Marc Joffe
Marc Joffe
With tens of thousands of California residents living on the streets and widespread concerns over a housing affordability crisis, we might expect political leaders to build a large volume of new housing as quickly and inexpensively as possible. But, of course, that has not been the case. Thanks to a combination of special interest influence and the phenomenon of “everything bagel liberalism”, under which progressives try to solve a multitude of often-conflicting problems with one policy, California governments and their nonprofit partners have been creating housing very slowly and at a high cost. A better alternative is for governments to get out of the way and allow private entities to build low-cost housing quickly without the overhead of other political objectives.
How Not to Do It
In 2016, a fire originating from a neighboring building seriously damaged 3300 Mission Street, a building that housed 28 single-room occupancy (SRO) hotel units, two stores, and a bar. Although the owner originally planned to fix the building, he sold it to Oak Funds, a local real estate firm the following year. This firm also declared an intention to restore the SRO but never did so. These two owners may have been deterred from fixing the building because they would have been required to offer most of the units to their previous tenants who were covered by the city’s rent control ordinance. The fact that San Francisco obliged the owners to rent out much of the property at below-market prices may have made repairing the building uneconomic, especially given San Francisco’s high construction costs.
Last year Oak Funds sold the still vacant building to affordable housing developer Bernal Heights Housing Corporation (BHHC) for $1 million more than it paid for the property in 2017. Since then, BHHC has been assembling financing to rebuild and expand 3300 Mission, » Read More
https://www.cato.org/blog/can-million-dollar-apartments-solve-californias-housing-crisis