California Needs a Housing Revolution

Good news for those holding property in CA.

The city is only 126k people, so almost 17% applied….


Everyone wants free money wether the deserve it or not.

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No… they can’t. Well at least in my lifetime.

The only answers to housing inventory are:

  1. Raise the Capital Gains exemption by $250k or more per category.

The items that will follow most on the forum will not like, but it is what it is…

  1. Remove depreciation for 1-4 unit rental properties over 4 individual units owned, Excluding Apartments

  2. Tax rental income over PITIHOA at 50%. No loan? 75% over TIHOA - also only for over 4 units owned, excluding 5+ Apartments.

  3. Raise Corporate tax on 1-4 unit rent to 85% dollar 1 over PITIHOA or TIHOA

  4. If Capital Gain exemption is $750k, but your gain is $1m, if you sell your home to a Non-Profit “Land Bank” to insure you aren’t re-selling to family, then Capital Gains Tax is -0-. This Land Bank will resell to Owner Occupied buyers.

  5. FNMA/FHLMC and any Federally Insured financial institution would then be limited to 2% of all lending (purchase or refinance) to be for investment property.

These Tax/Finance Law changes would make investment property ownership unattractive, resulting in resale inventory swelling and downward price pressures. With the wave of a legislative wand, a housing rebalance is possible.

Yes, this impacts “Mom and Pop” investors, but also the “Build to Rent” mega investment property owners. These suggestions taken now will be far less draconian than the ones the Left are considering. Here in Los Angeles for example there is a ballot measure asking Angelinos if it’s a good idea to force hotels with unsold rooms to offer them to the homeless. If you think your vacant rental property would be exempt, you clearly are misreading the tea leaves.

All other “solutions” ignore reality. So do mine, as they would never get implemented because of all the influence $$$ sloshing about.

Big changes are needed. Big changes required giant brass balls to get things done, and unfortunately we’re all out of them at the moment.

Thanks for reading.

Only price goes down, still shortage of homes since number of homes remained unchanged.

Whether rented out or owner- occupied, they are shelters.

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Will just rearrange the deck chairs on the Titanic. Will not create new housing stock. A massive building program would require subsidies and relaxation of zoning building environmental and OSHA regulations. Not going to happen. Tenants will have to double up and home buyers will have to WFH in the exburbs. The cost of construction is so high that even market rate buyers are being sidelined.

Eliminate parking will create a nightmare in the future. But might help a few projects to get built. Still costs $700k per 1000sf apartment to build in SF… $4-5k/m rent needed to support that cost

There are groups of people who want to eliminate “car culture”. Their solutions are to get rid of highways and force people to live their entire life within a small walking radius. It goes without saying they are almost all young, single, and don’t have kids. Oh, they have life all figured out and solutions to world problems though.

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Another reason why more housing won’t be built

That makes San Francisco’s average building cost—at about $440 per square foot—the highest in the world, according to data research group CBRE. A combination of rising materials costs, a labor shortage and supply chain disruptions are pushing costs even higher: In the Bay Area, construction bids have surged 17% over the past year, according to consulting group TBD Consultants.

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If you can force superlandlords who have built to rent rather than build to own into selling these units, you’re converting renters into owners without building a single property. It’s renters who are asking for housing. Yes, as well, prices would take a gigantic dump if many of the suggestions are enacted. A “great reset” in home prices is coming at some point in time and getting the Blackrocks et al to sells first due to tax policies would be preferable IMHO.

A huge problem in my area are the number of units being treated as parking spots for cash, only to be laundered later. The scenario goes like this - Buyer 1 purchases a new construction home that closes in December 2018, using unsourced capital and funds their loan through a bank that has close ties to their homelands government. In January 2020 the seller lists and sells to Buyer 2, a fellow countryman, who brings his unsourced down payment to close using a loan from the same bank as Buyer 1. In January 2022 Buyer 2 repeats the process with Buyer 3. Eventually of course Buyer 4 or 5 will be holding the bag as values don’t grow to the sun. During this time the home is not rented to anyone. The back yards of these homes are unfinished, while the front yard maintenance is done by the HOA. This is all perfectly legal - at least on the fringes thereof - and comprises about 10% or more of new construction purchases here in The OC.

Imagine what prices would be like if an additional 10% of housing stock could be purchased to own, not purchased to leave vacant.

There are solutions to housing inventory - and most of them are going to be very difficult to accept. Building multi unit properties in the suburbs is not an answer. ADU’s are rentals, not owned homes. How do you get massive rental projects turned into for sale homes? Clubs and Mace like measures will likely be the only way it gets done.

$1.2M isn’t affordable. What they mean is people must pay $1.2M to create an affordable home for someone else.

Stanford’s most exclusive neighborhood becomes legal battleground over housing

‘If cities and counties can simply sidestep state law and prevent construction of housing, that’s just really bad for citizens around this entire state,’ said a Stanford professor suing Santa Clara County


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