Why SLO does not have affordable housing

April 23, 2017

OPINION by ALLAN COOPER

The regulatory process has universally been blamed for the high cost of housing. This is a myth.

Even if, here in San Luis Obispo, we eliminate all regulatory constraints in the permitting process and new housing can be built more quickly:

1. We will never have affordable housing when our rate of job growth (2 percent per year) exceeds the growth in our housing supply (maximum 1 percent per year).

2. We will never have affordable housing as long as Cal Poly enrollments keep increasing thereby driving up rents and the price of home purchases.

3. We will never have affordable housing because new construction always costs more and more profits are to be made building larger homes. All of this raises the median price of new and existing housing.

4. We will never have affordable housing as long as mortgage rates are ratcheting up.

5. We will never have affordable housing as long as rents are high in SLO and therefore suppressing the growth in, and increasing the demand for, owner-occupied housing.

6. We will never have affordable housing when there remain incentives to own a house as an investment and because of the standard tax deductions, write-offs on property taxes and rental income.

7. We will never have affordable housing if cheap construction labor (undocumented workers) are deported.

8. We will never have affordable housing because the high capital gains taxes assessed on the sale of a house discourages the elderly to downsize. This suppresses the availability of housing.

9. We will never have affordable housing as long as wealthy retirees from the urban centers cash in on their million dollar homes and move to SLO.

10. We will never have affordable housing as long as the SLO Chamber, the SLO Downtown Association and the SLO Promotional Coordinating Committee keep promoting tourism. More visitors to SLO whet the appetite of prospective homeowners and increases the demand.

11. We will never have affordable housing as long as local tax assessments keep rising.

12. We will never have affordable housing as long as San Luis Obispo remains a desirable place to live. Even if SLO no longer remains a desirable place to live – like LA – the cost of housing will remain high – as it has in LA.

13. We will never have affordable housing as long as new transplants employed in the professions and the government sector command such high salaries.

14. We will never have affordable housing as long as down payments on mortgages remain at 20 percent.

15. We will never have affordable housing as long as foreign investors keep purchasing our homes in order to provide a safe haven for their wealth.