70s but stayed in the area until 1980. I returned several times to visit friends and each time things I liked kept vanishing. I imagined making my fortune in New England and then returning to Indiana, the college town I left, Richmond, the general decline was depressing. Maybe things have gotten better since 2000....

I still think I'm an outsider after almost 40 years in NH, but even during hard times, NH gets better even as housing prices reach crisis highs of unaffordability and the debate over how to increase supply of starter homes continues into soon to be its fourth decade. The last decade of high rates of new housing was the 80s, ending with a huge number of housing units underwater or in foreclosure by 1990.

The problem with LA, SF, Boston, etc is their economies are so much better than Red America like small town and city Indiana, Kansas,....

"So, given the large inflow of people from lower tax States, lower population States, attracted by the economy created by the people attracted by the public services from other States offering less public services"

But Cali has had a large net outflow for many, many years

Sorting.

+1, California is sorting for a high percentage of poverty.

We've shared this map before, right?

California is sorted, the US is sorted.

That’s not adjusted for PPP.

It’s completely worthless. It’s actively disseminating false information.

We have tools for this, it’s called U.S. Census Bureau’s Supplemental Poverty Measure.

Poverty rate California: 23.8%
Texas: 16%
US: 16%
Iowa: 8.6%
NY: 18.1%

+1, the science is settled.

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Not sure about these units, but many cities require a minimum number of moderately priced units within a larger project of mostly expensive units. There is then a lottery for the right to purchase the moderately priced units. I can see the pros and cons of this approach to housing in cities, but reporting the average cost per unit in construction costs is misleading - one cannot build two units in the same building at radically different costs. My good friend lives in Boston, and she reports that the lottery for moderately priced units in a new project is like, well, Christmas for the lucky winners. [An aside, that's not to say that today's construction techniques can't be improved. In my part of the low country there are no reservations for people of moderate means, so the increasing cost of housing (rents) is forcing people to find housing at greater and greater distances, which means that the quality of the service labor declines. This is becoming a major issue in Charleston, where gentrification of upper King is forcing families to move to the burbs. Several celebrity chefs have recently left Charleston because they can't produce consistent quality food without quality employees.]

Wouldn't it be better to analogize that the lottery was like...well...winning the lottery? ;)
That method has always struck me as a stupid and random (literally) way to create "affordable housing" - have builders add a few units and then allocate them by chance to a lucky few.

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A lottery best describes the process here. A friend's nephew went through it and won. Her impression was that competency in navigating the process was a factor. He got a sweet little place.

One such deal, which died of endless haggling amid the downturn, would have required the developer to ensure that, specifically, music lessons were offered in the first floor retail space.

I'm not sure if those would have been awarded by lottery as well. I picture receiving the summons with dread, gathering up my old John Thompson books, brushing up on my Spinning Song.

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Nightmaresvilles, no doubt about it.

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The reason homeless people are homeless is because they can only live in wealthy homes--which they can't afford. When you build for the homeless you're building for the richest of the rich.

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Nicely buried in the last few paragraphs: "one of the city's oldest religious-based facilities...is building a large fabric structure, complete with heating, air conditioning and access to clean restrooms, that's expected to last for decades...at a fraction of what the city is spending." I guess that's the difference between spending money that is voluntarily contributed vs. spending Other People's Money that is obtained by coercion (taxation).

There are lot of Hogs at the trough when the city builds. Every union, consultant, legal council, environmental group, political donor, etc expects their share of the cut.

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I've been trying to tell you that building in LA is hard. Maybe this is a case in point.

And note that the excerpt makes the wrong comparison, to the existing housing stock rather than the costs and price for similar new construction.

Geez, this page claims that the median selling price for a new condo downtown is four million dollars!

https://www.buzzbuzzhome.com/us/place/los-angeles-ca

Tyler, do *you* Google?

The question isn’t whether building in LA is hard. It’s why. Here’s a hint, it’s entirely self inflicted.

Btw, those new $4 million condos are over 2,300 square feet at the median.

2,300 square foot luxury high rise condominium in downtown LA is $4m, not exactly shocking.

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I suppose the challenge would be to find a city where the builders are going after a $4M condo market *and* there is somehow affordable housing.

I'd guess you wouldn't find it in the US, but maybe someplace like Singapore with a high percentage of government built properties.

(Over 80 percent of Singapore's population lives in housing constructed by the country's public housing agency HDB.)

Denver for an overall lower costs contrast:

https://www.marketplace.org/2019/05/31/where-have-all-the-condos-gone/

When new market condos go for $440k, it's easier to do "affordable" for $185k.

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How is that relevant in any way? They're not trying to build luxury condos downtown. At these prices, they could save money by not building anything. Just buy existing houses and use those.

All of the same costs are faced by the commercial builders. If there was so much land and easy building they'd have to offer at a low price, like in Denver.

So you are asking the city to find precious land, build in the same costs environment, and come in how low?

Right now they are almost ten times cheaper than the commercial offering. We could wish for better, but maybe that isn't terrible.

(I'm sure someone studied just buying properties, but dispersed and varied units would have higher management costs.)

They could literally buy up homes in the suburbs and cram 10 homeless people in them for less money. A lot less. Like 1/10 the cost.

Or buy up 10 adjacent home lots and build a large shelter.

Of course, that’s illegal due to zoning restrictions...

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For that amount of money, you could buy an entire neighborhood in Cincinnati.

And bus tickets....

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Just out of curiosity, what's the average investment made by the occupant in a home in one of Rio de Janeiro's favelas?

Investments in favela housing has been well studied. I will provide references in due course, but you could check Google Scholar in the mean time.

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No idea of what NIMBY has to do with the city's incompetence.

The notion that the only answer to housing shortages is to eliminate local zoning authority appears jejune at best. In LA the building code contributes significantly more to housing costs.

More advanced countries have done tremendous work in legally accommodating informal housing.

In Brazil, for example, it is not uncommon to see informal housing constructed in highway cloverleafs and along highway right of ways. And the legal system affords some rights and protections to such informal housing even though it does not meet building code requirements. You can get commercial water hookups in most favelas.

Since Trump is so interested in California, he might solve the homeless problem there by opening the thousands of acres of land running along federal highways to informal housing. Rather than living in tents, the homeless could stack some cinder blocks, weight down some tin sheet roofs, and have more permanent and secure residences. Port-a-potties and water stations could be provided by local authorities at a tiny fraction of the amount they are wasting now.

At any rate, the usual government housing program solutions are unsustainable. The USA would be better off getting out ahead of the growing informal housing sector and borrowing some legal parameters from countries with experience and that benefit from having had concerned intellectuals think about the issue.

If you consume the land next to the highway, then it becomes harder to ever improve the highway. I would consider that extreme short sightedness.

They are desperately trying to widen all the freeways they can right now.

https://www.latimes.com/local/lanow/la-me-405-widening-20180127-story.html

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Its actually the perfect idea for exactly that reason. It makes use of unused land without that land becoming legally entitled to anyone but the DoT.

Who exactly would complain about forcing the move of homeless living in temporary cinderblock houses and portapottys to widen the highways? And what mechanisms would they have to stop it? For the cost of a dozen flatbeds (that you need to drop off supplys to build the highway anyway) for an afternoon you could even help them move, coordinate a date with the builders to clear the construction zone. Its certainly better than living in a box or under a tarp.

Far from being shortsighted, its actually quite forward thinking.

This is part of the problem, you consider a cinderblock house temporary. Therein lies the crooks of the cost disease.

Also, people will protest mass eviction of homeless people, unless they happened to be 100% white male.

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John Stuart Mill justified the establishment and expansion of European settlement in the New World with the Enlightenment theory that since the land was not being used, at least by the methods of the European immigrants, it was perfectly reasonable for them to take possession of it and improve and exploit it. That Enlightenment thinking hasn't survived or vacant lots, empty houses, abandoned factories and warehouses could be turned into homes for anyone. It would also open the parks, forests and wild life refuges, practically all federal land, to settlement. The feds might be more effective in defending it than the native Americans were, however.

It's in the Bible. Also justified the creation of modern nation-state of Israel. The Japanese borrowed the idea which justified their expansion after so-called Meiji Restoration (明治維新).

Too many references to cite but one convenient summery is Nations and Nationalism since 1780, by E. J. Hobsbawm, (2nd ed.) Cambridge UP, 1992.

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You have the temerity to say that they're talking to you out of jejunosity???

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From the article:

"Prices rose dramatically because of higher-than-expected costs for items other than actual construction, such as consultants and financing. Those items comprise up to 40% of the cost of a project, the study found. By contrast, land acquisition costs averaged only 11% of the total costs."

Interesting to compare the facts to some the comments above,.

Just think of the consultant's children. Who will think of their children?

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Tyler's late to the party. Alex scooped him by a month and a half: https://marginalrevolution.com/marginalrevolution/2019/10/get-government-out-of-the-construction-business.html

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Why not just *pay* the homeless not to camp out in front of your home or business? how about paying them to keep other homeless from camping out in front of your home or business? Wouldn't this be much more effective and cheaper than the millions in taxpayer money that's being wasted on projects like these?

They should give a tax incentive for people/business owners to deputize the homeless to police homeless behaviors.

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Here in Ganiesville FL, where sufficient building has been allowed, my son, about 5 years ago bought a NICE Condominium for $44,000.
If you cannot build public housing for $30,000 a unit some thing is wrong.

Is the cost due to pricey land? Or pricey buildings?

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I was prepared to write something snarky about how that could not possibly be true, but first I went to Zillow and checked. Wow, there are tons of decent-looking single family homes in Gainesville for $50K or less. Now rethinking my retirement plans.

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If California's homeless had an actual advocate in Sacramento, that advocate might propose legislation allowing Californians of means to adopt the homeless . . . as pets.

Pets contribute little that is practical in domestic/household function. They are welcomed into homes commonly to provide affective lift to the caring inhabitants, who get to practice responsibility themselves by caring for the pet, grooming the pet, maintaining the pet's health with visits to credentialed and certified veterinary clinics, et cetera.

California's pets (dogs and cats, commonly) might be dismissive of such efforts and alarmed at the competition, so bites and scratches may be inevitable.

Pets can be housebroken and are loveable. The homeless, some perhaps but the others not so much.

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“Homelessness” is a problem only because people would rather have the problem, and it’s many associated rice bowls, than solve it.

You can buy a new mobile home for $50K or less.

I suspect if you were to order a thousand, you could get a deal.

New shipping containers (8x40) are about $2K. Fitted out as a mobile home, they could be stacked 3 or 4 high.

There would be some site prep costs, water and power hookups, but it’s hard to believe it turnkey cost more than $75K per unit.

Look at what the military does for forward bases, or housing for remote work camps. Simple functional housing.

And there is no reason these units should be on expensive beach front or urban property.

Of course, if you fill the units with crazy junkies ... you have other problems.

The lack of inexpensive housing in very high cost areas is a different problem.

From the article:

" The average annual cost per toilet under the city's Mobile Pit Stop program is $173,930 for the permanent ones and $320,325 for the temporary portable ones."

The city is paying $320K per year for a portable toilet. They are so corrupt and incompetent that what they actually could do is pretty irrelevant. This is about Hogs feeding at the Trough, not providing a service to the needy.

At the end of the article:

"The Union Rescue Mission, ... is building a large fabric structure, complete with heating, air conditioning and access to clean restrooms, that's expected to last for decades ... He said the facility will be built at a fraction of what the city is spending to build apartment buildings."

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The homeless problem in LA is not a housing problem, it is a mental health and civic law problem. Over the last ten years, the millions of immigrants from poorer countries have not become homeless, they have found places to live and are making lives for themselves.

For the homeless, the lack of mental health support, and the self-inflicted inability to move people off the streets and when necessary into treatment is directly resulting in 2 to 3 deaths *per day*, is causing fires, and is risking massive outbreaks of medieval diseases.

Framing this problem as a housing issue is blindingly immoral. It is not compassionate to let people's mental illnesses escalate due to lack of treatment, it is not compassionate to let people die on the streets.

edit -- "and the city's self-inflicted inability"

not the homeless folks' inability

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The deinstitutionalization of the mentally ill in the 1960s has been a failure. Community treatment is a crock; many of these people do not have the wherewithal to show up their appointments. Bring back the large state mental health hospitals, or create housing campuses away from the city center that have mental health treatment centers on site.

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There is no compelling reason to try to house them in expensive, congested areas. Like many universities, mental institutions (assuming there's a difference)--where a large portion of vagrants should be housed--can be located in cheaper outlying areas.

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The only real solution is to set and strongly enforce vagrancy laws. This could be supplemented with funding of homeless shelters. For those unable to handle shelters, I would suggest a teepee or tent and a porta potty in designated areas. For those in cars (their are lots of them), I suggest designated parking areas with porta potties and strict enforcement of limits on parking outside of approved areas.

Any violators of the above need to be severely addressed. These people are spreading hepatitis and other diseases into the city, and especially into the beaches. This is going to be a public health crisis.

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How many LA people are homeless and employed also? I bet not many.

So here is the deal. If you have no job, what difference does it make where you live? You can be jobless anywhere.

So if the issue is having a home to live in, do it as cheaply as possible. Let's buy land in Nebraska or rural Michigan. Build inexpensive housing there. Land is, well, dirt cheap. Labor costs are low. Move the homeless to the cheap housing.

Then in LA, use vagrancy laws. You can live in Nebraska in an apartment, or you have a term in jail.

My proposal will expose the reality that no one wants to talk about. Many of the homeless prefer their lifestyle, and want to live that way in a warm climate. And bumming for money or petty crime is a way of getting money that you can't do in rural Nebraska: no one to victimize.

You can't solve a problem you can't name.

BTW, how many Hollywood liberals are building apartments for the homeless in Beverly Hills?

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The natural flow of housing markets is that those who can afford it get new housing, those who can't afford that get almost-new, and so on down to those who can afford only very old housing, complete with its functional obsolescence (one electrical outlet per room? An 18-inch wide bathroom door?) and natural deterioration over time.

Except that we in our wisdom seem to have decided that it somehow makes sense to build brand-new housing for the poor. And then we're shocked at how much this housing costs (and how rapidly it deteriorates, not necessarily because of how well it may have been built but due to the low social capital of those living in it).

Can there be any more inefficient, economically perverse system than building brand-new housing for those who can't afford even old, well-used housing? It's almost as if spending money has become a proxy for doing something actually useful, so that politicians and others can then point to the sums spent and say, "See! We really, really care!"

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https://www.latimes.com/california/story/2019-11-20/crenshaw-housing-proposal-killed-gentrification-fears

Tyler didn't link to the punchline. The city-built homeless housing is indeed older news, but at the same time perfectly acceptable housing projects like this, designed entirely to code, get rejected for "gentrification fears." When did the idea take hold that building less housing would push out he wealthy rather than the poor? Slouching towards dystopia.

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If the cost to build new housing is higher than the cost to buy existing housing, why is city hall not just buying existing housing on the open market to give it to homeless people?

The grift knows no bounds, apparently

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The distressing thing is how predictable all of this is: https://seliger.com/2017/08/30/l-digs-hole-slowly-economics-fills-back-proposition-hhh-facilities-program/.

That's from mid-2017, and the problem was obvious then. Seemingly little has changed.

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