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So far four SB 9 lot split applications have been submitted to Atherton. Via Google Maps.
With California’s new lot-split law in effect, Atherton has received four applications to subdivide properties and build new homes since late February. And the town expects more to come.
Although property owners have yet to apply for building permits to start work on the sites, the applications mark the first step in the process to add homes under Senate Bill 9 (SB 9). This comes at a time when residents have expressed concern about more development in town.
The first application, filed with the town on Feb. 22, seeks to subdivide 78 Cebalo Lane, adding another home on the southeast portion of the about 40,000 square foot lot. The property, on a cul-de-sac off of Selby Lane, was last sold in November 2021 for about $4.5 million, according to Sotheby’s International Realty.
The second is at 2 Lowery Drive, in the Lindenwood neighborhood, received by the town on Feb. 25. The owner would like to build two new single family houses, each with one attached smaller unit. The home sold for $5.6 million in December 2021, according to Compass real estate group.
The town received a third application for 125 Glenwood Ave. on March 31. The most recent application was for 94 Palmer Lane, submitted on Wednesday, May 4. The Palmer Lane home sold in March for about $4.8 million, according to Zillow.
The projects rely on SB 9, the state duplex law that took effect in January, that requires local agencies to grant ministerial approval to certain lot splits and up to two primary units on each resulting lot, with 4-foot minimum side and rear setbacks. Projects don’t need to be approved by the Planning Commission or City Council and are handled by town staff without discretionary review or a hearing.
Owners can already add accessory dwelling units (ADUs) or junior ADUs to their properties, but SB 9 allows an owner to create a new lot. The owner can subdivide an existing parcel to create no more than two new parcels of approximately equal lot area. The new parcel must be at least 40% of the original parcel’s size.
Owners must sign an affidavit that states they will live in one of the units as their primary residence for at least three consecutive years, a requirement added to the law to reduce investor speculation. The law also prohibits the development of small subdivisions and prohibits SB 9 lot splits on adjacent parcels by the same person.
If the lot splits are approved, then the applicants can then apply for building permits, said Assistant Town Planner Ralph Robinson.
There have been two other initial inquiries about SB 9 lot splits, he said.
How much new housing could Atherton see?
SB 9 could result in about five new housing units per year in town, according to a February staff presentation. This would result in about 40 new units that would go toward the town’s 2023-31 Regional Housing Needs Allocation (RHNA) numbers. Atherton is required by the state to plan for the development of 348 new housing units compared to just 93 during the prior eight-year cycle.
SB 9 projects are more likely to take place on properties with an older residence, staff noted. There are about 606 parcels in town greater than one acre with a main residence built before 1970, and 687 parcels greater than one acre with a primary home built before 1980, according to the town. The survey didn’t include “Atherton acre” lots, lots slightly smaller than an acre, or about .92 acres, which predate the town’s one-acre-minimum lot sizes, town officials noted.
The most financially viable option for most property owners will be to split the lot and built one single family home on each lot, the presentation states.
Neighboring towns and SB 9
So far, the neighboring towns of Woodside and Portola Valley have not received any SB 9 applications, according to their town managers Portola Valley has received two inquiries about projects, said Town Manager Jeremy Dennis in a Friday email.
Both towns have stricter limits on building SB 9 projects. For example, in Woodside, just west of Atherton, officials passed an ordinance to limit SB 9 unit sizes to 800 square feet, and prohibited basements. Portola Valley also limits SB 9 buildings to 800 square feet.
Woodside made news earlier this year when the Town Council froze all SB 9 applications, citing an exemption for mountain lion habitats. Woodside reversed the decision when State Attorney General Rob Bonta told town officials they could not evade state law.
Our residential zoning requirements are basically meaningless now. Is this the beginning of the end?
As was revealed last week, our City Council members are funded by the developers and realtors driving and supporting such changes so I am pessimistic that our MP City Council will act effectively to defend our city against urban sprawl. I strongly encourage fellow citizens to exercise their voting power prudently with upcoming elections, at the city and state levels.
I think the public should know that not all realtors are in favor of SB 9 and SB 10. There are many of us who make our living selling homes here and are quite upset that these laws will quite negatively change the fabric of these beautiful communities. Adding another smaller unit is one thing, but when your neighbor will be allowed to split the lot and build 2, 3, 4 or more homes (depending on the lot size), the look and feel of our existing single family home neighborhoods — properties for which we have all paid dearly and continue to pay for dearly via property taxes — will not be the same. Not to mention the loss of privacy you will experience when your neighbors become multiple neighbors rather than just one neighbor. The state has unilaterally decided that this one-size-fits-all approach is the answer to affordable housing. Whether those people in need of affordable housing will actually be able to afford newly built small homes in our mid-peninsula cities is a big question. More likely our beautiful and spacious parcels will migrate to higher density and still be “unaffordable.” This is one of the state’s largest grab on your property rights ever and I hope homeowners are paying attention and demand their city council members resist this overreach and object to the constitutionality of SB 9 and SB 10. Other cities are suing the state over this. Zoning should be controlled locally — not by big government.
Mary, unfortunately the Atherton town council is just rolling over on this one.
The Menlo Park majority council (Jen Wolson, Betsy Nash and Cecilia Taylor) are also rolling over. So, there needs to be a grass roots effort by residents who care to maintain the character of our single family zoned neighborhoods. First of all, someone needs to tell us what “affordable” housing is in our geography. Seriously, what are our leaders thinking will be classified as “affordable housing” here? That should be the starting point. This seems to have been lost along the way….
Well said, Mary. Again, I strongly encourage voters to use their voting power at upcoming City and State elections.
You can thank Zuckerberg, Cook, Ellison, Brin, Page, Schmidt et al for the destruction of the Peninsula; in fact the whole Bay Area. ‘You can never go home again’! Face it … it’s OVER!
Mary:
Good comments.
“Affordable housing” in this area is a LIE. It is being pushed by politicians that want to be seen as “doing something” about the “problem”. They always bring out the old, “it’s not fair that workers in our community can’t live here”. It’s nonsense. The low paid workers in our community will NEVER be able to afford to live here. I don’t care how dense you make it as the numbers (land value and construction costs) simply don’t pencil to anything close to something they could afford. I work in Atherton building homes and I’d like to live in Atherton. It’s never going to happen even if property owners there subdivide their properties. The land acquisition cost alone precludes it.
SB9 (and RHNA) are state mandates which local towns/cities are required to comply with. Our local officials have no choice but to allow ministerial lot splits (SB9) and to create zoning opportunities for increased density (RHNA).
State Senator Scott Wiener calls single family housing immoral. California Attorney General Rob Bonta actively encourages citizen groups/organizations to report instances and towns which are seen to be blocking both SB9 and RHNA so that his office can threaten to bring legal action against the same towns.
We need to stop electing people (Rob Bonta who is on the current ballot) to state office who seek to impose top-down policies without the consent of those they govern.
Our problem isn’t our Town Council.
Betsy:
you’re kind of right. Most of the problem is at the state level. Comrade Weiner being one of the top problems. That said, there are many cities and towns that aren’t just rolling over and are pushing back with lawsuits. Our council needs to do the same.
I don’t see SB9 as creating affordable housing. But it’s a lucrative opportunity for anyone seeking to buy a house and remodel it greatly. They could buy an older house in Menlo Park for $4 Million on a half acre, or they could buy for $5 Million in Atherton on a full acre or more. In the past Atherton was more expensive.
But now all they have to do is split the lot before their rebuild. Voila, they can sell that chunk of land bare for $3 Million. Its competition is a teardown in Menlo Park which could cost much more for the same amount of land. Meanwhile they end up with a half acre parcel in Atherton for a net cost of $2 Million–much much cheaper than Menlo Park.
But this is just a form of speculation because it pumps up land values and encourages building of large brand new houses costing millions of dollars–not affordable housing.
Mary, Jon, under SB9 you can split a lot once, You can then build one primary home plus one secondary home on each lot, “not more Mary”
If you build 4 new structures You must own 2 of the subsequent homes on one lot and live in one for the next 3 years. Would you then rent the other new structure during those 3 years? and build or sell on the other lot? Do your research.
Don’t forget the cost of not just construction at at least $500 a sq. ft. plus the hundreds of thousands of dollars you will spend on soft costs, permits, Fees, PGE costs, Sewer/wate hookups, architects, etc. before breaking ground, and the 2 years of processing and building. That’s a lot of money for the average homeowner to have in the bank as discretionary funds and builder/developers will not build to then live in one of the new structures. They like to build and move on to the next project. Do your homework.
Will the average homeowner have that expertise and the cash laying around because not many lenders will want to get involved before the properties are built unless you are a builder and have a construction loan history with a lender They will not loan to the average homeowner, self developer.
Make sure Jon if you buy and build new that the property had not been used as a rental in the last 3 years. Sorry, not allowed. Even prior to you purchasing it.
Sorry Mary, Jon, The RHNA is law, and I guarantee the state has more funds to go after any city trying to get around it.
Make sure you understand the setbacks on the property you purchase. It may not be practical to buy remodel and build another new home on the lot you plan on keeping or the newly created lot, This phase is critical.
SB10 is totally discretionary by each city jurisdiction, it is not mandatory to develop according to SB10 by the state, Someone can not approach any city and say I want to build 10 new Town Homes on my lot. Not going to happen. Check with your city planning dept’s
MV as a builder please check my numbers
per “Jon”
“But now all they have to do is split the lot before their rebuild. Voila, they can sell that chunk of land bare for $3 Million. Its competition is a teardown in Menlo Park which could cost much more for the same amount of land. Meanwhile, they end up with a half-acre parcel in Atherton for a net cost of $2 Million–much much cheaper than Menlo Park.” and “Voila”
Jon in addition to the above, If you plan on keeping an existing structure would you then build a new second home on that lot? Also, make sure the newly created lot is at least 40% the size of the lot you are keeping,
Also make sure the home on the lot you are keeping complies with the setbacks, Unless it sits off to one side “very unusual” chances are you will have to knock it down and build 1 or 2 new structures because you will have to live in one for 3 years.
Can you afford to live in a brand new home in Atherton with a combined land and construction cost of over 6 Million Dollars. Where would you live while the new construction is going on for 2 years? Are you financially and time-wise prepared for that because that’s what’s involved?
If you have a mortgage make sure you can pay it off before subdividing. Likely you will not get a new loan until after you subdivide and build new 2 years later.
If you want to do an SB9 lot split in Atherton make sure your lot was subdivided prior to 1946 because the setbacks on lots subdivided after 1946 are very restrictive.
If you decide to build A new home in Atherton, It will most likely be capped at around 6,000 sq. ft. including a basement. Sorry no mega-mansions on the new smaller lots. but at $500 sq. ft. that’s still $3M in construction costs alone, plus soft costs, plus property taxes as they are substantial in Atherton, for 2 years, Make sure you have that much cash lying around because getting a loan for developing and building that, is difficult at best.
“Voila” it is not
MV as a builder please check my numbers,
Westbrook:
if anything your numbers are on the low side. Homes are being built in Atherton for between $800 and $1200 per sf. And $800 is probably a little low. Soft costs will run you at least 15% of the cost of construction, maybe more. Run those numbers and you will quickly see how “affordable” housing is a lie.
Was just looking at the 2 Lowery Drive lot which has a lot of large trees. Does SB9 override the town’s heritage tree protection? If not, I’m not seeing how 4 homes could be built there.
SB9 doesn’t REQUIRE 2 units on each parcel. The most common case is actually going to be the old standard of a single home even with no subdivision. SB9 overrides local ordinances and zoning regulations as to setbacks and requires ministerial approval of design using objective design standards–not public hearings.
It’s a steaming pile that may well be unconstitutional regarding the state constitution in a number of ways, but this is what it requires.
As for tree preservation, such ordinances are only valid when they can be construed as NOT taking property rights from the land owner. This means they can regulate if there is an alternative, but they can’t say prohibit construction because to do so would require tree removal. Construction is a property right.
In response to Law ‘n Orders comment
Yes, you can also thank these founders for the increased value in your property as they brought in thousands of high-paying jobs and stock options worth many millions. These high-paying jobs and stock options are what’s driving up your property values, not the sleepy grandmother/grandfather who has lived in the same home for 30+ years protected by Prop13 and has no incentive to sell or move to smaller homes/properties.
So YES, you are correct in thanking them for your home being 1000%+ more valuable today than it would have been without them bringing in jobs to the area.
Maybe we should go back to farmland, orchids, and a depressed labor economy. The good old days when life was simple?
I look forward to one day selling my 1 acre and seeing 2 new homes for 2 new families who bring life to our neighborhoods.
Is it short-sighted to want more people moving to the Bay Area and trying to house the people already living here to be able to move into the neighborhoods they work in?
I know of 2 young public school teachers who are moving out of the area after the school year because they cannot afford to live in the area without roommates or long commutes. 2 additional teachers are leaving because their husbands are relocating to another office and they can now “buy a house for less than we pay in rent”
The alo Alto Weekly published an article (some time ago) that most of its public servants live outside of the city, commuting in daily.
Who will teach our kids, fight our fires, or police our streets if we cannot find a way to house everyone?
SB9 allows for families who can afford to “buy up” to move and vacate houses that are “more affordable” creating new affordable inventory.
There are multiple studies that show new housing at all levels creates more homeownership, and more property tax revenue.
SB9 is a start it certainly is not the final solution. More affordable housing would mean further rezoning for high-density apartments around transit hubs, THis is already signed into law but is being fought tooth and nail by the wealthy cities.
I say build it denser, build it higher, let’s bring in everyone who wants to live here make it their home.
Un unpopular opinion or possibly a silent majority?
JLincoln:
when you can figure out how to make high density high rises and the land they sit on “affordable” let us know. Talk to someone that builds for a living, research land values, then do some math.
Our schools seem to remain staffed and continue to be top notch, our firefighters seem to have figured out how to work 3-4 nights and live outside the area for their off days, and we seem to still have police protection despite the claims of these workers not being able to afford to buy a home here.
But, getting back to the main issue, I think we all have to ask the question: what does “affordable housing” mean in our geography? Is a $2,000,000 home affordable based on the income averages here? Or, are we suggesting we have homes for sale under a million that are not one bedroom 900 SF condos? Can our governor please define in terms of actual numbers what is “AFFORDABLE HOUSING” on the mid-peninsula and rich California communities who pay his salary and how is exactly is hat achieved by splitting parcels? SB 9 and SB 10 will do nothing to create affordable housing in wealthy communities where land value is off the charts and where land is limited.
Now, no one has said this yet, but I would also like to make the distinction between the “homeless” and people who cannot afford to buy homes in the rich geographies of California. When will our politicians figure out that there is a mental health crisis and address that head on rather than pretend these people on the streets who are addicts are people who simply don’t have a home to live in. A relative of mine lives in Venice Beach where there is an extreme crisis of mental health homeless. And, what are the politicians doing there? Why, as a matter of fact, they are building incredibly expensive housing where a homeless person has to qualify to live there (be clean). Guess how many are qualifying: roughly 5%.
The leaders in our state have decided that it sounds good to SAY they are working to create affordable housing for the homeless and they are taking away our rights as property owners in the process – a process based on a complete fallacy.
Mary Gilles
“”our cities seem to be staffed with teachers and firefighters”
Here is some late-night reading for you. You may or may not be aware of the struggles of teachers, firefighters, etc.
from 2016 – has it become more affordable in 2022?
https://www.ktvu.com/news/soaring-real-estate-costs-pricing-some-firefighters-out-of-the-bay-area-housing-market
MENLO PARK, Calif. (KTVU) – Long gone are the days when many firefighters and police officers could afford to live in the same community they serve. The Bay Area’s surging home prices are forcing some departments to re-think how they can get first responders to live closer to where they work.
SChools seem to be staffed with Teachers: For how long?
https://www.mercurynews.com/2021/09/13/bay-area-housing-prices-fall-hard-on-school-teachers/
Bay Area housing prices land hard on school teachers
High cost of living driving teacher turnover
Despite drawing one of the highest teacher salaries in the country, the typical educator in San Jose and Santa Clara County has a harder time affording a home than his or her peers anywhere in the United States. The East Bay and San Francisco are nearly as bad…
https://www.mercurynews.com/2021/09/13/bay-area-housing-prices-fall-hard-on-school-teachers/
Educators say the reality is few young teachers in the Bay Area are homeowners. Early-career educators in the Bay Area often share apartments with roommates and partners, live with family or commute long distances to find affordable housing. Homeownership typically is reserved for teachers with partners drawing high incomes in tech or other fields.
https://www.businessinsider.com/backlash-teacher-housing-bay-area-2019-1
“Schools want to build cheap homes for teachers in the Bay Area, where rents average $3,300 per month. Some people are furious.”
Short-sighted thinking will only cause pain down the line…teacher shortage, more expensive city services
MenloVoter “when you can figure out how to make high-density high rises and the land they sit on “affordable”
I have lived in the Bay Area since 1986 but I was president of a company for 15 years from 2005-2020 building military housing, 40,000+ units in the Mid Atlantic through the North East region. Cities, States stepped in to help secure land, we secured loans to cover land and the cost of building and builders built homes that housed families. It’s possible! It can happen. It happens all over the country
Why build 2-story townhouses when 4 stories or 5 stories would double the density? Who does this hurt? The sun will still shine in your backyard. You will still get to the office and Draeger’s and it will remain a lovely city.
Developers will build bigger and taller if they could but they are restricted by cities and NIMBY policies. It’s actually cheaper to build more than less if you cut the red tape!
I was at Peets earlier and had someone pushing the keep Menlo quaint..i kept walking
Jlincoln:
For inspiration I recommend reading about Abraham E. Kazan, Master Co-op Housing Builder in NYC. He pioneered building upwards of 100,000 cooperative housing homes. These were middle-income housing however.
It seems our neighboring city found a way to build affordable housing
Who will this offend?
Belmont approves large affordable housing site
https://www.smdailyjournal.com/news/local/belmont-approves-large-affordable-housing-site/article_2908cc68-d19d-11ec-94e4-9ba3305a4404.html
“This project is going to bring desperately needed affordable housing to our community in a sensitive and smart way,” Stone said.”
Carol Scheufele
Thank you for referencing Kazan and Co-Op City. Very familiar as Saw it for many years out the subway window and visited people living there.
Good luck getting anything like that built-in CA.
San Jose is doing a nice job to attract residents with high-density housing and companies are moving there to set up millions of square feet of office space so they can be closer to their future workers.
Progressive housing ideas seem to be all around us past and present but..here we are with an affordable housing shortage.
There are multiple references to ‘affordability’ in this thread and it might be worthwhile defining the term.
Affordability is based on primarily two factors:
Area Median Income (AMI) which for San Mateo County is $149,600 https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwjTjb-Frtv3AhU5DkQIHTMHDKcQFnoECBcQAQ&url=https%3A%2F%2Fwww.smcgov.org%2Fmedia%2F30286%2Fdownload%3Finline%3D&usg=AOvVaw2lBZ1bObBXjGErqpBVHADq
and Income Categories where:
Very Low Income is <50% of AMI
Low Income is 51%-79% of AMI
Moderate Income is 80%-119% of AMI
Above Moderate Income is >120% of AMI
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwjTjb-Frtv3AhU5DkQIHTMHDKcQFnoECAMQAQ&url=https%3A%2F%2Fwww.hcd.ca.gov%2Fgrants-funding%2Fincome-limits%2Fstate-and-federal-income-limits%2Fdocs%2Fincome-limits-2021.pdf&usg=AOvVaw3j9tZOq54RrIJ9nji6H2_U
Hope this helps –
JLincoln:
As I have said before, and you confirm, affordable housing isn’t going to be built without government subsidies. Just like they were in the situation you were involved in. My taxes are high enough already thank you.
Menlo Voter
It’s happening all around us. Just not our local cities. Cities and citizens of cities need to accept it not fight it.
The comments to this thread confirm that the NIMBY is strong amongst the community
Another example of it happening here in the hay area.
Mary Gilles: looks like they are also supporting teacher housing. Same story of teachers not affording the cost of living the Bay Area.
Atherton’s mayor just sent a letter to residents about the need to comply with the housing bill. Atheron had no idea how to get to the required housing required. Still looking for input and zoning overlay changes to the current zoning.
In today news MORE housing happening to support everyone :
The site of Marin County’s largest affordable housing development in a half century is sandwiched between $4 million homes and a maximum-security prison that houses some 2,600 prisoners.
https://www.sfchronicle.com/bayarea/article/San-Quentin-site-could-go-from-guns-to-affordable-17172343.php
How soon will the $4 million home owners file a law suit to block the development?
This whole issue is confusing about what the real problem is:
Hasn’t the population of Califirnia declined the past several years?
What long term effect will the WFH (possibly far away) trend that started during COVID have?
Don’t many fire fighters and nurses earn a decent wage now (many near or mire than $200k)?
Do we know how many “housing” units are and likely be merely airbnb or vrbo units that enrich the owners, add to traffic and utilize/overtax water and infrastructure but don’t house residents?
If local developers and realtors question fundamental assumptions about potential “affordability”, how can state lawmakers responsibly declare a different reality and force cities to enact rules based on such inaccuracies?
When the complex problems are better analyzed and contributing factors identified, any needed solutions will be more clear.
The state laws are being used as blunt instruments that are well meaning, but seemed to be unduly inflexible and not based on local or statewide facts.
After Pearl Harbor military bases were then built scattered up & down the California coast rather than in few locations, according to my mother. By the same token may I ask Sacramento Politicians why enact & push for measures that ultimately enable it seems Tech outfits/talent to further consolidate in Silicon Valley? Aside from many residents not wishing to live on top of each other figuratively speaking, how strategically wise is this any way?
Iris
“Don’t many fire fighters and nurses earn a decent wage now (many near or mire than $200k)?”
Some may make this much per year with overtime but its still not enough to buy a house or afford rent without a second income or roommates.
Teachers certainly don’t earn $200k (see links above to article showing loss of teachers, fire fighter etc in the area dating back many years)
WFH – if you look at the trend most if not all companies are returning to in person work and that will continue. FOr anyone who moved out of state they are losing the CA pay rate and getting their salaries and titles adjusted downward to the local area pay scale. A big hit to the wallet.
The propulation has declined but yet we have a housing crisis. Where did all the people who moved live? should there not be empty homes and apartments sitting on the market unsold, unrented and highly discounted? Housing prices and rents continue to go up each year. Housing here is covid and recession proof
Carol
Tech companies are already moving lower paying support jobs out of the area to less expensive states. Do you want CA to be for the wealthy and older successful stage career earners only?
If you have stock options and dual incomes of $250,000+ “Welcome to CA” if you cant afford it go work somewhere else.
Higher density does not require people to live on top of each other. Your neighboods wont be changed. There areas that can accomodate density.
Lets not fight when its proposed.
CA has the highest average:
Cost of LIving
Cost of Housing
Lack of affordability for most who did not buy a home 20+ years ago.
Commenters want:
1: Less people
2: Less traffic
3: Less homes
4: Less taxes
From these comments I get the feeling that many have their head buried in the sand and dont understand the actual crisis around us.
Many would prefer a diverse affordable community where our teachers, waiters, artists and everyone in between can afford to live. Most cannot and wont move here or move away.
You can build more houses.
You can increase density.
You can entice more residents.
You can’t make more fresh water.
California is in a drought. And Climate change is a fact, not a phase. If the State government wants to encourage and legislate for more housing opportunity, it better spend its “new found” billion dollar surplus on desalination plants up & down our coastline first.
Really great point about water. The discussion of increasing density should always include impacts on infrastructure, traffic and schools. Every other large development has to pay impact fees and mitigate traffic. Will this hold true for this brand of development?
@jlincoln “ Commrnters wsnt:
1. Less people
2: Less traffic
3: Less homes
4: Less taxes“
Really? Who said “less than” now?
Most commenters seem to want to understand why there is such a big problem, how is it that the economics will actually prove that affordable housing is possible to create in an area like this, and what new problems will arise if all these units do arrive (such as school impacts, need for even more water and more infrastructure).
@jlincoln is cherry picking examples of legally affordable housing to suggest they are economically feasible without subsidies. They are not.
The property owners for 800-803 Belmont specifically wanted to do something for the community. They eventually discounted the property sale price by 50% and intentionally chose a bidder who would build affordable housing rather than market rate housing. Their decision was a legacy gift. True Roem, the builder, is impressive, but their other affordable projects have all had subsidies. The project is eligible to families of four making between $54,800 and $146,350.
Here is a pro-forma housing costs study from the Terner Center in Berkeley. “Making it pencil: the math behind housing development” https://ternercenter.berkeley.edu/research-and-policy/making-it-pencil/
“Unpacking the factors that impact what a developer can build in today’s market helps in understanding why so much new housing is expensive, and why new supply is often only affordable for upper-income households.”
The short answer is high construction costs. Most of us don’t know that building even higher structures can be more expensive per unit, so density doesn’t always reduce unit costs.
This pro forma uses reasonable best case assumptions, and shows that housing construction is more sensitive to imposed regulatory risks and costs. What this means is that even market rate housing cannot really afford to mitigate its own impacts.
Things like earthquake tolerant and fire resistant construction are probably a good thing in California. Building codes are State not local. So the State is blaming local government for restricting supply when construction costs are equally or more relevant to restricting supply.
@PH – when and where did i suggest that there would be no subsidies? CA is working on an affordable housing department that will offer subsidies to build low-income housing. YES! everyone knows subsidies are needed to make this happen.
Read my previous comments regarding my work to build housing that was supported by state and local governments who stepped in to support the land purchase + building subsidies to get housing built.
Nonprofit home builders do exist but they also need some incentive to build large-scale project. First cities need to allow them for them to happen and so kudos to the owners of 800-803 Belmont and True Roem for getting housing built.
Need more of this to happen everywhere.
@Jlincoln I do apologize if you feel misread or misquoted.
We both agree on the need for subsidies. I want to emphasize that point, and also that because of high construction costs, market rate housing cannot be made affordable. Given the size of subsidies shown below, I don’t think California can really solve the subsidy problem.
Here’s a scrape from a post I made elsewhere.
http://ternercenter.berkeley.edu/uploads/LIHTC_Construction_Costs_March_2020.pdf
“In February of 2016, California’s Legislative Analyst’s Office (LAO) reported that California’s shortfall of subsidized housing units—affordable to those who earn 80 percent or less of the median income where they live— was about 1.7 million housing units. The LAO estimated that closing this shortfall through new construction would cost in excess of $250 billion in public subsidies, though the report also noted: “There is a good chance the actual cost could be higher.”
That caveat now seems prescient. Between 2016 and 2019, the costs to develop a new affordable unit under the Low-Income Housing Tax Credit (LIHTC) program have increased from $425,000 per unit to more than $480,000 per unit, an increase of 13 percent in just four years (after accounting for inflation). Costs per square foot have increased by 30 percent over the same time period, reaching $700 per square foot in 2019. A report by the federal Government Account¬ability Office (GAO) found that average development costs for new LIHTC projects in California were the highest in the nation, eclipsing those in New York City.
A recent LA times article shows affordable unit costs now approaching $1m per unit. https://www.latimes.com/homeless-housing/story/2020-04-09/california-low-income-housing-expensive-apartment-coronavirus
Consequences of the teacher housing crisis..but not the way to fix the problem as an individual entity buys up housing displacing others. More affordable housing!!
A problem even for elite schools: Showing how the teacher housing crisis impacts private and public campuses alike, the world-class Harker School has bought apartment buildings for its staff. The move has forced out tenants of the rent-controlled units and showed the repercussions of the housing crisis.
https://www.mercurynews.com/2022/05/30/elite-san-jose-private-school-faces-a-public-challenge-housing
PH – no worries glad this discussion is civilized. I appreciate your comments and understand the costs are ever increasing and the need for housing growing.
The issues go much further down the line,
Affordable healthcare, liveable wages, affordable staples (food gas etc)
The costs for housing construction will go up but we need to start somewhere. That somewhere may as well be the local level to allow housing closer to jobs. The bat area nonprofits and CA is stepping in with some promised subsidies. A good start!
Atherton, Menlo Park, Palo Alto should not just be for the rich techie, VC, bankers, lawyers and average home prices of $1++ million.
We have teachers, fire fighters, police, city workers restaurant workers etc etc who travel hours to work because they cannot afford to live locally.
Diverse cities make for a better community.
The initial comments to the article seemed to be oblivious to fact that these people cannot afford to live in the neighborhoods where they work. I don’t know if it’s NIMBY thinking or simply the bubble we live in?
“I don’t know if it’s NIMBY thinking or simply the bubble we live in?”
It’s actually the economic realities of where we live. Land values and construction costs are too high to do anything “affordable” without major subsidies.
San Mateo County
May 2022 residential sales/listing for single family residences
Median Price $2,080,000
Active Listings: 508
Closed sales; 466
Average days on market: 14
Good luck to all who want to love here or those who do t have access to an existing g family home, family wealth, stock options or an income exceeding $500,000 year or more